Calculation of Medi-Cal Fiscal Penalties.

(a)

The Department shall calculate the fiscal penalty for a liable county for each monitoring period as follows:

(b)

The penalty bank shall include only quality control federal fiscal sanctions, federal withholds, federal disallowances, and any associated General Fund expenditures, minus the value of any state assumed errors and the General Fund share of the value of client caused errors.

(c)

The case error rate and penalty multiple shall be adjusted by excluding client errors for the purpose of determining the associated General Fund expenditures.

(d)

If the Federal Government reduces or eliminates any quality control federal fiscal sanction, federal withhold or federal disallowance assessed a county as a penalty, the Department shall reduce or eliminate the corresponding fiscal penalty assessment including any associated General Fund expenditures to liable counties.

(e)

The monitoring period shall be the federal fiscal year. Fiscal penalties shall apply to the entire monitoring period. The first monitoring period shall begin October 1, 1988.