The hospital provider fee is crucial to the preservation of California’s entire safety net, which is why California’s safety-net hospitals initiated provider fee legislation, and why all California hospitals support it. The program uses fees assessed by the state on hospitals to draw down federal matching funds, which are then issued as supplemental payments to hospitals. The hospital provider fee is an integral element to improving access to health care for some of California’s most vulnerable residents.
Three key pieces of legislation have been enacted to create the provider fee program for various periods of time. AB 1653 covered the period of April 1, 2009, through December 31, 2010, and resulted in a net benefit of 2.6 billion to California Hospitals.
SB 90, signed into law in April of 2011 created the provider fee program for January 1, 2011, through June 30, 2011, and resulted in a net benefit to hospitals of $858 million.
SB 335, signed into law in September of 2011, created the hospital fee program for the 30-month period from July 1, 2011, through December 31, 2013. This program is expected to bring a net benefit of over$4.6 billion to California’s hospitals.
The California Department of Health Care Services has received 96 percent of fees from hospitals for cycle 9 of the 30-month hospital fee program. However, due to a small reserve remaining from the fees collected in the last cycle of managed care, hospitals can expect to receive 100 percent of the projected cycle 9 supplemental Medi-Cal fee-for-service payments on Nov. 19.
The California Health Foundation & Trust (CHFT) will send invoices Nov. 15 to hospitals with a net benefit for the amount of the pledge contribution due for the ninth cycle. Instructions for wiring payments will be included. Pledge contributions should be made to CHFT no later than Nov. 22 to ensure CHFT can make grants in a timely manner.
CHA reminds hospitals that the cycle nine fee-for-service payments for the 30-month hospital fee program are due to the California Department of Health Care Services (DHCS) by Friday, Nov. 1. To ensure the continued success of the program, it is crucial that DHCS collect the hospital fees to claim the federal matching funds. If the full fee payments are not made to DHCS by Nov. 1, reduced supplemental payments will be made to hospitals (the next supplemental fee-for-service payment to hospitals will be made Nov. 19). DHCS sent invoices to hospitals for cycle nine on Oct. 9, and instructions for wiring funds to DHCS are attached.
Over the course of the past 10 days, the Medi-Cal managed care plans have received supplemental capitation payments from the California Department of Health Care Services for 2012-13 of the 30-month hospital fee program. CHA is in the process of reconciling the payment amounts with the plans so we can recommend how to distribute the funds across hospitals. Early next week CHA will create and distribute hospital-specific payment schedules by health plan for member hospitals.