(a) This article and Article 5.226 (commencing with Section 14168.1) shall become inoperative and the requirements for supplemental payments or other payments under Article 5.226 (commencing with Section 14168.1) shall be retroactively invalidated, on the first day of the first month of the calendar quarter following notification to the Joint Legislative Budget Committee by the Department of Finance, that any of the following have occurred:

(1) A final judicial determination by the California Supreme Court or any California Court of Appeal that the revenues collected pursuant to this article that are deposited in the Hospital Quality Assurance Revenue Fund are either of the following:

(A) “General Fund proceeds of taxes appropriated pursuant to Article XIII B of the California Constitution,” as used in subdivision (b) of Section 8 of Article XVI of the California Constitution.

(B) “Allocated local proceeds of taxes,” as used in subdivision (b) of Section 8 of Article XVI of the California Constitution.

(2) The department has sought but has not received federal financial participation for the supplemental payments and other costs required by this article for which federal financial participation has been sought.

(3) A lawsuit related to this article, Article 5.226 (commencing with Section 14168.1), or Section 14166.115 is filed against the state and a preliminary injunction or other order has been issued that results in a financial disadvantage to the state.

(4) The director, in consultation with the Department of Finance, determines that the implementation of this article or Article 5.226 (commencing with Section 14168.1) has resulted in a financial disadvantage to the state.

(b) For purposes of this section, “financial disadvantage to the state” means either:

(1) A loss of federal financial participation.

(2) A cost to the General Fund, that is equal to or greater than one-quarter of 1 percent of the General Fund expenditures authorized in the most recent annual Budget Act.

(c) (1) The director shall have the authority to recoup any payments made under Article 5.226 (commencing with Section 14168.1) if any of the following apply:

(A) Recoupment of payments made under Article 5.226 (commencing with Section 14168.1) is ordered by a court.

(B) Federal financial participation is not available for payments made under Article 5.226 (commencing with Section 14168.1) for which federal financial participation has been sought.

(C) Recoupment of payments made under Article 5.226 (commencing with Section 14168.1) is necessary to prevent a General Fund cost that is estimated to be equal to or greater than one-quarter of 1 percent of the General Fund expenditures authorized in the most recent annual Budget Act and that results from implementation of a court order or the unavailability of federal financial participation.

(2) In the event payments are recouped for a particular quarter, fees paid by a hospital for that quarter pursuant to this article shall be refunded to the extent that the hospital meets both of the following conditions:

(A) The hospital has actually paid the fee for the subject quarter and for all prior quarters.

(B) The hospital has returned the payment received pursuant to Article 5.226 (commencing with Section 14168.1) for that quarter, or has had that payment recouped through a withholding of funds owed by Medi-Cal or other state payments, or recouped through other means.

(d) In the event the department determines that recoupment of supplemental payments is necessary to implement any provision of this section, the department may recoup payments made pursuant to Article 5.226 (commencing with Section 14168.1) from fees paid by the hospital pursuant to this article.

(e) Concurrent with invoking any provision of this section, the director shall notify the fiscal and appropriate policy committees of the Legislature of the intended action and the specific reason or reasons for the proposed action.

(Added by Stats. 2011, Ch. 19, Sec. 8. (SB 90) Effective April 13, 2011. Conditionally inoperative as provided in this section (subd. (a)) and Section 14168.38 (subd. (d), para. (1)). Repealed on or after January 1, 2013, as prescribed in Section 14168.41. Note: Provisions for inoperation affect Article 5.227, commencing with Section 14168.31. (Article 5.226 was repealed.))