Amended in Senate June 22, 2016

Amended in Senate May 10, 2016

Amended in Assembly January 26, 2016

Amended in Assembly January 4, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1244


Introduced by Assembly Member Gray

February 27, 2015


An actbegin insert to amend Section 139.2 of, andend insert to add Sectionbegin delete 5307.15 toend deletebegin insert 139.21 to,end insert the Labor Code, and to amend Section 14123 of the Welfare and Institutions Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

AB 1244, as amended, Gray. Workers’ compensation: providers:begin delete suspension and revocation.end deletebegin insert suspension.end insert

Under existing law, the Director of Health Care Services is authorized, for purposes of administering the Medi-Cal program, to suspend a provider of service from further participation under the program for specified reasons, including conviction of any felony or any misdemeanor involving fraud, abuse of the Medi-Cal program or any patient, or otherwise substantially related to the qualifications, functions, or duties of a provider of service. Existing law requires the director, upon receipt of written notification from the Secretary of the United States Department of Health and Human Services that a physician or other individual practitioner has been suspended from participation in the Medicare or Medicaid programs, to promptly suspend the practitioner from participation in the Medi-Cal program.

Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, that generally requires employers to secure the payment of workers’ compensation for injuries incurred by their employees that arise out of, or in the course of, employment. Existing law requires an employer to provide all medical services reasonably required to cure or relieve the injured worker from the effects of the injury.

Existing law authorizes an insurer, employer, or entity that provides physician network services to establish or modify a medical provider network for the provision of medical treatment to injured employees and requires the administrative director to contract with individual physicians or an independent medical review organization to perform medical provider network independent medical reviews. Existing law also requires the administrative director to appoint qualified medical evaluators in each of the respective specialties as required for the evaluation of medical-legal issues.begin insert Existing law requires the administrative director to terminate from the list of medical evaluators a physician who has been subject to disciplinary action by the relevant licensing board or who has been convicted of a misdemeanor or felony related to the conduct of his or her medical practice.end insert

begin delete

This bill would require the Director of Health Care Services to notify the administrative director of a suspension imposed pursuant to the above provisions and would require the administrative director, upon that notification, to promptly suspend the physician or practitioner from participating in the workers’ compensation system in any capacity, including, but not limited to, participation as a qualified medical examiner, a treating provider in a medical provider network, or an independent medical reviewer. The bill would require the administrative director to adopt regulations establishing criteria for revocation of a suspended physician’s or practitioner’s participation in the workers’ compensation system, subject to specified notice and hearing requirements.

end delete

This bill would require the administrative director tobegin insert promptly suspend any physician or practitioner from participating in the workers’ compensation system in any capacity when the individual or entity meets specified criteria, including when that individual has been convicted of a felony or any one of specified misdemeanors involving fraud or abuse, when that individual’s license, certificate, or approval to provide health care has been surrendered or revoked, or when that individual or entity has been suspended, due to fraud or abuse, from participation in the Medicare or Medicaid programs. The bill would require the administrative director to adopt regulations for suspending a physician’s or practitioner’s participation in the workers’ compensation system pursuant to these provisions, as specified, and would require the administrative director to furnish to the physician or practitioner written notice of the right to a hearing regarding the suspension and the procedure to follow to request that hearing. If a physician is a qualified medical examiner, and the department finds that the physician meets the criteria for suspension pursuant to these provisions, the bill would require the administrative director to terminate the physician from the list of medical evaluators. The bill would also require the administrative director toend insert notify the appropriate state licensing entity of a physician’s or practitioner’s suspensionbegin delete or revocationend delete and to update relevant provider databases of qualified medical evaluators and medical provider networks. The bill would prohibitbegin insert a provider of services from submitting or pursuend insertbegin insertingend insert claims for payment for services or supplies provided by abegin delete providerend deletebegin insert physician or practitionerend insert whose participation in the workers’ compensation system has beenbegin delete suspended or revoked, except under specified circumstances.end deletebegin insert suspended, unless that claim for payment has been reduced to final judgment or the services or supplies are unrelated to a violation of the laws governing workers’ compensation.end insert

begin insert

The bill would also require the Director of Health Care Services to notify the administrative director of a suspension of a physician from participation in the Medi-Cal program imposed pursuant to the provisions described above authorizing the director to suspend a provider of services from participation.

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:

begin delete
P3    1

SECTION 1.  

Section 5307.15 is added to the Labor Code, to
2read:

3

5307.15.  

(a) (1) Whenever the administrative director receives
4written notification from the Director of Health Care Services
5pursuant to Section 14123 of the Welfare and Institutions Code
6that a physician or other individual practitioner has been suspended
7from participation in the Medi-Cal program, the administrative
8director shall promptly suspend the physician or practitioner from
9participating in the workers’ compensation system in any capacity,
P4    1including, but not limited to, participation as a qualified medical
2examiner, a treating provider in a medical provider network, or a
3medical provider network independent medical reviewer.

4(2) The administrative director also shall exercise due diligence
5to identify physicians and practitioners who have been suspended
6as described in subdivision (a) by accessing the quarterly updates
7to the list of suspended and ineligible providers maintained by the
8State Department of Health Care Services for the Medi-Cal
9program at
10https://files.medi-cal.ca.gov/pubsdoco/SandILanding.asp.

11(b) (1) The administrative director shall adopt regulations
12establishing criteria for revocation of a suspended physician’s or
13practitioner’s participation in the workers’ compensation system,
14subject to the notice and hearing requirements in paragraph (2).

15(2) The administrative director shall serve the physician or
16practitioner with written notice of the specific basis for revocation
17of his or her participation in the workers’ compensation system
18and shall set a hearing within 30 days of the date of service on the
19physician or practitioner. The hearing proceedings shall be
20conducted pursuant to Chapter 4 (commencing with Section 11370)
21of Part 1 of Division 3 of Title 2 of the Government Code.

22(c) The administrative director shall promptly notify the
23physician’s or practitioner’s state licensing, certifying, or
24registering authority of a suspension or revocation imposed
25pursuant to this section and shall update the department’s qualified
26medical evaluator and medical provider network databases, as
27appropriate.

28(d) A provider of services, whether an individual, clinic, group,
29corporation, or other association, may not submit a claim for
30payment to a payor for any services or supplies provided by a
31physician or practitioner whose participation in the workers’
32compensation has been suspended or revoked pursuant to this
33section. This subdivision does not apply with respect to services
34or supplies provided prior to the date of the suspension or
35 revocation.

end delete
36begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 139.2 of the end insertbegin insertLabor Codeend insertbegin insert is amended to
37read:end insert

38

139.2.  

(a) The administrative director shall appoint qualified
39medical evaluators in each of the respective specialties as required
P5    1for the evaluation of medical-legal issues. The appointments shall
2be for two-year terms.

3(b) The administrative director shall appoint or reappoint as a
4qualified medical evaluator a physician, as defined in Section
53209.3, who is licensed to practice in this state and who
6demonstrates that he or she meets the requirements in paragraphs
7(1), (2), (6), and (7), and, if the physician is a medical doctor,
8doctor of osteopathy, doctor of chiropractic, or a psychologist, that
9he or she also meets the applicable requirements in paragraph (3),
10(4), or (5).

11(1) Prior to his or her appointment as a qualified medical
12evaluator, passes an examination written and administered by the
13administrative director for the purpose of demonstrating
14competence in evaluating medical-legal issues in the workers’
15compensation system. Physicians shall not be required to pass an
16additional examination as a condition of reappointment. A
17physician seeking appointment as a qualified medical evaluator
18on or after January 1, 2001, shall also complete prior to
19appointment, a course on disability evaluation report writing
20approved by the administrative director. The administrative director
21shall specify the curriculum to be covered by disability evaluation
22report writing courses, which shall include, but is not limited to,
2312 or more hours of instruction.

24(2) Devotes at least one-third of total practice time to providing
25direct medical treatment, or has served as an agreed medical
26evaluator on eight or more occasions in the 12 months prior to
27 applying to be appointed as a qualified medical evaluator.

28(3) Is a medical doctor or doctor of osteopathy and meets one
29of the following requirements:

30(A) Is board certified in a specialty by a board recognized by
31the administrative director and either the Medical Board of
32California or the Osteopathic Medical Board of California.

33(B) Has successfully completed a residency training program
34accredited by the Accreditation Council for Graduate Medical
35Education or the osteopathic equivalent.

36(C) Was an active qualified medical evaluator on June 30, 2000.

37(D) Has qualifications that the administrative director and either
38the Medical Board of California or the Osteopathic Medical Board
39of California, as appropriate, both deem to be equivalent to board
40certification in a specialty.

P6    1(4) Is a doctor of chiropractic and has been certified in California
2workers’ compensation evaluation by a provider recognized by
3the administrative director. The certification program shall include
4instruction on disability evaluation report writing that meets the
5standards set forth in paragraph (1).

6(5) Is a psychologist and meets one of the following
7requirements:

8(A) Is board certified in clinical psychology by a board
9recognized by the administrative director.

10(B) Holds a doctoral degree in psychology, or a doctoral degree
11deemed equivalent for licensure by the Board of Psychology
12pursuant to Section 2914 of the Business and Professions Code,
13from a university or professional school recognized by the
14administrative director and has not less than five years’
15postdoctoral experience in the diagnosis and treatment of emotional
16and mental disorders.

17(C) Has not less than five years’ postdoctoral experience in the
18diagnosis and treatment of emotional and mental disorders, and
19has served as an agreed medical evaluator on eight or more
20occasions prior to January 1, 1990.

21(6) Does not have a conflict of interest as determined under the
22regulations adopted by the administrative director pursuant to
23subdivision (o).

24(7) Meets any additional medical or professional standards
25adopted pursuant to paragraph (6) of subdivision (j).

26(c) The administrative director shall adopt standards for
27appointment of physicians who are retired or who hold teaching
28positions who are exceptionally well qualified to serve as a
29qualified medical evaluator even though they do not otherwise
30qualify under paragraph (2) of subdivision (b). A physician whose
31full-time practice is limited to the forensic evaluation of disability
32shall not be appointed as a qualified medical evaluator under this
33subdivision.

34(d) The qualified medical evaluator, upon request, shall be
35reappointed if he or she meets the qualifications of subdivision (b)
36and meets all of the following criteria:

37(1) Is in compliance with all applicable regulations and
38evaluation guidelines adopted by the administrative director.

39(2) Has not had more than five of his or her evaluations that
40were considered by a workers’ compensation administrative law
P7    1judge at a contested hearing rejected by the workers’ compensation
2administrative law judge or the appeals board pursuant to this
3section during the most recent two-year period during which the
4physician served as a qualified medical evaluator. If the workers’
5compensation administrative law judge or the appeals board rejects
6the qualified medical evaluator’s report on the basis that it fails to
7meet the minimum standards for those reports established by the
8administrative director or the appeals board, the workers’
9compensation administrative law judge or the appeals board, as
10the case may be, shall make a specific finding to that effect, and
11shall give notice to the medical evaluator and to the administrative
12director. Any rejection shall not be counted as one of the five
13qualifying rejections until the specific finding has become final
14and time for appeal has expired.

15(3) Has completed within the previous 24 months at least 12
16hours of continuing education in impairment evaluation or workers’
17compensation-related medical dispute evaluation approved by the
18administrative director.

19(4) Has not been terminated, suspended, placed on probation,
20or otherwise disciplined by the administrative director during his
21or her most recent term as a qualified medical evaluator.

22If the evaluator does not meet any one of these criteria, the
23administrative director may in his or her discretion reappoint or
24deny reappointment according to regulations adopted by the
25administrative director. A physician who does not currently meet
26the requirements for initial appointment or who has been terminated
27under subdivision (e) because his or her license has been revoked
28or terminated by the licensing authority shall not be reappointed.

29(e) The administrative director may, in his or her discretion,
30suspend or terminate a qualified medical evaluator during his or
31her term of appointment without a hearing as provided under
32subdivision (k) or (l) whenever either of the following conditions
33occurs:

34(1) The evaluator’s license to practice in California has been
35suspended by the relevant licensing authority so as to preclude
36practice, or has been revoked or terminated by the licensing
37authority.

38(2) The evaluator has failed to timely pay the fee required by
39the administrative director pursuant to subdivision (n).

P8    1(f) The administrative director shall furnish a physician, upon
2request, with a written statement of its reasons for termination of,
3or for denying appointment or reappointment as, a qualified
4medical evaluator. Upon receipt of a specific response to the
5statement of reasons, the administrative director shall review his
6or her decision not to appoint or reappoint the physician or to
7terminate the physician and shall notify the physician of its final
8decision within 60 days after receipt of the physician’s response.

9(g) The administrative director shall establish agreements with
10qualified medical evaluators to ensure the expeditious evaluation
11of cases assigned to them for comprehensive medical evaluations.

12(h) (1) When requested by an employee or employer pursuant
13to Section 4062.1, the medical director appointed pursuant to
14Section 122 shall assign three-member panels of qualified medical
15evaluators within five working days after receiving a request for
16a panel. Preference in assigning panels shall be given to cases in
17which the employee is not represented. If a panel is not assigned
18within 20 working days, the employee shall have the right to obtain
19a medical evaluation from any qualified medical evaluator of his
20or her choice within a reasonable geographic area. The medical
21director shall use a random selection method for assigning panels
22of qualified medical evaluators. The medical director shall select
23evaluators who are specialists of the type requested by the
24employee. The medical director shall advise the employee that he
25or she should consult with his or her treating physician prior to
26deciding which type of specialist to request.

27(2) The administrative director shall promulgate a form that
28shall notify the employee of the physicians selected for his or her
29panel after a request has been made pursuant to Section 4062.1 or
304062.2. The form shall include, for each physician on the panel,
31the physician’s name, address, telephone number, specialty, number
32of years in practice, and a brief description of his or her education
33and training, and shall advise the employee that he or she is entitled
34to receive transportation expenses and temporary disability for
35each day necessary for the examination. The form shall also state
36in a clear and conspicuous location and type: “You have the right
37to consult with an information and assistance officer at no cost to
38you prior to selecting the doctor to prepare your evaluation, or you
39may consult with an attorney. If your claim eventually goes to
40court, the workers’ compensation administrative law judge will
P9    1consider the evaluation prepared by the doctor you select to decide
2your claim.”

3(3) When compiling the list of evaluators from which to select
4randomly, the medical director shall include all qualified medical
5evaluators who meet all of the following criteria:

6(A) He or she does not have a conflict of interest in the case, as
7defined by regulations adopted pursuant to subdivision (o).

8(B) He or she is certified by the administrative director to
9evaluate in an appropriate specialty and at locations within the
10general geographic area of the employee’s residence. An evaluator
11shall not conduct qualified medical evaluations at more than 10
12locations.

13(C) He or she has not been suspended or terminated as a
14qualified medical evaluator for failure to pay the fee required by
15the administrative director pursuant to subdivision (n) or for any
16other reason.

17(4) When the medical director determines that an employee has
18requested an evaluation by a type of specialist that is appropriate
19for the employee’s injury, but there are not enough qualified
20medical evaluators of that type within the general geographic area
21of the employee’s residence to establish a three-member panel,
22the medical director shall include sufficient qualified medical
23evaluators from other geographic areas and the employer shall pay
24all necessary travel costs incurred in the event the employee selects
25an evaluator from another geographic area.

26(i) The medical director appointed pursuant to Section 122 shall
27continuously review the quality of comprehensive medical
28evaluations and reports prepared by agreed and qualified medical
29evaluators and the timeliness with which evaluation reports are
30prepared and submitted. The review shall include, but not be
31limited to, a review of a random sample of reports submitted to
32the division, and a review of all reports alleged to be inaccurate
33or incomplete by a party to a case for which the evaluation was
34prepared. The medical director shall submit to the administrative
35director an annual report summarizing the results of the continuous
36review of medical evaluations and reports prepared by agreed and
37qualified medical evaluators and make recommendations for the
38improvement of the system of medical evaluations and
39determinations.

P10   1(j) After public hearing pursuant to Section 5307.3, the
2administrative director shall adopt regulations concerning the
3following issues:

4(1) (A) Standards governing the timeframes within which
5medical evaluations shall be prepared and submitted by agreed
6and qualified medical evaluators. Except as provided in this
7subdivision, the timeframe for initial medical evaluations to be
8prepared and submitted shall be no more than 30 days after the
9evaluator has seen the employee or otherwise commenced the
10medical evaluation procedure. The administrative director shall
11develop regulations governing the provision of extensions of the
1230-day period in both of the following cases:

13(i) When the evaluator has not received test results or consulting
14physician’s evaluations in time to meet the 30-day deadline.

15(ii) To extend the 30-day period by not more than 15 days when
16the failure to meet the 30-day deadline was for good cause.

17(B) For purposes of subparagraph (A), “good cause” means any
18of the following:

19(i) Medical emergencies of the evaluator or evaluator’s family.

20(ii) Death in the evaluator’s family.

21(iii) Natural disasters or other community catastrophes that
22interrupt the operation of the evaluator’s business.

23(C) The administrative director shall develop timeframes
24governing availability of qualified medical evaluators for
25unrepresented employees under Section 4062.1. These timeframes
26shall give the employee the right to the addition of a new evaluator
27to his or her panel, selected at random, for each evaluator not
28available to see the employee within a specified period of time,
29but shall also permit the employee to waive this right for a specified
30period of time thereafter.

31(2) Procedures to be followed by all physicians in evaluating
32the existence and extent of permanent impairment and limitations
33resulting from an injury in a manner consistent with Sections 4660
34and 4660.1.

35(3) Procedures governing the determination of any disputed
36medical treatment issues in a manner consistent with Section
375307.27.

38(4) Procedures to be used in determining the compensability of
39psychiatric injury. The procedures shall be in accordance with
40Section 3208.3 and shall require that the diagnosis of a mental
P11   1disorder be expressed using the terminology and criteria of the
2American Psychiatric Association’s Diagnostic and Statistical
3Manual of Mental Disorders, Third Edition-Revised, or the
4terminology and diagnostic criteria of other psychiatric diagnostic
5manuals generally approved and accepted nationally by
6practitioners in the field of psychiatric medicine.

7(5) Guidelines for the range of time normally required to perform
8the following:

9(A) A medical-legal evaluation that has not been defined and
10valued pursuant to Section 5307.6. The guidelines shall establish
11minimum times for patient contact in the conduct of the
12evaluations, and shall be consistent with regulations adopted
13pursuant to Section 5307.6.

14(B) Any treatment procedures that have not been defined and
15valued pursuant to Section 5307.1.

16(C) Any other evaluation procedure requested by the Insurance
17Commissioner, or deemed appropriate by the administrative
18director.

19(6) Any additional medical or professional standards that a
20medical evaluator shall meet as a condition of appointment,
21reappointment, or maintenance in the status of a medical evaluator.

22(k) Except as provided in this subdivision, the administrative
23director may, in his or her discretion, suspend or terminate the
24privilege of a physician to serve as a qualified medical evaluator
25if the administrative director, after hearing pursuant to subdivision
26(l), determines, based on substantial evidence, that a qualified
27medical evaluator:

28(1) Has violated any material statutory or administrative duty.

29(2) Has failed to follow the medical procedures or qualifications
30established pursuant to paragraph (2), (3), (4), or (5) of subdivision
31(j).

32(3) Has failed to comply with the timeframe standards
33established pursuant to subdivision (j).

34(4) Has failed to meet the requirements of subdivision (b) or
35(c).

36(5) Has prepared medical-legal evaluations that fail to meet the
37minimum standards for those reports established by the
38administrative director or the appeals board.

P12   1(6) Has made material misrepresentations or false statements
2in an application for appointment or reappointment as a qualified
3medical evaluator.

4A hearing shall not be required prior to the suspension or
5termination of a physician’s privilege to serve as a qualified
6medical evaluator when the physician has done either of the
7following:

8(A) Failed to timely pay the fee required pursuant to subdivision
9(n).

10(B) Had his or her license to practice in California suspended
11by the relevant licensing authority so as to preclude practice, or
12had the license revoked or terminated by the licensing authority.

13(l) The administrative director shall cite the qualified medical
14evaluator for a violation listed in subdivision (k) and shall set a
15hearing on the alleged violation within 30 days of service of the
16citation on the qualified medical evaluator. In addition to the
17authority to terminate or suspend the qualified medical evaluator
18upon finding a violation listed in subdivision (k), the administrative
19 director may, in his or her discretion, place a qualified medical
20evaluator on probation subject to appropriate conditions, including
21ordering continuing education or training. The administrative
22director shall report to the appropriate licensing board the name
23of any qualified medical evaluator who is disciplined pursuant to
24this subdivision.

25(m) The administrative director shall terminate from the list of
26medical evaluators any physicianbegin delete whereend deletebegin insert whoseend insert licensure has been
27terminated by the relevant licensing board, or who has been
28convicted of a misdemeanor or felony related to the conduct of his
29or her medical practice, or of a crime of moral turpitude. The
30administrative director shall suspend or terminate as a medical
31evaluator any physician who has been suspended or placed on
32probation by the relevant licensing board.begin insert The administrative
33director shall terminate as a medical evaluator any physician who
34is a person described in paragraph (3) of subdivision (b) of Section
35139.21.end insert
If a physician is suspended or terminated as a qualified
36medical evaluator under this subdivision, a report prepared by the
37physician that is not complete, signed, and furnished to one or
38more of the parties prior to the date of conviction or action of the
39licensing board, whichever is earlier, shall not be admissible in
40any proceeding before the appeals board nor shall there be any
P13   1liability for payment for the report and any expense incurred by
2the physician in connection with the report.

3(n) A qualified medical evaluator shall pay a fee, as determined
4by the administrative director, for appointment or reappointment.
5These fees shall be based on a sliding scale as established by the
6administrative director. All revenues from fees paid under this
7subdivision shall be deposited into the Workers’ Compensation
8Administration Revolving Fund and are available for expenditure
9upon appropriation by the Legislature, and shall not be used by
10any other department or agency or for any purpose other than
11administration of the programs of the Division of Workers’
12Compensation related to the provision of medical treatment to
13injured employees.

14(o) An evaluator shall not request or accept any compensation
15or other thing of value from any source that does or could create
16a conflict with his or her duties as an evaluator under this code.
17The administrative director, after consultation with the Commission
18on Health and Safety and Workers’ Compensation, shall adopt
19regulations to implement this subdivision.

20begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 139.21 is added to the end insertbegin insertLabor Codeend insertbegin insert, end insertimmediately
21following Section 139.2begin insert, to read:end insert

begin insert
22

begin insert139.21.end insert  

(a) (1) The administrative director shall promptly
23suspend any physician or practitioner from participating in the
24workers’ compensation system in any capacity when the individual
25or entity meets any of the following criteria:

26
(A) The individual has been convicted of a felony.

27
(B) The individual has been convicted of a misdemeanor
28involving fraud or abuse of the Medi-Cal program, Medicare
29program, or workers’ compensation system.

30
(C) The individual has been convicted of a misdemeanor
31involving fraud or abuse of any patient, or otherwise substantially
32related to the qualifications, functions, or duties of a provider of
33services.

34
(D) The individual or entity has been suspended, due to fraud
35or abuse, from the federal Medicare or Medicaid programs.

36
(E) The individual’s license, certificate, or approval to provide
37health care has been surrendered or revoked.

38
(2) The administrative director shall exercise due diligence to
39identify physicians and practitioners who have been suspended as
40described in subdivision (a) by accessing the quarterly updates to
P14   1the list of suspended and ineligible providers maintained by the
2State Department of Health Care Services for the Medi-Cal
3program at
4https://files.medi-cal.ca.gov/pubsdoco/SandILanding.asp.

5
(b) (1) The administrative director shall adopt regulations for
6suspending a physician’s or practitioner’s participation in the
7workers’ compensation system, subject to the notice and hearing
8requirements in paragraph (2).

9
(2) The administrative director shall furnish to the physician
10or practitioner written notice of the right to a hearing regarding
11the suspension and the procedure to follow to request a hearing.
12The notice shall state that the department is required to suspend
13the physician or practitioner pursuant to subdivision (a) after 30
14days from the date the notice is mailed unless the physician or
15practitioner requests a hearing and, in that hearing, the physician
16or practitioner provides proof that paragraph (1) of subdivision
17(a) is not applicable. The physician or practitioner may request a
18hearing within 10 days from the date the notice is sent by the
19administrative director. The request for the hearing shall stay the
20suspension. The hearing shall be held within 30 days of the receipt
21of the request. Upon the completion of the hearing, if the
22department finds that paragraph (1) of subdivision (a) is
23applicable, the administrative director shall immediately suspend
24the physician or practitioner.

25
(3) If a physician is a qualified medical examiner, and the
26department finds, in accordance with the notice and hearing
27requirements of this section, that paragraph (1) of subdivision (a)
28is applicable to that physician, the physician shall be terminated
29from the list of medical evaluators pursuant to subdivision (m) of
30Section 139.2.

31
(c) The administrative director shall promptly notify the
32physician’s or practitioner’s state licensing, certifying, or
33registering authority of a suspension imposed pursuant to this
34section and shall update the department’s qualified medical
35evaluator and medical provider network databases, as appropriate.

36
(d) A provider of services, whether an individual, clinic, group,
37corporation, or other association, may not submit a claim for
38payment to, or pursue a claim for payment from, a payor for any
39services or supplies provided by a physician or practitioner whose
40participation in the workers’ compensation system has been
P15   1suspended pursuant to this section, unless that claim for payment
2has been reduced to final judgment or the services or supplies are
3unrelated to a violation of the laws governing workers’
4compensation.

end insert
5

begin deleteSEC. 2.end delete
6
begin insertSEC. 3.end insert  

Section 14123 of the Welfare and Institutions Code is
7amended to read:

8

14123.  

Participation in the Medi-Cal program by a provider
9of service is subject to suspension in order to protect the health of
10the recipients and the funds appropriated to carry out this chapter.

11(a) (1) The director may suspend a provider of service from
12further participation under the Medi-Cal program for violation of
13any provision of this chapter or Chapter 8 (commencing with
14Section 14200) or any rule or regulation promulgated by the
15director pursuant to those chapters. The suspension may be for an
16indefinite or specified period of time and with or without
17conditions, or may be imposed with the operation of the suspension
18stayed or probation granted. The director shall suspend a provider
19of service for conviction of any felony or any misdemeanor
20involving fraud, abuse of the Medi-Cal program or any patient, or
21otherwise substantially related to the qualifications, functions, or
22duties of a provider of service.

23(2) If the provider of service is a clinic, group, corporation, or
24other association, conviction of any officer, director, or shareholder
25with a 10 percent or greater interest in that organization, of a crime
26described in paragraph (1) shall result in the suspension of that
27organization and the individual convicted if the director believes
28that suspension would be in the best interest of the Medi-Cal
29program. If the provider of services is a political subdivision of
30the state or other government agency, the conviction of the person
31in charge of the facility of a crime described in paragraph (1) may
32result in the suspension of that facility. The record of conviction
33or a certified copy thereof, certified by the clerk of the court or by
34the judge in whose court the conviction is had, shall be conclusive
35evidence of the fact that the conviction occurred. A plea or verdict
36of guilty, or a conviction following a plea of nolo contendere is
37deemed to be a conviction within the meaning of this section.

38(3) After conviction, but before the time for appeal has elapsed
39or the judgment of conviction has been affirmed on appeal, the
40director, if he or she believes that suspension would be in the best
P16   1interests of the Medi-Cal program, may order the suspension of a
2provider of service. When the time for appeal has elapsed, or the
3judgment of conviction has been affirmed on appeal or when an
4order granting probation is made suspending the imposition of
5sentence irrespective of any subsequent order under Section 1203.4
6of the Penal Code allowing a person to withdraw his or her plea
7of guilty and to enter a plea of not guilty, or setting aside the verdict
8of guilty, or dismissing the accusation, information, or indictment,
9the director shall order the suspension of a provider of service.
10The suspension shall not take effect earlier than the date of the
11director’s order. Suspension following a conviction is not subject
12to the proceedings required in subdivision (c). However, the
13director may grant an informal hearing at the request of the provider
14of service to determine in the director’s sole discretion if the
15circumstances surrounding the conviction justify rescinding or
16otherwise modifying the suspension provided for in this
17subdivision.

18(4) If the provider of service appeals the conviction and the
19conviction is reversed, the provider may apply for reinstatement
20to the Medi-Cal program after the conviction is reversed.
21Notwithstanding Sectionbegin delete 14126.6,end deletebegin insert 14124.6,end insert the application for
22reinstatement shall not be subject to the one-year waiting period
23for the filing of a reinstatement petition pursuant to Section 11522
24of the Government Code.

25(b) Whenever the director receives written notification from the
26Secretary of the United States Department of Health and Human
27Services that a physician or other individual practitioner has been
28suspended from participation in the Medicare or medicaid
29programs, the director shall promptly suspend the practitioner from
30participation in the Medi-Cal program and notify the
31Administrative Director of the Division of Workers’ Compensation
32of the suspension, in accordance with paragraph (2) of subdivision
33(e). This automatic suspension is not subject to the proceedings
34required in subdivision (c). No payment from state or federal funds
35may be made for any item or service rendered by the practitioner
36during the period of suspension.

37(c) The proceedings for suspension shall be conducted pursuant
38to Section 100171 of the Health and Safety Code. The director
39may temporarily suspend any provider of service prior to any
40hearing when in his or her opinion that action is necessary to
P17   1protect the public welfare or the interests of the Medi-Cal program.
2The director shall notify the provider of service of the temporary
3suspension and the effective date thereof and at the same time
4serve the provider with an accusation. The accusation and all
5proceedings thereafter shall be in accordance with Section 100171
6of the Health and Safety Code. Upon receipt of a notice of defense
7by the provider, the director shall set the matter for hearing within
830 days after receipt of the notice. The temporary suspension shall
9remain in effect until such time as the hearing is completed and
10the director has made a final determination on the merits. The
11temporary suspension shall, however, be deemed vacated if the
12director fails to make a final determination on the merits within
1360 days after the original hearing has been completed. This
14subdivision does not apply where the suspension of a provider is
15based upon the conviction of any crime involving fraud, abuse of
16the Medi-Cal program, or suspension from the federal Medicare
17program. In those instances, suspension shall be automatic.

18(d) (1) The suspension by the director of any provider of service
19shall preclude the provider from submitting claims for payment,
20either personally or through claims submitted by any clinic, group,
21corporation, or other association to the Medi-Cal program for any
22services or supplies the provider has provided under the program,
23except for services or supplies provided prior to the suspension.
24No clinic, group, corporation, or other association which is a
25provider of service shall submit claims for payment to the Medi-Cal
26program for any services or supplies provided by a person within
27the organization who has been suspended or revoked by the
28director, except for services or supplies provided prior to the
29suspension.

30 (2) If the provisions of this chapter, Chapter 8 (commencing
31with Section 14200), or the regulations promulgated by the director
32are violated by a provider of service that is a clinic, group,
33corporation, or other association, the director may suspend the
34organization and any individual person within the organization
35who is responsible for the violation.

36(e) (1) Notice of the suspension shall be sent by the director to
37the provider’s state licensing, certifying, or registering authority,
38along with the evidence upon which the suspension was based.

39(2) At the same time notice is provided pursuant to paragraph
40(1), the director shall provide written notification of the suspension
P18   1to the Administrative Director of the Division of Workers’
2Compensation, for purposes of Sectionbegin delete 5307.15end deletebegin insert 139.21end insert of the
3Labor Code.

4(f) In addition to the bases for suspension contained in
5subdivisions (a) and (b), the director may suspend a provider of
6service from further participation under the Medi-Cal dental
7program for the provision of services that are below or less than
8the standard of acceptable quality, as established by the California
9Dental Association Guidelines for the Assessment of Clinical
10Quality and Professional Performance, Copyright 1995, Third
11Edition, as periodically amended. The suspension shall be subject
12to the requirements contained in subdivisions (a) to (e), inclusive.



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