On June 27, 2013, the Governor signed the FY2013-14 state budget, which included an agreement between the state and the counties regarding the redirection of health realignment funds to the state.  All counties are subject to the agreement, but the agreement varies depending on whether the county is a County Medical Services Program (CMSP) county, a payer/contract county, or a public hospital system county.  This summary focuses on aspects of the agreement related to public hospital system counties.

Passage of the realignment agreement was critical to the successful expansion of the Medi-Cal program to low-income adults in California, as permitted by the Affordable Care Act (ACA).  Under the rationale that counties will see their obligations to the uninsured reduced as people gain coverage through Medi-Cal or Covered California, the Governor made the Medi-Cal expansion conditional on returning to the state a portion of the funds historically used to support care to the uninsured.  Pre-determining the exact impact of reform was extremely difficult, and it was therefore essential that the final legislation permit counties to base the amount of realignment to be redirected on actual experience, using a formula agreed upon between the state and counties.

Based on that agreement, there is an annual process that public health care systems go through to estimates the amount of redirection that will occur.  Preliminary estimates are included in the state budget for the upcoming year, with interim amounts withheld through the year, and then the counties and the state settle up after the fact based on actual experience.  CAPH works closely with the Department of Health Care Services and the State to ensure the accuracy of the calculations each year.

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