BILL NUMBER: SB 750	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Strickland

                        FEBRUARY 27, 2009

   An act to amend Section 14304 of the Welfare and Institutions
Code, relating to Medi-Cal.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 750, as introduced, Strickland. Medi-Cal: prepaid health plans.

   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, and
under which qualified low income individuals receive health care
benefits. Existing law authorizes the department to contract with one
or more prepaid health plans, in accordance with specified
procedures, to provide benefits to eligible persons who are enrolled
in these health plans.
   Pursuant to these provisions, existing law requires the director,
if he or she makes a finding of noncompliance or for other good
cause, as described, to terminate a contract with a prepaid health
plan or a Medi-Cal managed health care plan in accordance with
specified procedures, or, in lieu of termination, to take one or more
specified sanctions against the contractor.
   This bill would make a technical, nonsubstantive change to this
provision.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 14304 of the Welfare and Institutions Code is
amended to read:
   14304.  (a) The director shall terminate a contract with a prepaid
health plan or a Medi-Cal managed health care plan if he or she
finds that the standards prescribed in this chapter, the regulations,
or the contract are not being complied with, that claims accrued or
to accrue have not or will not be recompensed, or for other good
cause shown. Good cause includes, but is not necessarily limited to,
three repeated and uncorrected findings of serious deficiencies that
have the potential to endanger patient care, as defined by the
department in accordance with this section, identified in the medical
audits conducted by the department. Except in the event that the
director determines there is an immediate threat to the health of
Medi-Cal beneficiaries enrolled in the plan, at the request of the
plan, the department shall hold a public hearing to commence 30 days
after notice of intent to terminate the contract has been received by
the plan. The department shall present evidence at the hearing
showing good cause for the termination. The department shall assign
an administrative law judge who shall provide a written
recommendation to the department on the termination of the contract
within 30 days after conclusion of the hearing. Reasonable notice of
the hearing shall be given to the plan, to Medi-Cal beneficiaries
enrolled in the plan, and  to  others who may be directly
interested, including any other persons and organizations as the
director may deem necessary. The notice shall state the effective
date of, and the reason for, the termination.
   (b) In lieu of contract termination specified in subdivision (a),
the director shall have the power and authority to take one or more
of the following sanctions against a contractor for noncompliance
with the findings by the director as specified in subdivision (a):
   (1) Suspend enrollment and marketing activities.
   (2) Require the contractor to suspend or terminate contractor
personnel or subcontractors.
   (3) Impose civil penalties not to exceed ten thousand dollars
($10,000) per violation pursuant to regulations adopted by the
director. Unless imposed in error, penalties shall not be returned to
the plan.
   (4) Make one or more of the temporary suspension orders set out in
subdivision (d).
   (5) Take other appropriate action as determined necessary by the
department.
   The director shall give reasonable notice of his or her intention
to apply any of the sanctions authorized by this subdivision to the
plan and others who may be directly interested, including any other
persons and organizations as the director may deem necessary. The
notice shall include the effective date, the duration of, and the
reason for each sanction proposed by the director.
   (c) Notwithstanding subdivision (b), the director shall terminate
a contract with a prepaid health plan which the United States
Secretary of Health and Human Services has determined does not meet
the requirements for participation in the medicaid program contained
in Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title
42 of the United States Code.
   (d) The department may make one or more of the following temporary
suspension orders as an immediate sanction: temporarily suspend
enrollment activities, temporarily suspend marketing activities,
require the contractor temporarily to suspend specified personnel of
the contractor, or require the contractor temporarily to suspend
participation by a specified subcontractor. The temporary suspension
orders must be effective no earlier than 20 days after the notice
specified in subdivision (b).
   If the department issues a temporary suspension order as an
immediate sanction, it shall notify the contractor of the nature and
effective date of the temporary suspension and at the same time shall
serve the provider with an accusation. Upon receipt of a notice of
defense filed by the contractor, the department shall within 15 days
set the matter for hearing, which shall be held as soon as possible,
but not later than 30 days after receipt of the notice of hearing by
the contractor. The hearing may be continued at the request of the
contractor if a continuance is necessary to permit presentation of an
adequate defense. The temporary suspension order shall remain in
effect until the hearing is completed and the department has made a
final determination on the merits. However, the temporary suspension
order shall be deemed vacated if the director fails to make a final
determination on the merits within 60 days after the original hearing
has been completed.
   (e) A contractor may request a hearing in connection with any
sanctions applied pursuant to subdivision (b), other than those
contained in a temporary suspension order, within 15 working days
after the notice of the effective date of the sanctions has been
given, by sending a letter so stating to the address specified in the
notice. The department shall stay implementation of the sanction
upon receipt of the request for a hearing. Implementation of the
sanction shall remain stayed until the effective date of the final
decision of the department.
   (f) Except as otherwise provided in this section, all hearings to
review the imposition of sanctions, including temporary suspension
orders, shall be held pursuant to the procedures set forth in Section
100171 of the Health and Safety Code.
   (g) The director may collect civil penalties by withholding the
amount from capitation owed to the plan.