SB 1520 Summary

• Repeals the Community Hospital Education Act and implements a diagnosis-related group (DRG) prospective payment system for Medicaid inpatient hospital services effective July 1, 2013, with base rates established in the General Appropriations Act.

• Establishes the Statewide Medicaid Residency Program to fund graduate medical education at participating hospitals through a formula allocating 90% based on full-time equivalent residents and 10% based on Medicaid payments, with quarterly distributions and a $50,000 per FTE cap.

• Restructures county Medicaid contributions by setting total amounts ($269.6 million for 2013-2014, $277 million for 2014-2015) with contributions calculated using a weighted blend of enrollment and payment factors that shifts to enrollment-based by 2019-2020.

• Modifies hospital reimbursement rules to allow outpatient services reimbursement based on allowable costs, limits rate adjustments after October 31 each fiscal year, and provides exceptions for psychiatric hospitals, transplant services, and tuberculosis treatment.

• Adds procedures allowing Medicaid recipients to contest third-party benefit recovery amounts through administrative hearings and clarifies that mandatory managed care provisions for HIV/AIDS recipients apply only to those who failed to choose a managed care option.