(a) Private hospitals shall be paid supplemental amounts for each subject fiscal quarter in a program period for the provision of hospital outpatient services as set forth in this section. The supplemental amounts shall be in addition to any other amounts payable to hospitals with respect to those services and shall not affect any other payments to hospitals. The supplemental amounts shall result in payments equal to the statewide aggregate upper payment limit for private hospitals for each subject fiscal year.

(b) Except as set forth in subdivisions (d) and (e), each private hospital shall be paid an amount for each subject fiscal year equal to the outpatient supplemental rate multiplied by the hospital’s outpatient base amount, which payments shall be made on a quarterly basis. The outpatient supplemental rate shall result in payments to hospitals that equal the applicable federal upper payment limit for the subject fiscal year, except that with respect to a subject fiscal year that begins before the start of a program period or that ends after the end of the program period for which the payments are made, the outpatient supplemental rate shall result in payments to hospitals that equal a percentage of the applicable upper payment limit where the percentage equals the percentage of the subject fiscal year that occurs during the program period. For purposes of this subdivision, the applicable federal upper payment limit shall be the federal upper payment limit for hospital outpatient services furnished by private hospitals for each subject fiscal year.

(c) In the event federal financial participation for a subject fiscal year is not available for all of the supplemental amounts payable to private hospitals under subdivision (b) due to the application of an upper payment limit or for any other reason, both of the following shall apply:

(1) The total amount payable to private hospitals under subdivision (b) for the subject fiscal year shall be reduced to the amount for which federal financial participation is available.

(2) The amount payable under subdivision (b) to each private hospital for the subject fiscal year shall be equal to the amount computed under subdivision (b) multiplied by the ratio of the total amount for which federal financial participation is available to the total amount computed under subdivision (b).

(d) Payments shall not be made under this section for the periods when a hospital is a new hospital during a program period.

(e) Payments shall be made to a converted hospital that converts during a subject fiscal quarter by multiplying the hospital’s outpatient supplemental payment as calculated in subdivision (b) by the number of days that the hospital was a private hospital in the subject fiscal quarter, divided by the number of days in the subject fiscal quarter. Payments shall not be made to a converted hospital in any subsequent subject fiscal quarter.

(Added by Stats. 2013, Ch. 657, Sec. 6. (SB 239) Effective October 8, 2013. Inoperative on date prescribed in Section 14169.72. Repealed on January 1 after inoperative date, pursuant to Section 14169.76. Note: See Section 3.5 of Article XVI of the Constitution, which was added on Nov. 8, 2016, by initiative Proposition 52.)