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California enacts new hospital fee program, lifts Medicaid rate freeze

October 11, 2013

California hospitals will receive more than $10 billion in additional Medicaid funds over the next three years through a new hospital fee program signed into law Monday by the governor, the California Hospital Association reports. The legislation (SB 239) requires the state to use federal matching funds raised by the fee for supplemental Medi-Cal payments to hospitals and health care coverage for children. It also eliminates Medi-Cal cuts for non-rural hospital-based skilled nursing facilities, and lifts a rate freeze for other Medicaid providers that resulted in a payment shortfall for hospitals of more than $5 billion in 2012. CHA President and CEO Duane Dauner said the new law will provide “greater access to vital health care services as the state’s hospitals prepare for implementation of the federal Affordable Care Act.” CHA also supports a 2014 ballot initiative that would make permanent the hospital fee program and the use of the funds as intended.