BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                 UNFINISHED BUSINESS


          Bill No:  SB 1315
          Author:   Monning (D)
          Amended:  6/30/14
          Vote:     21


           SENATE HEALTH COMMITTEE  :  8-0, 4/24/14
          AYES:  Hernandez, Morrell, Beall, De León, DeSaulnier, Evans,  
            Monning, Wolk
          NO VOTE RECORDED:  Nielsen

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           SENATE FLOOR  :  35-0, 5/28/14
          AYES:  Anderson, Beall, Berryhill, Block, Cannella, Corbett,  
            Correa, De León, DeSaulnier, Evans, Fuller, Gaines, Galgiani,  
            Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Leno, Lieu,  
            Liu, Mitchell, Monning, Morrell, Nielsen, Padilla, Pavley,  
            Roth, Steinberg, Torres, Vidak, Walters, Wolk, Wyland
          NO VOTE RECORDED:  Calderon, Knight, Lara, Wright, Yee

           ASSEMBLY FLOOR  :  78-0, 8/14/14 (Consent) - See last page for  
            vote


           SUBJECT  :    Medi-Cal:  providers

           SOURCE  :     Author


           DIGEST  :    This bill requires a notice of temporary suspension  
          issued to a health care provider by the Department of Health  
          Care Services (DHCS) Medi-Cal Provider Enrollment Division to  
                                                                CONTINUED





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          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, which must be at  
          least 60 days from the date the notice is issued and requires  
          the provider to be removed from enrollment as a Medi-Cal  
          provider if a provider fails to remediate the identified  
          discrepancies, as specified.

           Assembly Amendments  remove references to a provider receiving  
          two written notices from DHCS before being removed from  
          enrollment in Medi-Cal and make other technical changes.

           ANALYSIS  :    

          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 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 that are discovered as a result of an announced  
            or unannounced visit, for purposes of 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  







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            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, which must be at least 60 days from the date  
               the notice is issued.

          1.Requires DHCS to lift the temporary suspension and to notify  
            the provider that he/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.

          1.Requires, if a provider has received a site visit that results  
            in a notice of temporary suspension, and the provider fails to  
            remediate the discrepancies identified within the timeframe  
            specified, for DHCS to send the provider a notice stating that  
            the provider will be removed from enrollment as a provider in  
            the Medi-Cal program by operation of law based on failure to  
            remediate the discrepancies identified in the notice of  
            temporary suspension.

           Background  

           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  







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          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:

          1.Failing to report a change of address;

          2.Failing to be open and available to the general public;

          3.Failing to have regularly established and posted business  
            hours;

          4.Failing to report a change in ownership;

          5.Failing to have the necessary equipment and facilities to  
            carry out day-to-day business; and

          6.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, existing 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  
          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.

           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  







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          to conform to the federal Affordable Care Act (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.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Assembly Appropriations Committee, minor costs  
          to DHCS to revise regulations (General Fund/federal). 

           SUPPORT  :   (Verified  8/15/14)

          Department of Health Care Services


           ARGUMENTS IN SUPPORT  :    DHCS writes that the ACA requires  
          states to implement various program integrity provisions,  
          including terminating a provider from the Medi-Cal program for  
          non-compliance with program requirements.  DHCS states they have  
          implemented these provisions, however, no authority has been  
          granted to them 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 states  
          that current law 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.  DHCS believes that  
          authorizing the additional action to deactivate non-compliant  
          providers could also reduce the prevalence of fraud and increase  
          program integrity in compliance with the ACA.  DHCS states this  
          bill will provide DHCS with a corrective action plan to fully  
          address compliance issues.

           ASSEMBLY FLOOR  :  78-0, 8/14/14
          AYES:  Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,  
            Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian  
            Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,  
            Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,  
            Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,  
            Gorell, Gray, Grove, Hagman, Hall, Harkey, Holden, Jones,  
            Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,  







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            Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian,  
            Nestande, Olsen, Pan, Patterson, Perea, John A. Pérez, V.  
            Manuel Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,  
            Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,  
            Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
          NO VOTE RECORDED:  Roger Hernández, Vacancy


          JL:e  8/15/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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