The amount of any stabilization funding payable to the project year private DSH hospitals under Section 14166.20 for a project year, which amount shall not include the amount of stabilization funding paid or payable to hospitals prior to the computation of the stabilization funding under Section 14166.20, plus any amount payable to project year private DSH hospitals under paragraph (1) of subdivision (b) of Section 14166.21, shall be allocated as follows:

(a) (1) To fund any shortfall due under Section 14166.11.

(2) An amount shall be transferred to the Private Hospital Supplemental Fund established pursuant to Section 14166.12, as may be necessary so that the amount for the Private Hospital Supplemental Fund for the project year, including all funds previously transferred to, or deposited in, the Private Hospital Supplemental Fund for the project year, is not less than the Private Hospital Supplemental Fund base amount determined pursuant to subdivision (j) of Section 14166.12.

(3) The amounts paid or transferred under paragraphs (1) and (2) shall be reduced pro rata if there is not sufficient funding described under paragraphs (1) and (2).

(b) Of the stabilization funding remaining, after allocations pursuant to subdivision (a), that are payable to project year private DSH hospitals, 66.4 percent shall be allocated and distributed among those hospitals pro rata based on the amounts determined in accordance with Section 14166.11, and 33.6 percent shall be transferred to the Private Hospital Supplemental Fund.

(c) (1) Notwithstanding any other law, the stabilization funding payable to project year private DSH hospitals under Section 14166.20 for a project year as determined under this section that has not been paid, or specifically committed for payment, to hospitals prior to January 1, 2012, may be utilized by the director to make payments to hospitals that received underpayments pursuant to Section 14166.11 due to improper peer group classifications for the 2005–06 and 2006–07 payment adjustment years.

(2) The balance after payments made pursuant to paragraph (1), if any, of the stabilization funding payable to project year private DSH hospitals under Section 14166.20 shall not be paid to the project year private DSH hospitals pursuant to Section 14166.20. The funds that would otherwise be paid from the Private Hospital Supplemental Fund shall be transferred to the General Fund, and funds that would otherwise be drawn from the General Fund for payments to the private DSH hospitals pursuant to Section 14166.20 shall be retained in the General Fund.

(Amended by Stats. 2012, Ch. 23, Sec. 91. (AB 1467) Effective June 27, 2012. Conditionally inoperative as provided in Section 14166.26 or in subd. (b) or (g) of Section 14166.2. Repealed on date prescribed in Section 14166.26 or in subd. (b) or (g) of Section 14166.2.)