Creates the hospital safety net assessment and hospital safety net assessment fund to allow the state to generate additional federal financial participation for the medicaid program and provide for increased reimbursement to hospitals.

Imposes a hospital safety net assessment, the funds of which are to be used solely to augment all other funding sources and not as a substitute for any other funds.

Intends: (1) That the total amount assessed not exceed the amount needed, in combination with all other available funds, to support the reimbursement rates and other payments authorized by the act; and

(2) To condition the assessment on receiving federal approval for receipt of additional federal financial participation and on continuation of other funding sufficient to maintain hospital inpatient and outpatient reimbursement rates and small rural disproportionate share payments at least at the levels in effect on June 30, 2009.

Requires the department of social and health services to design a system of hospital performance incentive payments.

Expires July 1, 2013.