(a) The department shall annually develop an outpatient disproportionate share factor for each hospital in California that receives Medi-Cal payments for outpatient services. That factor shall be the ratio of the sum of Medi-Cal gross outpatient revenue, county indigent programs gross outpatient revenue, and the outpatient component of other charity deductions from revenue, to total gross outpatient revenue. A hospital with a disproportionate factor that exceeds the mean factor for all hospitals in the state shall receive supplemental Medi-Cal payments in direct proportion to the level of the hospital’s disproportionate factor. This subdivision shall only apply to payments for services provided by disproportionate share hospitals on or after July 1, 1993.

(b) Notwithstanding subdivision (a), the outpatient disproportionate share factors for children’s hospitals shall be no less than the amounts that would have been established had the disproportionate factors for all hospitals been computed as the ratio of the sum of Medi-Cal gross outpatient revenue, the outpatient component of county indigent programs contractual adjustments, and the outpatient component of other charity deductions from revenue, to total gross outpatient revenue.

(c) The outpatient component of county indigent programs contractual adjustments shall be determined by calculating the ratio of county indigent programs gross outpatient revenue to county indigent programs gross total revenue, by multiplying that ratio by county indigent programs contractual adjustments. The outpatient component of other charity deductions from revenue shall be determined by calculating the ratio of other payors gross outpatient revenue to other payors gross total revenue, and multiplying that ratio by the sum of other charity deductions from revenue and teaching allowances for University of California teaching hospitals.

(d) For purposes of computing the outpatient disproportionate share factors, the department shall use the data from the Office of Statewide Health Planning and Development quarterly financial and utilization reports, as adjusted by the office for the calendar year preceding the state fiscal year in which the disproportionate factors will be effective. The department shall use the data existing on the office’s statewide data base as of April 15 of each year. For the purposes of this section, a hospital shall submit to the office by April 1 of each year any adjustments to its quarterly reports for the preceding calendar year. The office shall make its statewide data base, as adjusted, available to the department by April 20 of each year.

(e) Augmentation rates shall be applied to hospitals with all inclusive rates at the point of final audit settlement and shall be included in subsequent interim reimbursement rates.

(f) (1) If the department deems it necessary to issue general rules in order to implement, interpret, or make specific this section or to establish procedures to implement this section, these rules may be issued without complying with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and shall remain in effect for a period of 180 days.

(2) Thereafter, any rules that are necessary to implement, interpret, or make specific this section or that govern departmental procedures shall be adopted in compliance with the Administrative Procedure Act.

(3) The adoption, pursuant to paragraph (1), of any emergency regulations that are filed with the Office of Administrative Law within one year of the effective date of this act shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health, or safety.

(Amended by Stats. 1993, Ch. 385, Sec. 2. Effective September 8, 1993.)