Cal. Welf. & Inst. Code § 14168.33

(a)
1. (1) All fees required to be paid to the state pursuant to this article shall be paid in the form of remittances payable to the department.
2. (2) The department shall directly transmit the fee payments to the Treasurer to be deposited in the Hospital Quality Assurance Revenue Fund, created pursuant to Section 14167.35. Notwithstanding Section 16305.7 of the Government Code, any interest and dividends earned on deposits in the fund from the proceeds of the fee assessed pursuant to this article shall be retained in the fund for purposes specified in subdivision (b).
(b) Notwithstanding subdivision (c) of Section 14167.35, all funds from the proceeds of the fee assessed pursuant to this article in the Hospital Quality Assurance Revenue Fund, together with any interest and dividends earned on money in the fund, shall, upon appropriation by the Legislature, continue to be used exclusively to enhance federal financial participation for hospital services under the Medi-Cal program, to provide additional reimbursement to, and to support quality improvement efforts of, hospitals, and to minimize uncompensated care provided by hospitals to uninsured patients, in the following order of priority:
1. (1) To pay for the department’s staffing and administrative costs directly attributable to implementing Article 5.226 (commencing with Section 14168.1) and this article, not to exceed five hundred thousand dollars ($500,000).
2. (2) To pay for the health care coverage for children in the amount of one hundred five million dollars ($105,000,000) for each subject fiscal quarter for which payments are made under Article 5.226 (commencing with Section 14168.1).
3. (3) To make increased capitation payments to managed health care plans pursuant to Article 5.226 (commencing with Section 14168.1).
4. (4) To reimburse the General Fund for the increase in the overall compensation to a private hospital that is attributable to its change in status from contract hospital to noncontract hospital, pursuant to subdivision (a) of Section 14168.10.
5. (5) To make increased payments to hospitals pursuant to Article 5.226 (commencing with Section 14168.1).
6. (6) To make increased payments to mental health plans pursuant to Article 5.226 (commencing with Section 14168.1).
(c) Any amounts of the quality assurance fee collected in excess of the funds required to implement subdivision (b), including any funds recovered under subdivision (d) of Section 14168.13 or subdivision (e) of Section 14168.38, shall be refunded to general acute care hospitals, pro rata with the amount of quality assurance fee paid by the hospital, subject to the limitations of federal law. If federal rules prohibit the refund described in this subdivision, the excess funds shall be deposited in the Distressed Hospital Fund to be used for the purposes described in Section 14166.23, and shall be supplemental to and not supplant existing funds.
(d) Any methodology or other provision specified in Article 5.226 (commencing with Section 14168.1) or this article may be modified by the department, in consultation with the hospital community, to the extent necessary to meet the requirements of federal law or regulations to obtain federal approval or to enhance the probability that federal approval can be obtained, provided the modifications do not violate the spirit and intent of Article 5.226 (commencing with Section 14168.1) or this article and are not inconsistent with the conditions of implementation set forth in Section 14168.40.
(e) The department, in consultation with the hospital community, shall make adjustments, as necessary, to the amounts calculated pursuant to Section 14168.32 in order to ensure compliance with the federal requirements set forth in Section 433.68 of Title 42 of the Code of Federal Regulations or elsewhere in federal law.
(f) The department shall request approval from the federal Centers for Medicare and Medicaid Services for the implementation of this article. In making this request, the department shall seek specific approval from the federal Centers for Medicare and Medicaid Services to exempt providers identified in this article as exempt from the fees specified, including the submission, as may be necessary, of a request for waiver of the broad-based requirement, waiver of the uniform fee requirement, or both, pursuant to paragraphs (1) and (2) of subdivision (e) of Section 433.68 of Title 42 of the Code of Federal Regulations.
(g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this article or Article 5.226 (commencing with Section 14168.1) by means of provider bulletins, all plan letters, or other similar instruction, without taking regulatory action. The department shall also provide notification to the Joint Legislative Budget Committee and to the appropriate policy and fiscal committees of the Legislature within five working days when the above-described action is taken in order to inform the Legislature that the action is being implemented.