BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: SB 1315 AUTHOR: Monning AMENDED: April 3, 2014 HEARING DATE: April 24, 2014 CONSULTANT: Bain SUBJECT : Medi-Cal: providers. SUMMARY : Requires a notice of temporary suspension issued to a health care provider by the Department of Health Care Services Medi-Cal Provider Enrollment Division to include a list of discrepancies required to be remediated and the timeframe in which a provider can demonstrate that the discrepancies identified have been remediated. Requires the provider to be removed from enrollment as a Medi-Cal provider if a provider fails to remediate the discrepancies identified. Existing law: 1.Requires an applicant, a health care provider who is licensed or certificated under state law or who is a professional corporation, to be enrolled in the Medi-Cal program as either an individual provider or as a rendering provider in a provider group for each application package submitted and approved. 2.Requires an applicant that currently is not enrolled in the Medi-Cal program, or a provider applying for continued enrollment (upon written notification from the Department of Health Care Services (DHCS), and a provider not currently enrolled at a location where the provider intends to provide services to Medi-Cal beneficiaries, to submit a complete application package to DHCS for enrollment, continuing enrollment, or enrollment at a new location or a change in location. 3.Makes a provider subject to temporary suspension from the Medi-Cal program, which includes temporary deactivation of the provider's number, including all business addresses used by the provider to obtain reimbursement from the Medi-Cal program if the provider has failed to remediate significant discrepancies in information provided to DHCS by the provider or significant discrepancies that are discovered as a result of an announced or unannounced visit, for purposes of Continued--- SB 1315 | Page 2 enrollment, continued enrollment, or certification. 4.Requires the DHCS director to notify the provider in writing of the temporary suspension and deactivation of provider numbers, which is required to take effect 15 days from the date of the notification. This bill: 1.Requires a notice of temporary suspension to a Medi-Cal provider to include the following: a. A list of discrepancies required to be remediated; and, b. The timeframe in which a provider may demonstrate to DHCS that the discrepancies identified have been remediated. 2.Requires DHCS to lift the temporary suspension and to notify the provider that he or she is eligible to receive Medi-Cal reimbursement for services provided after the date the temporary suspension was lifted if a provider demonstrates to DHCS that: a. The discrepancies identified have been remediated; and, b. The provider meets the standards of participation within the timeframe specified. 3.Requires a provider who has received a notice of temporary suspension to be removed from enrollment as a Medi-Cal provider by operation of law, if a provider fails to remediate the discrepancies identified within the timeframe specified. FISCAL EFFECT : This bill has not been heard by a fiscal committee. COMMENTS : 1.Author's statement. According to the author, for the few Medi-Cal fee-for-service providers who fail to remediate deficiencies and are subject to existing temporary suspension and deactivation requirements, there is a gap of enforcement that must be cleaned up. Current law fails to require any final action pertaining to providers temporarily suspended and temporarily deactivated as part of administrative enforcement actions. Requiring the additional action to deactivate under this bill closes this gap, and has the potential to reduce the SB 1315 | Page 3 prevalence of fraud and increase program integrity in the Medi-Cal program and compliance with the Affordable Care Act (ACA). 2.Background on Medi-Cal Provider Enrollment Process. State law governing Medi-Cal and federal Medicaid law and regulations contain provisions to prevent and address fraud in the Medicaid program. For example, existing state law requires a health care provider seeking to provide services in the fee-for-service Medi-Cal program to submit a complete application package for enrollment, continued enrollment, enrollment at a new location or a change in location. DHCS' Provider Enrollment Division indicates it receives 1,400 applications from providers each month. Existing law authorizes DHCS to temporarily suspend and temporarily deactivate a provider when DHCS discovers that the provider cannot demonstrate program compliance. DHCS informs a provider of discrepancies that must be remediated when issuing a letter to the provider informing them of the temporary suspension. Examples of issues that warrant a temporary suspension include: a. Failing to report a change of address; b. Failing to be open and available to the general public; c. Failing to have regularly established and posted business hours; d. Failing to report a change in ownership; e. Failing to have the necessary equipment and facilities to carry out day-to-day business; and, f. Failing to have the appropriate business or professional license. However, DHCS does have the authority to take a final action against a provider if the provider fails to remediate the deficiencies that triggered the temporary suspension or deactivation. In addition, current law also does not specify a time period for a provider to become compliant, nor does it specify the timeframe a temporary suspension can remain in place. A provider subject to a temporary suspension cannot receive reimbursement from the Medi-Cal program. A provider who is SB 1315 | Page 4 subject to a temporary suspension can appeal DHCS' decision, and a provider who is removed from Medi-Cal as a result of a temporary suspension can also reapply. 1.Prior legislation. SB 1529 (Alquist), Chapter 797, Statutes of 2012, revises screening, enrollment, disenrollment, suspensions, and other sanctions for fee-for service Medi-Cal providers and suppliers to conform to the federal ACA. SB 857 (Speier), Chapter 601, Statutes of 2003, made numerous changes to the Medi-Cal program intended to address provider fraud, including establishing new Medi-Cal application requirements for new providers, existing providers at new locations, and providers applying for continued enrollment. 2.Support. DHCS writes in support that existing law does not grant it the authority to take a final action against a provider if the provider fails to remediate the deficiencies that triggered the temporary suspension or deactivation. In addition, DHCS argues current law does not specify a time period for a provider to become compliant or a timeframe a temporary suspension can remain in place. This bill would provide DHCS with a corrective action plan to fully address program compliance issues found in an application or discovered during an on-site inspection. DHCS concludes that authorizing the additional action to deactivate noncompliant providers could also reduce the prevalence of fraud and increase program integrity. 3.Amendments. This bill refers in two places to a timeframe to remediate discrepancies but it does not establish a timeframe in this bill. DHCS indicates the current temporary suspension notice issued by DHCS does not specify a timeframe for remediation. An amendment is needed to clarify this provision. SUPPORT AND OPPOSITION : Support: Department of Health Care Services Oppose: None received -- END - SB 1315 | Page 5