(1) Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which health care services are provided to qualified low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Under existing law, one of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed care plans. Existing law, until July 1, 2019, imposed a managed care organization provider tax, administered and assessed by the department, on licensed health care service plans, managed care plans contracted with the department to provide Medi-Cal services, and alternate health care service plans (AHCSP) , as defined. The tax included the establishment of applicable taxing tiers and per enrollee amounts for each fiscal year, and all revenues, less refunds, derived from the tax were deposited into the State Treasury to the credit of the Health and Human Services Special Fund in the State Treasury, and continuously appropriated to the department for purposes of funding the nonfederal share of Medi-Cal managed care rates for health care services furnished to specified persons.
Existing law declares the intent of the Legislature to enact a managed care organization provider tax in California, and requires the collection of the tax and the associated revenue contingent upon receipt of approval from the federal Centers for Medicare and Medicaid Services.
This bill would establish a managed care organization provider tax, with substantially similar provisions, that would become effective and operative on the effective date of the federal approval necessary for receipt of federal financial participation, as specified. The bill would specify the applicable tax amounts for each taxing tier for the 2019–20, 2020–21, and 2021–22, fiscal years, and the first 6 months of the 2022–23 fiscal year. The bill would establish the Health Care Services Special Fund. All revenues, less refunds, derived from the taxes provided for in the bill would be deposited in the State Treasury to the credit of the fund and continuously appropriated, without regard to fiscal year, to the department for purposes of funding the nonfederal share of Medi-Cal managed care rates for health care services furnished to children, adults, seniors and persons with disabilities, and persons dually eligible for Medi-Cal and Medicare. By creating a continuously appropriated fund, the bill would make an appropriation.
This bill would make these provisions inoperative on January 1, 2023, or under other circumstances specified in the bill, and would repeal it as of January 1, 2024.
(2) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.
(3) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.