About Finance & Reimbursement
Vulnerable Californians who rely on the care provided by California hospitals are at risk. Driven by skyrocketing costs for labor, pharmaceuticals, regulatory mandates, and more, 53% of all hospitals statewide lose money every day to deliver patient care.
That isn’t sustainable. And California is already seeing the frightening result: rural health care services being cut to the bone, severe behavioral health care needs not being met, and more.
CMS Proposes Inadequate IPPS Update for FFY 2026
What’s happening: On April 11, the Centers for Medicare & Medicaid Services (CMS) released the federal fiscal year (FFY) 2026 inpatient prospective payment system (IPPS) proposed rule — which falls short of what hospitals need to keep up with rising costs and health care needs.
What else to know: As a result of all proposed changes, CMS estimates that hospital inpatient payments will increase by $4 billion in FFY 2026. Comments on the proposed rule are due June 10.
CHA, Stakeholders Urge Quick Movement on Payment Methodology
What’s happening: At the inaugural Proposition (Prop) 35 “Protect Access to Health Care Act” Stakeholder Advisory Committee meeting, held April 14, CHA and other stakeholders urged the Department of Health Care Services (DHCS) to move forward quickly with a payment methodology that meets two primary goals.
What else to know: Stakeholders urged the committee to develop a payment methodology that will not only be approved by the Centers for Medicare & Medicaid Services (a requirement for the state to receive federal funding), but also ensure that hospitals receive 2025 and 2026 payments — totaling as much as $1.4 billion — without unnecessary delays.
CMS Issues Post-Acute Care Payment Proposed Rules
What’s happening: On April 11, the Centers for Medicare & Medicaid Services (CMS) issued its proposed payment policies for inpatient rehabilitation facilities (IRFs), skilled-nursing facilities (SNFs), and long-term care hospitals (LTCHs) for federal fiscal year (FFY) 2026.
What else to know: Comments on the proposed rules are due to CMS by June 10.
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.
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 […]
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.
DHCS Submits Hospital Fee Program 9 Fee and Payment Model, Draft Available for Members
What’s happening: On March 28, the Department of Health Care Services (DHCS) submitted a final draft of the Hospital Quality Assurance Fee (HQAF) program 9 fee and payment model to the Centers for Medicare & Medicaid Services (CMS). An internal, members-only version is available for members to review.
What else to know: The model should be considered a draft until the state receives official CMS approval, which is expected to take six to nine months. Learn more about the 2025 HQAF program 9 — including a brief history, a summary of changes, and the future landscape of the program — in our members-only webinar on April 7 at 9 a.m. (PT).
Hospital Fee Program 8 Invoices Due April 8
What’s happening: Payments for the Hospital Quality Assurance Fee program 8 directed payment are due to the Department of Health Care Services (DHCS) by April 8.
Fee Program Proposal Submitted to CMS, Approval Typically Takes Up to Nine Months
Last week, and on schedule, the state Department of Health Care Services submitted the proposed model for the next iteration of the hospital fee program to the Centers for Medicare & Medicaid Services.