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