14197.6. (Added by Stats. 2024, Ch. 40, Sec. 69.)

(a) For purposes of this section, the following definitions apply:

(1) “Children’s hospital” has the same meaning as that term is defined in Section 10727.

(2) “Medi-Cal managed care plan” has the same meaning as that term is defined in subdivision (j) of Section 14184.101.

(b) Notwithstanding any other law, for dates of service no sooner than July 1, 2024, the department shall establish a directed payment reimbursement methodology, or revise one or more existing directed payment reimbursement methodologies, applicable to children’s hospitals. Medi-Cal managed care plans shall reimburse children’s hospitals in accordance with the requirements of the directed payment arrangement established by the department pursuant to this section and guidance issued pursuant to subdivision (e).

(c) The department shall establish the form and manner of the directed payments authorized pursuant to this section, in consultation with representatives of children’s hospitals and in accordance with the requirements for directed payment arrangements described in Section 438.6(c) of Title 42 of the Code of Federal Regulations and any associated federal guidance.

(d) In implementing this section, the department shall seek any federal approvals that it deems necessary. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

(e) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section, in whole or in part, by means of all-county letters, plan letters, provider bulletins, information notices, or other similar instructions, without taking any further regulatory action.

(f) The department shall develop the methodologies and parameters for the payments implemented pursuant to subdivisions (b) and (c) and may revise the methodologies and parameters for purposes, including, but not limited to, obtaining or maintaining any necessary federal approvals as required by subdivision (d).

(h) If the Protect Access to Healthcare Act of 2024 (A.G. No. 23-0024) is approved by the voters, and if children’s hospitals receive increased reimbursement rates or payments pursuant to Section 14199.108, 14199.108.3, 14199.112, or 14199.116, or if children’s hospitals receive increased reimbursement rates or payments funded pursuant to subdivision (c) of Section 14105.200, then the amount available for directed payments to children’s hospitals as specified in subdivision (g) and the amount directed pursuant to subdivision (c) may be reduced by the estimated total amount of such increases, as determined by the Department of Health Care Services, in an amount not to exceed seventy-five million dollars ($75,000,000) annually.

(i) It is the intent of the Legislature that the payments implemented pursuant to this section are to augment amounts that would otherwise be payable to children’s hospitals by a Medi-Cal managed plan or the department. It is not the intent of the Legislature that the payments implemented pursuant to this section replace amounts that would otherwise be payable by a Medi-Cal managed care plan or the department to children’s hospitals.