(a) Notwithstanding any other provision of law, the Department of Corrections and Rehabilitation and the State Department of Health Care Services may develop a process to maximize federal financial participation for the provision of acute inpatient hospital services rendered to individuals who, but for their institutional status as inmates, are otherwise eligible for Medi-Cal pursuant to Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code or a Low Income Health Program (LIHP) pursuant to Part 3.6 (commencing with Section 15909) of Division 9 of the Welfare and Institutions Code.

(b) Federal reimbursement for acute inpatient hospital services for inmates enrolled in Medi-Cal shall occur through the State Department of Health Care Services and federal reimbursement for acute inpatient hospital services for inmates not enrolled in Medi-Cal but who are eligible for a LIHP shall occur through a county LIHP.

(c) (1) The Secretary of the Department of Corrections and Rehabilitation, in conjunction with the State Department of Health Care Services, shall develop a process to claim federal financial participation and to reimburse the Department of Corrections and Rehabilitation for the federal share of the allowable Medicaid cost provision of acute inpatient hospital services rendered to inmates according to this section and for any administrative costs incurred in support of those services.

(2) Public or community hospitals shall invoice the Department of Corrections and Rehabilitation to obtain reimbursement for acute inpatient hospital services in accordance with contracted rates of reimbursement, or if no contract is in place, the rates pursuant to Section 5023.5. The Department of Corrections and Rehabilitation shall reimburse a public or community hospital for the delivery of acute inpatient hospital services rendered to an inmate pursuant to this section. For individuals eligible for Medi-Cal pursuant to this section, the Department of Corrections and Rehabilitation shall submit a quarterly invoice to the State Department of Health Care Services for claiming federal participation at the Medi-Cal rate for acute inpatient hospital services. For enrollees in the LIHP, the Department of Corrections and Rehabilitation shall submit a quarterly invoice to the county of last legal residence pursuant to Section 14053.7 of the Welfare and Institutions Code. The county shall submit the invoice to the State Department of Health Care Services for claiming federal financial participation for acute inpatient hospital services for individuals made eligible pursuant to this section, pursuant to Section 14053.7 of the Welfare and Institutions Code, and pursuant to the process developed in subdivision (b). The State Department of Health Care Services shall claim federal participation for eligible services for LIHP enrolled inmates at the rate paid by the Department of Corrections and Rehabilitation. The State Department of Health Care Services and counties shall remit funds received for federal participation to the Department of Corrections and Rehabilitation for allowable costs incurred as a result of delivering acute inpatient hospital services allowable under this section.

(3) The county LIHPs shall not experience any additional net expenditures of county funds due to the provision of services under this section.

(4) The Department of Corrections and Rehabilitation shall reimburse the State Department of Health Care Services and counties for administrative costs that are not reimbursed by the federal government.

(5) The Department of Corrections and Rehabilitation shall reimburse the State Department of Health Care Services for any disallowance that is required to be returned to the Centers for Medicare and Medicaid Services for any litigation costs incurred due to the implementation of this section.

(d) (1) The state shall indemnify and hold harmless participating entities that operate a LIHP, including all counties, and all counties that operate in a consortium that participates as a LIHP, against any and all losses, including, but not limited to, claims, demands, liabilities, court costs, judgments, or obligations, due to the implementation of this section as directed by the secretary and the State Department of Health Care Services.

(2) The State Department of Health Care Services may at its discretion require a county, as a condition of participation as a LIHP, to enroll an eligible inmate into its LIHP if the county is the inmate’s county of last legal residence.

(3) The county LIHPs shall be held harmless by the state for any disallowance or deferral if federal action is taken due to the implementation of this section in accord with the state’s policies, directions, and requirements.

(e) (1) The Department of Corrections and Rehabilitation, in conjunction with the State Department of Health Care Services, shall develop a process to facilitate eligibility determinations for individuals who may be eligible for Medi-Cal or a LIHP pursuant to this section and Section 14053.7 of the Welfare and Institutions Code.

(2) The Department of Corrections and Rehabilitation shall assist inmates in completing either the Medi-Cal or LIHP application as appropriate and shall forward that application to the State Department of Health Care Services for processing.

(3) Notwithstanding any other state law, and only to the extent that federal law allows and federal financial participation is available, for the limited purpose of implementing this section, the department or its designee is authorized to act on behalf of an inmate for purposes of applying for or determinations of Medi-Cal or LIHP eligibility.

(f) (1) This section does not restrict or limit the eligibility or alter county responsibility for payment of any service delivered to a parolee who has been released from detention or incarceration and now resides in a county that participates in the LIHP. If otherwise eligible for the county’s LIHP, the LIHP shall enroll the parolee.

(2) Notwithstanding paragraph (1), at the option of the state, for enrolled parolees who have been released from detention or incarceration and now reside in a county that participates in a LIHP, the LIHP shall reimburse providers for the delivery of services which are otherwise the responsibility of the state to provide. Payment for these medical services, including both the state and federal shares of reimbursement, shall be included as part of the reimbursement process described in paragraph (1) of subdivision (c).

(3) Enrollment of individuals in a LIHP under this subdivision shall be subject to any enrollment limitations described in subdivision (h) of Section 15910 of the Welfare and Institutions Code.

(g) The department shall be responsible to the LIHP for the nonfederal share of any reimbursement made for the provision of acute inpatient hospital services rendered to inmates pursuant to this section.

(h) Reimbursement pursuant to this section shall be limited to those acute inpatient hospital services for which federal financial participation pursuant to Title XIX of the federal Social Security Act is allowed.

(i) This section shall have no force or effect if there is a final judicial determination made by any state or federal court that is not appealed, or by a court of appellate jurisdiction that is not further appealed, in any action by any party, or a final determination by the administrator of the federal Centers for Medicare and Medicaid Services, that limits or affects the department’s authority to select the hospitals used to provide inpatient hospital services to inmates.

(j) It is the intent of the Legislature that the implementation of this section will result in state General Fund savings for the funding of acute inpatient hospital services provided to inmates along with any related administrative costs.

(k) Any agreements entered into under this section for Medi-Cal or a LIHP to provide for reimbursement of acute inpatient hospital services and administrative expenditures as described in subdivision (c) shall not be subject to Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code.

(l) This section shall be implemented in a manner that is consistent with federal Medicaid law and regulations. The Director of the State Department of Health Care Services shall seek any federal approvals necessary for the implementation of this section. This section shall be implemented only when and to the extent that any necessary federal approval is obtained, and only to the extent that existing levels of federal financial participation are not otherwise jeopardized.

(m) To the extent that the Director of the State Department of Health Care Services determines that existing levels of federal financial participation are jeopardized, this section shall no longer be implemented.

(n) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the State Department of Health Care Services may, without taking any further regulatory action, implement this section by means of all-county letters, provider bulletins, facility letters, or similar instructions.

(o) For purposes of this section, the following terms have the following meanings:

(1) The term “county of last legal residence” means the county in which the inmate resided at the time of arrest that resulted in conviction and incarceration in a state prison facility.

(2) The term “inmate” means an adult who is involuntarily residing in a state prison facility operated, administered, or regulated, directly or indirectly, by the department.

(3) During the existence of the receivership established in United States District Court for the Northern District of California, Case No. C01-1351 TEH, Plata v. Schwarzenegger, references in this section to the “secretary” shall mean the receiver appointed in that action, who shall implement portions of this section that would otherwise be within the secretary’s responsibility.

(Amended by Stats. 2013, Ch. 76, Sec. 162. (AB 383) Effective January 1, 2014.)