(a) (1) To the extent federal financial participation is not jeopardized and consistent with federal law, and subject to the conditions set forth in subdivision (b), the department shall pay Medi-Cal managed care plans rate range increases, as defined by paragraph (4) of subdivision (b) of Section 14301.4, at a minimum level of 75 percent of the rate range available with respect to all enrollees who are newly eligible beneficiaries for purposes of this section. If a nonfederal share is necessary to fund the rate range increases, a county public hospital health system as defined in subdivision (f) of Section 17612.2 or affiliated governmental entity may voluntarily provide intergovernmental transfers for the nonfederal share.

(2) The increased payments to Medi-Cal managed care plans that would be paid consistent with actuarial certification and enrollment in the absence of this section, including, but not limited to, payments described in Section 14182.15, shall not be reduced as a consequence of payment under this section.

(b) Payments to Medi-Cal managed care plans pursuant to subdivision (a) are conditioned on all of the following:

(1) The Medi-Cal managed care plan shall pay all of the rate range increases provided under this section as additional payments to county public hospital health systems for providing and making available services to Medi-Cal enrollees of the plan.

(2) The Medi-Cal managed care plan shall demonstrate that it has a contract or other arrangement in place with county public hospital health systems to provide additional payments to county public hospital health systems for services rendered to Medi-Cal beneficiaries that meet the requirements of paragraph (1). The existence of those agreements or arrangements shall be reported to the department by the county public hospital health system.

(3) Additional payments described in paragraph (1) shall not supplant amounts that would otherwise be payable by Medi-Cal managed care plans to county public hospital health systems. A Medi-Cal managed care plan shall not impose a fee or retention amount, or reduce other payments to a county public hospital health system, that would result in a direct or indirect reduction to these payments.

(4) The county public hospital health system or affiliated governmental entity voluntarily provides an intergovernmental transfer of public funds to the state for use as the nonfederal share, if any, of the increased capitation rates. Notwithstanding any other provision of law, the department shall not assess the fee described in subdivision (d) of Section 14301.4, or any other similar fee.

(c) To the extent a Medi-Cal managed care plan is not compliant with any of the requirements imposed upon it pursuant to this section, the department shall reduce by 25 percent the default assignment into the Medi-Cal managed care plan with respect to all Medi-Cal beneficiaries, as long as the other Medi-Cal managed care plan or plans in that county have the capacity to receive the additional default membership.

(Added by Stats. 2013, Ch. 24, Sec. 3. (AB 85) Effective June 27, 2013.)