California Code, Welfare and Institutions Code - WIC § 14178

(a) Counties shall be held harmless in accordance with the provisions of this section for state funds to be recouped pursuant to audit exceptions issued for acts performed prior to July 1, 1982.

(b) Audit exception for the purpose of this section shall be defined as follows: Demands for recovery resulting from those audit reports issued by the Department of Health Services in which no final settlement or administrative decision adopted by the director has been arrived at prior to the effective date of this section.

(c) Such forgiveness of audit exceptions shall apply only to the state's share of payments made in support of the Medi-Cal program. Counties shall retain liability for payment of the federal portion of payments made for Medi-Cal services unless and until the federal government agrees to waive their rights for repayment of federal share.

(d) Audit exceptions regarding county claims related to nonprogram benefits shall remain unaffected by the provisions of the section. County claims for nonprogram benefits shall include claims for return on equity, claims for bad debts, claims for uncompensated care, and any other claims not compensable pursuant to Title XIX of the federal Social Security Act.  1

(e) The amount of the recoupment of the federal portion of valid audit exceptions pursuant to subdivision (c) shall be determined pursuant to the existing administrative appeals process.

(f) No provision of this section shall apply to any audit report issued by the Department of Health Services after the effective date of this section relating to acts performed subsequent to July 1, 1982.