(a) Upon receipt of a letter that indicates likely federal approval that the director determines is sufficient for implementation under Section 14168.34, or upon the receipt of all final federal approvals necessary for the implementation of this article and Article 5.226 (commencing with Section 14168.1), the following shall occur:

(1) To the maximum extent possible, and consistent with the availability of funds in the Hospital Quality Assurance Revenue Fund, the department shall make all of the payments under Sections 14168.2, 14168.3, and 14168.5, including, but not limited to, supplemental payments and increased capitation payments, prior to July 1, 2011.

(2) The department shall make supplemental payments to hospitals under Article 5.226 (commencing with Section 14168.1) consistent with the timeframe described in Section 14168.11 or a modified timeline developed pursuant to Section 14168.35.

(b) Notwithstanding any other provision of this article or Article 5.226 (commencing with Section 14168.1), if the director determines, on or after June 15, 2011, that there are insufficient funds available in the Hospital Quality Assurance Revenue Fund to make all scheduled payments under Article 5.226 (commencing with Section 14168.1) before July 1, 2011, he or she shall consult with representatives of the hospital community to develop an acceptable plan for making additional payments to hospitals and managed health care plans in the third and fourth quarters of 2011 to maximize the use of delinquent fee payments or other deposits or interest projected to become available in the fund after June 15, 2011, but before September 15, 2011.

(c) Nothing in this section shall require the department to continue to make payments under Article 5.226 (commencing with Section 14168.1) if, after the consultation required under subdivision (b), the director determines in the exercise of his or her sole discretion that a workable plan for the continued payments cannot be developed.

(d) Subdivisions (b) and (c) shall be implemented only if and to the extent federal financial participation is available for continued supplemental payments and to providers and continued increased capitation payments to managed health care plans.

(e) If any payment or payments made pursuant to this section are found to be inconsistent with federal law, the department shall recoup the payments by means of withholding or any other available remedy.

(f) Nothing in this section shall be read as affecting the department’s ongoing authority to continue, after June 30, 2011, to collect quality assurance fees imposed on or before June 30, 2011.

(Added by Stats. 2011, Ch. 19, Sec. 8. (SB 90) Effective April 13, 2011. Conditionally inoperative as provided in Sections 14168.38 (subd. (d), para. (1)) and 14168.40. Repealed on or after January 1, 2013, as prescribed in Section 14168.41.)