SB 1100 (Chapter 560, Statutes of 2005), the Medi-Cal Hospital/Uninsured Care Demonstration Project Act, changed how some California hospitals are reimbursed under the Medi-Cal program.

For designated public hospitals (University of California and county), the act changed the primary Medi-Cal reimbursement method to certified public expenditures. The act also eliminated the use of most intergovernmental transfers, and established other funding mechanisms. The California Medical Assistance Commission (CMAC) no longer negotiates inpatient rates with the University of California and county hospitals for the inpatient services provided under the Medi-Cal program. Instead, the Department of Health Care Services determines Medi-Cal reimbursement levels for these hospitals, as specified in the act.

For private and non-designated public, or district, hospitals, the act continues the Selective Provider Contracting Program. CMAC will continue to negotiate inpatient rates with private and district hospitals for hospital inpatient services they provide under the Medi-Cal program.

The act also created new hospital supplemental payment programs, and restructured how supplemental payment programs are funded.