BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1315| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 SB 1315 Page 2 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 SB 1315 Page 3 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 SB 1315 Page 4 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 SB 1315 Page 5 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, SB 1315 Page 6 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 **** END ****