The state department shall administer the program authorized in this article. In administering the program, the state department shall do all of the following:

(a)  Verify hospital eligibility, pursuant to Section 1339.9, and designate those hospitals as primary health service hospitals.

(b)  Establish criteria for the health service plans pursuant to Section 1339.15.

(c)  Review a general acute care hospital’s health service plan based upon recommendations of the local health systems agency, input from local public meetings, recommendations of the medical advisory panel, as appropriate, and the adequacy of the plan in meeting the criteria established pursuant to this section. The state department shall approve, deny, or defer the plan in whole or in part, and shall notify the hospital of its findings, in writing, within 120 days after receipt of the plan. The plan shall be deemed approved if the hospital has not received notification from the state department within the 120-day period.

(d)  Negotiate and grant exceptions to the licensure requirements for general acute care hospitals that are necessary to serve the purposes of this article when the granting of those exceptions do not jeopardize the health and welfare of the patients. Exceptions that are granted shall be consistent with the primary health service hospital’s plan and any amendments thereto.

(e)  Convene an advisory panel to review the medical-surgical and obstetrical services proposed as part of the primary hospital service plan and make recommendations to the state department on the medical appropriateness of those services according to the primary health service hospital’s proposed plan. The panel shall include, but not be limited to, a rural hospital administrator, a rural family physician and surgeon, a rural hospital nurse administrator, an internist, a primary care mid-level practitioner, and a physician and surgeon from a hospital which serves as a referral center for rural hospitals.

(f)  Issue evidence of primary health service hospital designation and evidence of the number of acute care beds approved as swing beds pursuant to paragraph (4) of subdivision (b) of Section 1339.15.

(g)  Monitor the performance of the primary health service hospital to assure compliance with the hospital’s plan and licensure requirements from which those hospitals are not exempt.

(h)  Immediately upon the denial of a primary health service hospital’s health service plan, or a portion thereof, notify the hospital in writing. Within 20 days after the state department mails the notice, the hospital may present a written petition for a hearing to the state department. Upon receipt by the state department of the petition in proper form, the petition shall be set for hearing. The proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the state department shall have all the powers granted therein.

(i)  Compile and make available to health systems agencies and primary health service hospitals, information regarding state and federal funding programs for which the primary health service hospital may be eligible, the procedures necessary to apply for funding, and a description of how such requests may be incorporated into a primary health service hospital’s plan and opportunities for diversification of services, the requirements and feasibility, and the procedures for development of those services.

(j)  On behalf of primary health service hospitals, seek appropriate federal waivers consistent with the intent of this act.

(k)  Contract with one or more health systems agencies to perform the functions specified in subdivision (c) of Section 1339.11.

(l)  Develop or assist hospitals submitting a primary health service plan pursuant to Section 1339.15 to develop the following:

(1)  Alternative methods of filing claims which reduce administrative costs.

(2)  Alternative methods of Medi-Cal payment to hospitals.

(3)  Other methods of filing claims which reduce administrative costs.

(4)  Simplified and abbreviated procedures required by the department of Medi-Cal costs reports.

(5)  An abbreviated medical and social review process and other control processes.

(m)  Provide technical assistance to primary health service hospitals in development of their health service plan.

(Amended by Stats. 2019, Ch. 632, Sec. 6. (AB 1622) Effective January 1, 2020.)