Quality Assurance Fee Program

Intermediate Care Facility (ICF/DD)

The Quality Assurance Fee (QAF) program is governed by the California Health and Safety Code, Sections 1324 through 1324.14.  These provisions require the California Department of Health Care Services to impose a quality assurance fee of 5.5 percent of the entire gross receipts for each Intermediate Care Facility for the Developmentally Disabled (ICF/DD), Habilitative (ICF/DD-H) and Nursing (ICF/DD-N).  For the purposes of this program, the term "gross receipts" is defined as compensation for services provided to residents of a designated ICF, not including the following:

1. Return of any amounts to the payer as a result of overpayments
2. Bad debts
3. Vendor rebates received by the facility
4. Charitable contributions received by the facility

As a condition for the ICFs to participate in the Medi-Cal program, payments to the DHCS must be made on or before the last day of each calendar quarter following the calendar quarter for which the fee is imposed.  The DHCS has the discretion to make retrospective adjustments as necessary to ensure that the fees collected do not exceed the 5.5 percent.

A per-diem add-on will be added to the regular reimbursement rate for each patient day of service during each quarter in accordance with California's Medicaid State Plan.  The add-on will be computed annually to provide reimbursement for the fee paid by the ICF as a part of their Medi-Cal reimbursements.  In many cases, the add-on to the rate will exceed the amount of the fee paid, reflecting other extraordinary costs experienced by the facilities. 

The enabling legislation for the program gives the director of the DHCS the option of implementing the program by means of a provider bulleting, or other similar instructions, without taking regulatory action.