The Hospital Quality Assurance Fee (HQAF) Program and all of its statutory provisions were made permanent through the passage of CHA’s ballot initiative, the Medi-Cal Funding and Accountability Act (Proposition 52), in the November 2016 general election. While this provides the framework for all future hospital fee programs, future iterations must adhere to federal regulations related to health-care provider taxes. Further, the Department of Health Care Services (DHCS) must obtain all necessary federal approvals.
For each hospital fee program, the Centers for Medicare & Medicaid Services (CMS) must approve:
The provider tax waiver, which covers the fee structure used to support the non-federal share of Medi-Cal supplemental payments
Medi-Cal fee-for-service (FFS) state plan amendments, which cover the FFS supplemental payments
Medi-Cal managed care rates and contracts, which cover the managed care supplemental payments
While some federal approvals (e.g., provider tax waiver, FFS state plan amendments) cover the entire hospital fee program, others require review/approval on an annual basis (e.g. managed care rates/contracts). Included below are the hospital fee program federal approvals received to date, for the programs beginning on or after January 2014.
Expanded Hospital Supplier Diversity Reports Due July 1
What’s happening: The first round of expanded Hospital Supplier Diversity Reports required under Assembly Bill (AB) 1392 (2023) are due to the Department of Health Care Access and Information (HCAI) on July 1.
What else to know: In 2024, the Office of Administrative Law approved HCAI’s regulations to implement AB 1392. This year, the new reporting requirements are fully in effect — and HCAI has developed a new template to support and inform this updated reporting.
What’s happening: The Department of Health Care Services (DHCS) has updated service definitions for four of the 14 community supports that Medi-Cal managed care plans (MCPs) may offer as part of the state’s Medi-Cal reform effort, California Advancing and Innovating Medi-Cal (CalAIM). The four updated service definitions go into effect July 1.
What else to know: According to DHCS, the updated definitions aim to improve networks, equity, and enrollment by ensuring that services are implemented in a clear and unified way across the state.
CMS Finalizes Medicare Advantage, Part D Rule for 2026
What’s happening: In its finalized changes to the Medicare Advantage (MA) and Part D prescription drug programs for contract year 2026, the Centers for Medicare & Medicaid Services (CMS) struck most of the Biden-era proposals and declined to finalize additional insurer accountability provisions.
What else to know: The rule, which did not address several other proposals (detailed below), is effective Jan. 1, 2026.
CHA Memo Helps Hospital EDs with Psychiatric Emergencies Under AB 1316
What’s happening: As of Jan. 1, hospital emergency departments (EDs) have a clear pathway for Medi-Cal reimbursement for behavioral health visits under CHA-sponsored Assembly Bill (AB) 1316 (2024). In a memo to members, CHA provides guidance to hospitals on the new requirements and their obligations for stabilizing or transferring individuals in EDs experiencing a mental health crisis.
What else to know: The new law ensures hospitals get reimbursed by Medi-Cal for the ED services they provide to patients with behavioral health conditions. It also empowers hospitals to promptly transfer patients to inpatient psychiatric care — without delays by counties and health plans.
A report released earlier this week by the well-respected and nonpartisan RAND Corp. underscores an alarming fact that hospital leaders have been saying for years: The viability of hospital-based emergency care is at risk after facing epidemics, a pandemic, increased patient acuity and complexity, and unsustainable declines in payment.
Medicare Fee-for-Service Margins Analysis Includes Q4 2024 Data Release
What’s happening: Following the Centers for Medicare & Medicaid Services’ (CMS’) fourth quarter (Q4) 2024 data release, CHA DataSuite has issued a hospital-specific analysis of the Medicare fee-for-service (FFS) margins that show its trends from federal fiscal year (FFY) 2014 through FFY 2023.
What else to know: Approximately 93% of hospitals provided their FFY 2023 cost reports for this CMS data release.
The analysis shows Medicare margins for the following areas/units: inpatient, outpatient, graduate medical education, psychiatric unit, rehabilitation unit, skilled-nursing unit, and swing beds. The margins are shown graphically for hospitals.
This analysis excludes COVID-19 public health emergency funding, including both provider relief fund and small business association loan forgiveness amounts since that may not have been used solely for Medicare FFS activity.
CHA Publishes Web Page Dedicated to CDPH Checklists, Info Sheets
What’s happening: To assist hospitals in preparing for licensing and relicensing surveys — as well as making changes to their licenses, bed capacities, or services — CHA has created a web page that makes related resources easily accessible for hospital members.
What else to know: The resource page includes the Licensing and Relicensing Survey Tool, General Entrance Conference List, Relicensing Survey Guidance materials, and more.
CHA Board Chair Siri Nelson Named El Dorado County Woman of the Year
What’s happening: On March 31, California State Assemblymember Joe Patterson recognized Marshall Medical Center CEO Siri Nelson, who also serves as CHA’s board chair, as the 5th Assembly District’s El Dorado County Woman of the Year.
What else to know: In the press release, Patterson commended Nelson’s commitment to ensuring residents have quality health care. “Under her leadership, we have seen expanded innovative healthcare services in our community, in addition to numerous new career opportunities for residents,” he said.
CDPH All Facilities Letter Shares Change in Late Payment Penalty Notices
What’s happening: On April 4, the California Department of Public Health(CDPH) issued an All Facilities Letter (AFL 25-14), which announced that the department is implementing a paperless process to communicate late payment penalty notices for Center for Health Care Quality health care facility licensing fees.
What else to know: Beginning May 15, CDPH’s current practice — mailing a paper copy of the late payment penalty notice to the licensee — will change to a paperless process: CDPH’s Revenue Collection Unit will email the notice to the facility using the licensee email address reported to CDPH. If no licensee email address is on file, the unit will email the notice to the facility’s general contact email address reported to CDPH.
DHCS to Convene Prop 35 Advisory Committee on April 14
What’s happening: The Department of Health Care Services (DHCS) is holding the first meeting of the Proposition (Prop) 35 “Protect Access to Health Care Act” Stakeholder Advisory Committee on April 14 from 11:30 a.m. to 3:30 p.m. (PT). This meeting is open to the public, and registration for virtual attendance is open.
What else to know: In November 2024, voters approved the Protect Access to Health Care Act of 2024 (Prop 35), which will deliver significant resources to providers who care for Californians covered by Medi-Cal (as much as $1.4 billion is expected to support hospitals in 2025 and 2026). The committee will advise and make recommendations to the department on implementing these Prop 35 payments. More details can be found on the DHCS website.
