BILL NUMBER: SB 1699 CHAPTERED 09/21/02 CHAPTER 768 FILED WITH SECRETARY OF STATE SEPTEMBER 21, 2002 APPROVED BY GOVERNOR SEPTEMBER 20, 2002 PASSED THE SENATE AUGUST 22, 2002 PASSED THE ASSEMBLY AUGUST 15, 2002 AMENDED IN ASSEMBLY AUGUST 12, 2002 AMENDED IN ASSEMBLY JUNE 20, 2002 INTRODUCED BY Senator Ortiz FEBRUARY 21, 2002 An act to add Section 100185.5 to the Health and Safety Code, relating to public health. LEGISLATIVE COUNSEL'S DIGEST SB 1699, Ortiz. Health care programs: denial of continued enrollment, suspension, and withholding of payment. Existing law imposes various functions and duties on the State Department of Health Services and the Director of Health Services with respect to the administration and oversight of various health programs and facilities, including the Medi-Cal program. Existing law provides that a Medi-Cal provider may be denied continued enrollment in, suspension from, or have payments withheld in connection with, the Medi-Cal program, if certain actions relating to fraud, abuse, or misrepresentation have been found to have taken place. This bill would require the director to review the evidence supporting the denial of continued enrollment, suspension, or withholding of payments in cases where there is evidence of fraud, abuse, or willful misrepresentation on the part of a provider, as defined, for any health care program administered by the department, including the Medi-Cal program, and would authorize the director to deny continued enrollment, suspend, or withhold payments to, an applicant or provider with respect to other health care programs administered by the department if the director finds that certain conditions relating to fraud, abuse, and willful misrepresentation exist. The bill would also authorize the director to deny the application of an applicant or provider to participate in any health care program administered by the department when certain conditions relating to fraud, abuse, or willful misrepresentation exist or when utilization controls have been imposed on an applicant or provider. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 100185.5 is added to the Health and Safety Code, to read: 100185.5. (a) When a letter or order of denial of continued enrollment or suspension of any type or duration, based upon fraud or abuse, or a withholding of payments, based upon reliable evidence of fraud or willful misrepresentation, is issued by the department to a provider, the director shall review the evidence supporting the denial of continued enrollment, suspension, or withholding of payments. If, in the opinion of the director, the evidence shows a pattern or practice of fraud, abuse, or willful misrepresentation that, if replicated in any other health care program administered by the department, could cause either fiscal loss to the state or harm to any participant, the director may deny continued enrollment, suspend, or withhold payments to, the provider with respect to those other health care programs. Any denial of continued enrollment, suspension, or withholding of payments may be for an indefinite or definite period of time, may be stayed for a period of time, and may be with or without conditions or probation. (b) The director may deny the application of an applicant or provider to participate in any health care program administered by the department, when, based upon fraud or abuse, the applicant or provider has been denied continued enrollment in, or suspended from, any health care program administered by the department, or has had payments withheld based upon reliable evidence of fraud or willful misrepresentation in connection with any health care program administered by the department, and remains ineligible to participate in the health care program from which the applicant or provider was denied continued enrollment, suspended, or had payments withheld. (c) The director may deny any new or additional application of a provider to participate in any health care program administered by the department if utilization controls including, but not limited to, prior authorization or special claims review pursuant to Sections 51159, 51455, and 51460 of Title 22 of the California Code of Regulations have been imposed upon that provider by any health care program administered by the department. Applications shall not be denied based solely upon utilization controls imposed upon an entire class or category of providers to which that provider belongs. (d) Notwithstanding any other provision of law, any provider or applicant who has been denied continued enrollment in, or suspended from, or who has had payments withheld in connection with, any health care program administered by the department, or whose application to participate in a health care program administered by the department is denied, pursuant to this section, may appeal that action in accordance with Section 14043.65 of the Welfare and Institutions Code. (e) For purposes of this section, the following definitions apply: (1) "Abuse" has the same meaning as that term is defined in Section 14043.1 of the Welfare and Institutions Code. (2) "Administered by the department" means administered by the State Department of Health Services or by its agents or contractors on behalf of the State Department of Health Services. (3) "Applicant" means any person, individual, partnership, group, association, corporation, institution, or entity, and the officers, directors, owners, managing employees, or agents thereof, that applies to the department for enrollment as a provider or participation as a provider in a health care program administered by the department. (4) "Fraud" has the same meaning as that term is defined in Section 14043.1 of the Welfare and Institutions Code. (5) "Provider" means any person, individual, partnership, group, association, corporation, institution, or entity, and the officers, directors, owners, managing employees, or agents thereof, that provides services, goods, supplies, or merchandise, directly or indirectly, to a person enrolled in a health care program administered by the department. (6) "Withholding of payments" means the withholding of payments in accordance with Section 14107.11 of the Welfare and Institutions Code. (f) For purposes of this section, "suspension" includes, but is not limited to, suspensions authorized under Article 1.3 (commencing with Section 14043) or Article 3 (commencing with Section 14123) of Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code. (g) For purposes of this section, "health care program administered by the department" includes, but is not limited to, the Medi-Cal program.