A service of the California Health Care Foundation

Hospital Fee Is One Step Closer to Law

The Assembly Committee on Health yesterday approved a bill designed to offset Medi-Cal costs for hospitals.

SB 239 by Sen. Ed Hernandez (D-West Covina) extends the Medi-Cal quality assurance fee for hospitals for an additional two years.

“This bill would create a two-year fee program that would provide supplemental Medi-Cal payment to hospitals, to help reduce that annual loss of about $5 billion a year, from treating Medi-Cal patients,” said Anne McLeod, senior vice president of health policy at the California Hospital Association.

“The program would raise about $8 billion in fees, paid by the hospitals, of which about $1.3 billion would be provided to the state to help fund the cost of children’s health care coverage,” McLeod said. “The remaining funds would be used to provide direct grants to public hospitals and to draw down federal matching funds of about $6.5 billion in California.”

This funding comes at a good time for hospitals, said Assembly member and committee co-chair Dan Logue (R-Linda).

“This is going to be a lifesaver for hospitals in California,” Logue said, “particularly in rural areas.”

From the state’s point of view, Hernandez said, it’s beneficial in two important fiscal ways.

“This bill will provide additional funds for our hospitals without having to tap into our general fund,” Hernandez said, because the money will be matched with federal dollars.

The state saves on its Medi-Cal costs, as well, according to Hernandez. “The bill will draw down funds for [Medi-Cal] children’s programs, which will offset general fund expenditures,” Hernandez said. 

SB 239 passed on a 16-0 vote. It now heads to Assembly Appropriations.

Categories: Capitol Desk, Medi-Cal

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