Amended in Senate June 11, 2014

Amended in Senate May 22, 2014

Amended in Assembly April 29, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2051

Introduced by Assembly Members Gonzalez and Bocanegra

(Coauthor: Assembly Member V. Manuel Pérez)

February 20, 2014

An act to begin insert amend Section 24005 of, and to end insert add Section 14043.17 to begin insert , end insert the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

AB 2051, as amended, Gonzalez. Medi-Cal: providers: affiliate primary care clinics.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. begin insert Existing law also establishes the Family Planning, Access, Care, and Treatment (Family PACT) Program to provide comprehensive clinical family planning services to individuals who meet specified income requirements. Existing law provides for a schedule of benefits under the Medi-Cal program, including services provided under the Family PACT Program. end insert

Existing law authorizes the department to adopt regulations for certification of each applicant and each provider in the Medi-Cal program. Existing law requires certain applicants or providers, as defined, to submit a complete application package for enrollment, continuing enrollment, or enrollment at a new location or a change in location. Existing law generally requires the department to give written notice regarding the status of an application to an applicant or provider within a prescribed period of time, as specified.

This bill would require the department, begin insert except as specified, end insert within begin delete 15 days after end delete begin insert 30 calendar days of end insert receiving an application for enrollment as a Medi-Cal provider from an applicant that is an affiliate primary care clinic, to provide specified written notice begin delete of the status of the application, or to approve the application effective on the date the affiliate primary care clinic license was issued, as specified. The bill would also require the department, within 15 days after the approval of an application, to approve the provider’s requested participation in specified public health programs end delete begin insert to the applicant informing the applicant that its Medi-Cal enrollment is approved. The bill would require the department, if an affiliate primary care clinic’s Medi-Cal enrollment is not approved, to collaborate with the State Department of Public Health to ensure that the applicant receives written notification informing the applicant of any deficiencies and providing the applicant with an opportunity to cure the deficiencies within 30 days of the date of the written notice, as specified. The bill would impose similar requirements upon the department with respect to an application for enrollment into the Family PACT Program. The bill would require the department to concurrently review and approve an applicant’s Family PACT Program application and Medi-Cal enrollment, as specified, if an affiliate primary care clinic files its Family PACT Program application either before or on the same day that it files its affiliate primary care clinic licensure application with the State Department of Public Health. The bill would also make the effective date of enrollment into both programs retroactive to the date Medi-Cal certification was approved by the State Department of Public Health end insert .

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 14043.17 is added to the Welfare and
Institutions Code, to read:

14043.17.  

(a) Notwithstanding any other law, begin insert and except as
provided in subdivision (b), end insert within begin delete 15 end delete begin insert 30 calendar end insert days of
receiving an application for enrollment as a Medi-Cal provider
from an affiliate primary care clinic that is licensed pursuant to
Section 1218.1 of the Health and Safety Code and that has been
certified for enrollment by the State Department of Public Health,
the department shall begin delete do either of the following: end delete begin insert provide written
notice to the applicant informing the applicant that its Medi-Cal
enrollment is approved. end insert

begin delete

(1) Provide written notice to the applicant that one of the
following applies:

(A) The applicant is being granted provisional provider status
for a period of 12 months, effective from the date on the notice.

(B) The application package is incomplete. The notice shall
identify additional information or documentation that is needed to
complete the application package.

(C) The application package is denied for any of the following
reasons:

(i) Pursuant to Section 14043.2 or 14043.36.

(ii) For lack of a primary care clinic license.

(iii) The period of time during which an applicant or provider
has been barred from reapplying has not passed.

(iv) For other stated reasons authorized by law.

(v) For failing to submit fingerprints as required by federal
Medicaid regulations.

(vi) For failing to pay an application fee as required by federal
Medicaid regulations.

(2) Approve the application effective on the date the affiliate
primary care clinic license was issued by the State Department of
Public Health.

(b) On the 16th day after receiving the application, if action is
not taken pursuant to paragraph (1) or (2) of subdivision (a), then
the application is deemed approved and that approval is effective
on the date the affiliate primary care clinic license was issued by
the State Department of Public Health.

(c) Notwithstanding any other law, within 15 days of the
approval of an application pursuant to subdivision (a) or (b), the
department shall approve the provider’s requested participation in
any of the programs described in Section 1222 of the Health and
Safety Code. On the 16th day after approving the application, if
action is not taken, the provider’s requested participation in any
of those programs is deemed approved.

end delete begin insert

(b) If an affiliate primary care clinic’s Medi-Cal enrollment is
not approved, the department shall collaborate with the State
Department of Public Health to ensure that the applicant receives
written notification informing the applicant of any deficiencies
and providing the applicant with an opportunity to cure the
deficiencies within 30 days of the date of the written notice. The
department shall have 30 days from the receipt of information
from the applicant under this subdivision to approve or deny the
Medi-Cal enrollment.

end insert begin insert

(c) The department shall enroll the affiliate primary care clinic
retroactive to the date of certification.

end insert

(d) This section shall not be construed to limit the department’s
authority pursuant to Section 14043.37, 14043.4, or 14043.7 to
conduct background checks, preenrollment inspections, or
unannounced visits.

begin insert

begin insert SEC. end insert begin insert 2. end insert   

end insert

begin insert Section 24005 of the end insert begin insert Welfare and Institutions Code end insert begin insert is
amended to read: end insert

24005.  

(a) This section shall apply to the Family Planning begin insert , end insert
Access begin insert , end insert Care begin insert , end insert and Treatment begin delete Waiver program end delete begin insert Program end insert identified
in subdivision (aa) of Section 14132 and this program.

(b) Only licensed medical personnel with family planning skills,
knowledge, and competency may provide the full range of family
planning medical services covered in this program.

(c) Medi-Cal enrolled providers, as determined by the
department, shall be eligible to provide family planning services
under the program when these services are within their scope of
practice and licensure. Those clinical providers electing to
participate in the program and approved by the department shall
provide the full scope of family planning education, counseling,
and medical services specified for the program, either directly or
by referral, consistent with standards of care issued by the
department.

(d) The department shall require providers to enter into clinical
agreements with the department to ensure compliance with
standards and requirements to maintain the fiscal integrity of the
program. Provider applicants, providers, and persons with an
ownership or control interest, as defined in federal medicaid
regulations, shall be required to submit to the department their
social security numbers to the full extent allowed under federal
law. All state and federal statutes and regulations pertaining to the
audit or examination of Medi-Cal providers shall apply to this
program.

(e) Clinical provider agreements shall be signed by the provider
under penalty of perjury. The department may screen applicants
at the initial application and at any reapplication pursuant to
requirements developed by the department to determine provider
suitability for the program.

(f) The department may complete a background check on clinical
provider applicants for the purpose of verifying the accuracy of
information provided to the department for purposes of enrolling
in the program and in order to prevent fraud and abuse. The
background check may include, but not be limited to, unannounced
onsite inspection prior to enrollment, review of business records,
and data searches. If discrepancies are found to exist during the
preenrollment period, the department may conduct additional
inspections prior to enrollment. Failure to remediate significant
discrepancies as prescribed by the director may result in denial of
the application for enrollment. Providers that do not provide
services consistent with the standards of care or that do not comply
with the department’s rules related to the fiscal integrity of the
program may be disenrolled as a provider from the program at the
sole discretion of the department.

(g) The department shall not enroll any applicant who, within
the previous 10 years:

(1) Has been convicted of any felony or misdemeanor that
involves fraud or abuse in any government program, that relates
to neglect or abuse of a patient in connection with the delivery of
a health care item or service, or that is in connection with the
interference with, or obstruction of, any investigation into health
care related fraud or abuse.

(2) Has been found liable for fraud or abuse in any civil
proceeding, or that has entered into a settlement in lieu of
conviction for fraud or abuse in any government program.

(h) In addition, the department may deny enrollment to any
applicant that, at the time of application, is under investigation by
the department or any local, state, or federal government law
enforcement agency for fraud or abuse. The department shall not
deny enrollment to an otherwise qualified applicant whose felony
or misdemeanor charges did not result in a conviction solely on
the basis of the prior charges. If it is discovered that a provider is
under investigation by the department or any local, state, or federal
government law enforcement agency for fraud or abuse, that
provider shall be subject to immediate disenrollment from the
program.

(i) (1) The program shall disenroll as a program provider any
individual who, or any entity that, has a license, certificate, or other
approval to provide health care, which is revoked or suspended
by a federal, California, or other state’s licensing, certification, or
other approval authority, has otherwise lost that license, certificate,
or approval, or has surrendered that license, certificate, or approval
while a disciplinary hearing on the license, certificate, or approval
was pending. The disenrollment shall be effective on the date the
license, certificate, or approval is revoked, lost, or surrendered.

(2) A provider shall be subject to disenrollment if the provider
submits claims for payment for the services, goods, supplies, or
merchandise provided, directly or indirectly, to a program
beneficiary, by an individual or entity that has been previously
suspended, excluded, or otherwise made ineligible to receive,
directly or indirectly, reimbursement from the program or from
the Medi-Cal program and the individual has previously been listed
on either the Suspended and Ineligible Provider List, which is
published by the department, to identify suspended and otherwise
ineligible providers or any list published by the federal Office of
the Inspector General regarding the suspension or exclusion of
individuals or entities from the federal Medicare and medicaid
programs, to identify suspended, excluded, or otherwise ineligible
providers.

(3) The department shall deactivate, immediately and without
prior notice, the provider numbers used by a provider to obtain
reimbursement from the program when warrants or documents
mailed to a provider’s mailing address, its pay to address, or its
service address, if any, are returned by the United States Postal
Service as not deliverable or when a provider has not submitted a
claim for reimbursement from the program for one year. Prior to
taking this action, the department shall use due diligence in
attempting to contact the provider at its last known telephone
number and to ascertain if the return by the United States Postal
Service is by mistake and shall use due diligence in attempting to
contact the provider by telephone or in writing to ascertain whether
the provider wishes to continue to participate in the Medi-Cal
program. If deactivation pursuant to this section occurs, the
provider shall meet the requirements for reapplication as specified
in regulation.

(4) For purposes of this subdivision:

(A) “Mailing address” means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive general program
correspondence.

(B) “Pay to address” means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive warrants.

(C) “Service address” means the address that the provider has
identified to the department in its application for enrollment as the
address at which the provider will provide services to program
beneficiaries.

(j) Subject to Article 4 (commencing with Section 19130) of
Chapter 5 of begin insert Part 2 of end insert Division 5 of Title 2 of the Government
Code, the department may enter into contracts to secure consultant
services or information technology including, but not limited to,
software, data, or analytical techniques or methodologies for the
purpose of fraud or abuse detection and prevention. Contracts
under this section shall be exempt from the Public Contract Code.

(k) Enrolled providers shall attend specific orientation approved
by the department in comprehensive family planning services.
Enrolled providers who insert IUDs or contraceptive implants shall
have received prior clinical training specific to these procedures.

(l) Upon receipt of reliable evidence that would be admissible
under the administrative adjudication provisions of Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title
2 of the Government Code, of fraud or willful misrepresentation
by a provider under the program or commencement of a suspension
under Section 14123, the department may do any of the following:

(1) Collect any State-Only Family Planning program or Family
Planning begin insert , end insert Access begin insert , end insert Care begin insert , end insert and Treatment begin delete Waiver program end delete begin insert Program end insert
overpayment identified through an audit or examination, or any
portion thereof from any provider. Notwithstanding Section 100171
of the Health and Safety Code, a provider may appeal the collection
of overpayments under this section pursuant to procedures
established in Article 5.3 (commencing with Section 14170) of
begin insert Chapter 7 of end insert Part 3 of Division 9. Overpayments collected under
this section shall not be returned to the provider during the
pendency of any appeal and may be offset to satisfy audit or appeal
findings, if the findings are against the provider. Overpayments
shall be returned to a provider with interest if findings are in favor
of the provider.

(2) Withhold payment for any goods or services, or any portion
thereof, from any State-Only Family Planning program or Family
Planning Access Care and Treatment begin delete Waiver program end delete begin insert Program end insert
provider. The department shall notify the provider within five days
of any withholding of payment under this section. The notice shall
do all of the following:

(A) State that payments are being withheld in accordance with
this paragraph and that the withholding is for a temporary period
and will not continue after it is determined that the evidence of
fraud or willful misrepresentation is insufficient or when legal
proceedings relating to the alleged fraud or willful
misrepresentation are completed.

(B) Cite the circumstances under which the withholding of the
payments will be terminated.

(C) Specify, when appropriate, the type or types of claimed
payments being withheld.

(D) Inform the provider of the right to submit written evidence
that is evidence that would be admissible under the administrative
adjudication provisions of Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code,
for consideration by the department.

(3) Notwithstanding Section 100171 of the Health and Safety
Code, a provider may appeal a withholding of payment under this
section pursuant to Section 14043.65. Payments withheld under
this section shall not be returned to the provider during the
pendency of any appeal and may be offset to satisfy audit or appeal
findings.

(m) As used in this section:

(1) “Abuse” means either of the following:

(A) Practices that are inconsistent with sound fiscal or business
practices and result in unnecessary cost to the medicaid program,
the Medicare program, the Medi-Cal program, including the Family
Planning begin insert , end insert Access begin insert , end insert Care begin insert , end insert and Treatment begin delete Waiver program, end delete begin insert Program, end insert
identified in subdivision (aa) of Section 14132, another state’s
medicaid program, or the State-Only Family Planning program,
or other health care programs operated, or financed in whole or in
part, by the federal government or any state or local agency in this
state or any other state.

(B) Practices that are inconsistent with sound medical practices
and result in reimbursement, by any of the programs referred to
in subparagraph (A) or other health care programs operated, or
financed in whole or in part, by the federal government or any
state or local agency in this state or any other state, for services
that are unnecessary or for substandard items or services that fail
to meet professionally recognized standards for health care.

(2) “Fraud” means an intentional deception or misrepresentation
made by a person with the knowledge that the deception could
result in some unauthorized benefit to himself or herself or some
other person. It includes any act that constitutes fraud under
applicable federal or state law.

(3) “Provider” means any individual, partnership, group,
association, corporation, institution, or entity, and the officers,
directors, owners, managing employees, or agents of any
partnership, group, association, corporation, institution, or entity,
that provides services, goods, supplies, or merchandise, directly
or indirectly, to a beneficiary and that has been enrolled in the
program.

(4) “Convicted” means any of the following:

(A) A judgment of conviction has been entered against an
individual or entity by a federal, state, or local court, regardless
of whether there is a post-trial motion or an appeal pending or the
judgment of conviction or other record relating to the criminal
conduct has been expunged or otherwise removed.

(B) A federal, state, or local court has made a finding of guilt
against an individual or entity.

(C) A federal, state, or local court has accepted a plea of guilty
or nolo contendere by an individual or entity.

(D) An individual or entity has entered into participation in a
first offender, deferred adjudication, or other program or
arrangement where judgment of conviction has been withheld.

(5) “Professionally recognized standards of health care” means
statewide or national standards of care, whether in writing or not,
that professional peers of the individual or entity whose provision
of care is an issue, recognize as applying to those peers practicing
or providing care within a state. When the United States
Department of Health and Human Services has declared a treatment
modality not to be safe and effective, practitioners that employ
that treatment modality shall be deemed not to meet professionally
recognized standards of health care. This definition shall not be
construed to mean that all other treatments meet professionally
recognized standards of care.

(6) “Unnecessary or substandard items or services” means those
that are either of the following:

(A) Substantially in excess of the provider’s usual charges or
costs for the items or services.

(B) Furnished, or caused to be furnished, to patients, whether
or not covered by Medicare, medicaid, or any of the state health
care programs to which the definitions of applicant and provider
apply, and which are substantially in excess of the patient’s needs,
or of a quality that fails to meet professionally recognized standards
of health care. The department’s determination that the items or
services furnished were excessive or of unacceptable quality shall
be made on the basis of information, including sanction reports,
from the following sources:

(i) The professional review organization for the area served by
the individual or entity.

(ii) State or local licensing or certification authorities.

(iii) Fiscal agents or contractors, or private insurance companies.

(iv) State or local professional societies.

(v) Any other sources deemed appropriate by the department.

(7) “Enrolled or enrollment in the program” means authorized
under any and all processes by the department or its agents or
contractors to receive, directly or indirectly, reimbursement for
the provision of services, goods, supplies, or merchandise to a
program beneficiary.

(n) In lieu of, or in addition to, the imposition of any other
sanctions available, including the imposition of a civil penalty
under Sections 14123.2 or 14171.6, the program may impose on
providers any or all of the penalties pursuant to Section 14123.25,
in accordance with the provisions of that section. In addition,
program providers shall be subject to the penalties contained in
Section 14107.

(o) (1) Notwithstanding any other provision of law, every
primary supplier of pharmaceuticals, medical equipment, or
supplies shall maintain accounting records to demonstrate the
manufacture, assembly, purchase, or acquisition and subsequent
sale, of any pharmaceuticals, medical equipment, or supplies, to
providers. Accounting records shall include, but not be limited to,
inventory records, general ledgers, financial statements, purchase
and sales journals, and invoices, prescription records, bills of
lading, and delivery records.

(2) For purposes of this subdivision, the term “primary supplier”
means any manufacturer, principal labeler, assembler, wholesaler,
or retailer.

(3) Accounting records maintained pursuant to paragraph (1)
shall be subject to audit or examination by the department or its
agents. The audit or examination may include, but is not limited
to, verification of what was claimed by the provider. These
accounting records shall be maintained for three years from the
date of sale or the date of service.

(p) Each provider of health care services rendered to any
program beneficiary shall keep and maintain records of each service
rendered, the beneficiary to whom rendered, the date, and such
additional information as the department may by regulation require.
Records required to be kept and maintained pursuant to this
subdivision shall be retained by the provider for a period of three
years from the date the service was rendered.

(q) A program provider applicant or a program provider shall
furnish information or copies of records and documentation
requested by the department. Failure to comply with the
department’s request shall be grounds for denial of the application
or automatic disenrollment of the provider.

(r) A program provider may assign signature authority for
transmission of claims to a billing agent subject to Sections 14040,
14040.1, and 14040.5.

(s) Moneys payable or rights existing under this division shall
be subject to any claim, lien, or offset of the State of California,
and any claim of the United States of America made pursuant to
federal statute, but shall not otherwise be subject to enforcement
of a money judgment or other legal process, and no transfer or
assignment, at law or in equity, of any right of a provider of health
care to any payment shall be enforceable against the state, a fiscal
intermediary, or carrier.

begin insert

(t) (1) Notwithstanding any other law, and only with respect
to a Medi-Cal provider that is also an affiliate primary care clinic
licensed under Section 1218.1 of the Health and Safety Code, the
department shall, within 30 calendar days of receiving a complete
application for enrollment into the Family PACT Program, do one
of the following:

end insert begin insert

(A) Approve the provider’s Family PACT Program application,
provided the applicant meets the Family PACT Program provider
eligibility requirements set forth in this section.

end insert begin insert

(B) Notify the applicant in writing of any deficiencies in the
Family PACT Program enrollment application. The applicant
shall have 30 days from the date of written notice to correct any
cited deficiencies. Upon receipt of all requested corrections, the
department shall approve the application within 30 calendar days.

end insert begin insert

(2) If an affiliate primary care clinic files its Family PACT
Program application either before or on the same day that it files
its affiliate primary care clinic licensure application with the State
Department of Public Health, the department shall concurrently
review and approve the applicant’s Family PACT Program
application and Medi-Cal enrollment in accordance with this
subdivision and Section 14043.17. The effective date of enrollment
into both programs shall be retroactive to the date Medi-Cal
certification was approved by the State Department of Public
Health.

end insert