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.  This program has been fully approved by CMS, and implemented by the state of California.

SB 90, signed into law in April of 2011 created the provider fee program for January 1, 2011, through June 30, 2011, with a estimated net benefit to hospitals of $858 million.  This program has not received all CMS approvals, but has been partially implemented.

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 nearly 5.2 billion to California’s hospitals.  This program is in the preliminary stages of CMS review, and implementation is not anticipated until the summer of 2012.