(a) The director shall do all of the following:

(1) Promptly submit any state plan amendment or waiver request that may be necessary to implement this article.

(2) Promptly seek federal approvals or waivers as may be necessary to implement this article and to obtain federal financial participation to the maximum extent possible for the payments under this article.

(3) Amend the contracts between the managed health care plans and the department as necessary to incorporate the provisions of Sections 14169.56 and 14169.57 and promptly seek all necessary federal approvals of those amendments. The department shall pursue amendments to the contracts as soon as possible after the effective date of this article, and shall not wait for federal approval of this article prior to pursuing amendments to the contracts. The amendments to the contracts shall, among other provisions, set forth an agreement to increase capitation payments to managed health care plans under Section 14169.56 and increase payments to hospitals under Section 14169.57 in a manner that relates back to the beginning of a program period, or as soon thereafter as possible, conditioned on obtaining all federal approvals necessary for federal financial participation for the increased capitation payments to the managed health care plans.

(b) In implementing this article, the department may utilize the services of the Medi-Cal fiscal intermediary through a change order to the fiscal intermediary contract to administer this program, consistent with the requirements of Sections 14104.6, 14104.7, 14104.8, and 14104.9. Contracts entered into for purposes of implementing this article shall not be subject to Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code.

(c) In the event any hospital, or any party on behalf of a hospital, initiates a case or proceeding in any state or federal court in which the hospital seeks any relief of any sort whatsoever, including, but not limited to, monetary relief, injunctive relief, declaratory relief, or a writ, based in whole or in part on a contention that any or all of this article is unlawful and may not be lawfully implemented, both of the following shall apply:

(1) Payments shall not be made to the hospital pursuant to this article until the case or proceeding is finally resolved, including the final disposition of all appeals.

(2) Any amount computed to be payable to the hospital pursuant to this article for a subject fiscal year shall be withheld by the department and shall be paid to the hospital only after the case or proceeding is finally resolved, including the final disposition of all appeals.

(d) Subject to Section 14169.63, no payment shall be made under this article until all necessary federal approvals for the payment and for the fee provisions in this article have been obtained and the fee has been imposed and collected. Notwithstanding any other law, payments under this article shall be made only to the extent that the fee established in this article is collected and available to cover the nonfederal share of the payments.

(e) All payments made by the department to hospitals and managed health care plans under this article shall be made only from the following:

(1) The quality assurance fee set forth in this article, along with any interest or other investment income thereon.

(2) Federal reimbursement and any other related federal funds.

(f) In order to ensure access to care to hospital services, the director shall seek federal approval for supplemental payments for hospital services provided to all Medi-Cal populations, including the optional and expansion populations.

(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.)