BILL ANALYSIS Ó
SB 299
Page 1
Date of Hearing: June 30, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
SB
299 (Monning) - As Amended May 18, 2015
SENATE VOTE: 37-0
SUBJECT: Medi-Cal: provider enrollment.
SUMMARY: Makes minor changes in the processes used by the
Department of Health Care Services (DHCS) to enroll health care
providers in the Medi-Cal program. Specifically, this bill:
1)Exempts, from the current DHCS notarization requirements, any
provider that chooses to enroll electronically.
2)Conforms state law to federal regulation by requiring DHCS to
designate a provider or applicant as a "high" categorical risk
if DHCS (in addition to the federal Centers for Medicare and
Medicaid Services (CMS)) lifted a temporary moratorium within
the previous six months for the particular provider type
submitting the application.
3)Deletes various obsolete provisions of law.
EXISTING LAW:
SB 299
Page 2
1.Establishes the Medi-Cal program, which is administered by
DHCS, under which qualified low-income individuals receive
health care services.
2.Requires an applicant or provider to submit a complete
application package for enrollment as a Medi-Cal provider, and
generally requires the application package for enrollment, the
provider agreement, and all attachments or changes that are
submitted by specified applicants or providers to be
notarized.
3.Designates Medi-Cal provider types as "limited," "moderate,"
or "high" categorical risk by the federal government, and
requires DHCS, at minimum, to utilize the federal regulations
in determining a provider's or applicant's categorical risk.
4.Requires DHCS to conduct specified measures for high
categorical risk providers or applicants, including conducting
a criminal background check and taking fingerprints.
5.Requires DHCS, in accordance with federal regulation, to
designate a provider or applicant as a high categorical risk
if specified conditions are met, including if the federal
Centers for Medicare and Medicaid Services (CMS) lifted a
temporary moratorium within the previous six months for the
particular provider type submitting the application, the
applicant would have been prevented from enrolling based on
that previous moratorium, and the applicant applies for
enrollment as a provider at any time within six months from
the date the moratorium was lifted.
FISCAL EFFECT: According to the Senate Appropriations Committee
this bill has a negligible fiscal impact.
COMMENTS:
SB 299
Page 3
1)PURPOSE OF THIS BILL. SB 299 removes the obsolete statutory
notarization requirement for Medi-Cal provider applicants when
applying online in an effort to simplify and improve the
Medi-Cal enrollment process. Notarization is required under
state law for specified applicants and providers seeking
enrollment as a Medi-Cal provider in an effort to verify the
identity of the provider. This requirement will become
obsolete for providers doing their enrollment on-line when
DHCS rolls out its new on-line enrollment system, called
Provider Application and Validation for Enrollment (PAVE).
Because the Department of Health Care Services (DHCS) is
developing an online enrollment system that is on track for a
September 2015 rollout and state law must conform to federal
regulations as soon as possible, the urgency clause included
in this bill is necessary
In addition, this bill ensures that California is compliant
with federal regulations on its Medicaid program. Not
conforming could risk the state losing federal Medicaid
funding if the state is found in noncompliance. Federal
regulations (Section 455.450 of Title 42 of the Code of
Federal Regulations) specify that the state Medicaid agencies
must adjust the categorical risk level to "high" when the
state Medicaid agency of CMS in the previous six month lifted
a temporary moratorium.
There is also obsolete conditional language added by SB 1529
(Alquist), Chapter 797, Statutes of 2012, in state law that
should be removed because the obligations are completed.
2)BACKGROUND.
a) Medi-Cal provider enrollment and electronic
SB 299
Page 4
applications. State law governing Medi-Cal and federal
Medicaid law and regulations contain provisions to prevent
and address fraud and abuse in the Medicaid program. DHCS'
Provider Enrollment Division (PED) is responsible for the
enrollment and re-enrollment of 40 fee-for-service health
care provider types into the Medi-Cal program. Later this
year, DHCS' PED is proposing to implement the PAVE system.
PAVE is intended to transform DHCS' provider enrollment
activities from a manual process to a web-based portal that
providers can use to complete and submit their
applications, verifications and report changes. The
urgency clause in this bill would permit provider
applications to be submitted electronically without the
current notarization requirement in anticipation of PAVE
implementation.
b) Categorical risk of fraud and provider moratorium.
Federal regulations require state Medicaid agencies to
screen all initial applications, including applications for
a new practice location, and any applications received in
response to a re-enrollment or revalidation of enrollment
request based on a categorical risk level of "limited,"
"moderate," or "high." Federal regulations require, when a
state Medicaid agency designates a provider as a "high"
categorical risk, the agency to conduct a criminal
background check and require the submission of
fingerprints. Under federal regulations, state Medicaid
agencies must adjust the categorical risk level from
"limited" or "moderate" to "high" when the State Medicaid
agency or CMS in the previous six months lifted a temporary
moratorium.
This bill would conform state law to this federal regulation
if DHCS were to lift a temporary moratorium. DHCS has
three enrollment moratoriums currently in effect: i)
clinical laboratories (statewide); ii) durable medical
SB 299
Page 5
equipment providers located in Los Angeles, Orange,
Riverside, and San Bernardino Counties, and out-of-state;
and, iii) non-chain, non-pharmacist owned pharmacies in Los
Angeles County.
3)SUPPORT. The California Chapter of the American College of
Emergency Physicians (Cal-ACEP) writes in support that
emergency physicians have reported problems with enrolling in
Medi-Cal program, and delays can be more than one year before
the emergency physician is approved. Cal-ACEP states any
effort to lessen the administrative burden on Medi-Cal
providers is a welcome relief, and by exempting providers who
choose to enroll electronically from the notarization
requirements, this bill would do just that. The California
Pharmacy Association supports DHCS's efforts to find
innovative solutions to alleviate the MediCal provider
enrollment process for pharmacists and other healthcare
professionals. In addition, they argue DHCS should have
authority over the states MediCal provider screening process
rather than CMS. DHCS supports the changes made by this bill
beca4)use they are necessary to assure continued efficient
administration of the Medi-Cal program in compliance with
federal regulations.
5)RELATED LEGISLATION. AB 1388 (Obernolte), is a reintroduction
of SB 1212 (Walters), of 2014, that would exempt a clinical
laboratory from the Medi-Cal provider moratorium if the lab
had an existing relationship with the Medi-Cal program as a
provider of benefits through a contract with a Medi-Cal
managed care plan. AB 1388 is in this Committee.
6)PREVIOUS LEGISLATION.
a) SB 1212 would have exempted a clinical laboratory from
SB 299
Page 6
the Medi-Cal provider moratorium if the lab had an existing
relationship with the Medi-Cal program as a provider of
benefits through a contract with a Medi-Cal managed care
plan. SB 1212 was held in the Senate Health Committee.
b) SB 1529 revises screening, enrollment, disenrollment,
suspensions, and other sanctions for fee-for-service
Medi-Cal providers and suppliers to conform to the federal
Patient Protection and Affordable Care Act.
REGISTERED SUPPORT / OPPOSITION:
Support
California Association of Physician Groups
California Chapter of the American College of Emergency
Physicians
California Department of Health Care Services
California Pharmacists Association
Opposition
None on file.
SB 299
Page 7
Analysis Prepared by:Roger Dunstan / HEALTH / (916)
319-2097