BILL ANALYSIS �
AB 1629
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Date of Hearing: April 24, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 1629 (Halderman) - As Amended: March 29, 2012
SUBJECT : Medi-Cal: provisional provider status: medically
underserved areas.
SUMMARY : Establishes an expedited process for a physician who is
practicing in a medically underserved area to become eligible to
be a provider in the Medi-Cal program. Specifically, this bill :
1)Requires the Department of Health Care Services (DHCS) to
grant provisional provider status for a period of up to 18
months to any physician who meets the following criteria:
a) Is a physician in good standing as specified (currently
licensed without limitations and has no adverse actions
against their licensure status); and,
b) Practices in a medically underserved area, defined as
federally designated Health Professional Shortage Area
(HPSA), a Medically Underserved Area (MUA), or with a
Medically Underserved Population (MUP).
2)Requires DHCS to publicize the ability to request
consideration as a provider under the criteria in 1) above.
3)Specifies that a provider shall request consideration by
making a notation on the application, by cover letter, or by
other means identified by DHCS in a provider bulletin.
4)Requires DHCS to notify the applicant or provider as to
whether the applicant meets the criteria within 30 days and
provides that the provider shall be granted provisional status
on the 31st day and shall be effective until a final
determination of provider status is made.
5)Prohibits DHCS from requiring the provider to reimburse DHCS
for Medi-Cal funds received during the provisional status if
the application is ultimately denied or terminated, to the
extent permitted by federal law.
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EXISTING LAW :
1)Establishes the Medi-Cal program, administered by DHCS, which
provides comprehensive health care coverage for low-income
individuals and their families; pregnant women; elderly,
blind, or disabled persons; nursing home residents; and,
refugees who meet specified eligibility criteria.
2)Requires a provider to be enrolled in Medi-Cal in order to
receive fee-for-service (FFS) reimbursement for the provision
of services, goods, supplies, or merchandise to a Medi-Cal
beneficiary.
3)Requires a provider who wants to enroll in the Medi-Cal
program to submit a complete application package for
enrollment, continuing enrollment, enrollment at a new
location, or a change in location. Requires DHCS to provide
notice to an applicant within 30 days after receiving an
application package that the application package has been
received.
4)Provides an exemption from 3) above for a Medi-Cal physician
or dental provider in good standing in the Medi-Cal program
who changes locations within the same county by allowing the
provider to continue enrollment at the new location by filing
a change of location form.
5)Allows a physician in good standing who is on the faculty of a
specified hospital or is credentialed by a plan that is
licensed under the Knox-Keene Health Care Service Plan Act of
1975 to request to enroll in the Medi-Cal program as a
preferred provider and receive an expedited review of their
enrollment application within 60 days instead of 90 days.
Requires the applicant to be granted provisional preferred
provider status for no longer than 18 months if the applicant
meets the criteria.
6)Requires DHCS to develop a short form application that meets
all minimum federal requirements for a physician whose
practice is in a general acute care hospital, a rural general
acute care hospital, or an acute psychiatric hospital and is a
physician in good standing. Requires DHCS, within 90 days of
receiving this application, to grant provisional provider
status for a period of 12 months or notify an applicant that
he or she does not meet these criteria.
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7)Requires DHCS to provide notice, within 90 days, to a
physician or physician group that is not otherwise granted
provisional status under 5) or 6) above that the provisional
status has been granted for a period of 12 months, the
application is incomplete, that DHCS is exercising its
authority, as specified, to conduct background checks,
pre-enrollment inspections, or unannounced visits, or that the
application is denied for other specified reasons.
8)Requires DHCS to provide notice to any applicant, other than
physicians as covered above, after 180 days from receiving an
application package that the applicant does not meet the
criteria for preferred provider status, that the application
package is incomplete, that DHCS is exercising its authority
as specified to conduct background checks, pre-enrollment
inspections, or unannounced visits, or that the application is
denied for other specified reasons. Existing law requires
DHCS to grant provisional provider status for a period of no
longer than 12 months, effective from the 181st day of
receiving an application package or from the date on the
notice to the applicant.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the current
90-day waiting period between the time a physician submits an
application and the time they can begin to care for Medi-Cal
patients exacerbates the existing shortage of Medi-Cal
providers in primarily rural, underserved areas of California
and creates a disincentive for physicians to become Medi-Cal
providers. The author, citing data from the California Rural
Health Association, states that about 45% of rural
Californians live in federally designated HPSAs. In addition,
according to the author a greater portion of residents of
rural counties are covered by Medi-Cal (14.1% vs. 10.5%)
compared to residents of urban counties. The author also
points out, most of the counties with the highest Medi-Cal
enrollment per capita are located in the Central Valley and
many of these counties are designated as or contain areas
designated as HPSAs, MUAs, or areas with an MUP. As further
justification for this bill, the author states that rural
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California suffers from chronic healthcare workforce shortages
and cites for example, the fact that there are 935 residents
per doctor in rural California as compared to 460 residents
per doctor in urban areas. The author concludes that creating
an expedited Medi-Cal approval process will allow physicians
in underserved areas to begin to see patients faster. Two
months can make a significant difference in the care of an ill
patient. This bill, according to the author will mitigate
both a real and perceived barrier (excessive time and
paperwork) that has prevented physicians in underserved areas
from applying to be Medi-Cal providers in the past.
2)BACKGROUND . The provider enrollment division of DHCS is
responsible for the enrollment and re-enrollment of FFS
healthcare service providers into the Medi-Cal program. There
are approximately 150,000 enrolled Medi-Cal providers who
served the medically necessary needs of the Medi-Cal
population. The Audits and Investigations (A&I) Division has
the lead responsibility for the DHCS Medi-Cal Anti-Fraud
program. A&I is responsible for ensuring the fiscal
integrity, efficiency, and quality of the Medi-Cal program. To
this end, A&I conducts investigations of suspected violators
of Medi-Cal laws and regulations, aggressively recovers public
funds spent inefficiently or illegally, and performs audits of
Medi-Cal and public health providers. The current FFS
provider enrollment process was enacted in response to
hearings in 2003, by the Senate Select Committee on Government
Oversight on Medi-Cal Fraud and Over Utilization. The Senate
Select Committee received testimony that the vast majority of
monetary losses from health care fraud are due to provider
fraud, rather than beneficiary fraud. The 2003 May Revision
to the Governor's Budget included a major DHCS (previously the
Department of Health Services) proposal that addressed these
issues such as new staff and a number of statutory changes.
SB 857 (Speier), Chapter 601, Statutes of 2003, included the
statutory changes such as provisional provider status intended
to more easily remove problem providers from the Medi-Cal
program; timelines for DHCS to respond to applications; and,
for providers to answer any questions raised by DHCS.
Prior to 1999, DHCS issued Medi-Cal provider numbers to
essentially any provider requesting one. In July 1999, DHCS
unveiled a task force to develop emergency regulations
requiring all applicants to complete a more in-depth
application package, in an effort to reduce fraud among
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enrolling providers. This new package required additional
information tailored to provider type, included a provider
agreement that allows DHCS to conduct background checks and
onsite visits, and included a 10-page provider financial
disclosure statement. These regulations also required
existing providers to re-enroll, or submit new applications to
ensure that they are suitable to continue participating in the
Medi-Cal program. These reform efforts led to a substantial
increase in workload and at first created a backlog. When an
application is pending past the due date, the provider is
automatically enrolled and given provisional status. The
Bureau of State Audits conducted audits of Medi-Cal provider
enrollment in May 2002 and April 2007. The 2007 audit found
that, despite DHCS's effort to shorten the average time to
process applications, DHCS does not process some applications
within the specified time frame under current law. As a
result, the enrollment branch continues to review the
applications after this deadline, and is forced to enroll
these applicants into Medi-Cal automatically on a provisional
status, because it cannot make a timely determination on the
application.
However, the audit did find that the preferred provider status
was of marginal benefit. According the audit only 4% of the
applications in 2006 requested this status and given that the
branch's average time to process an application in September
2006 was just 30 days, the 90-day processing period appeared
to be irrelevant. According to DHCS the current processing
time for physicians that fall under the 90 day time limit is
60 to 70 days and for all other providers it is 86 days.
3)MUA . This bill applies to physicians who practice in a
medically underserved area, defined as a HPSA, a MUA, or with
a MUP, as defined by the United States Department of Health
and Human Services (HHS). The Health Resources and Services
Administration (HRSA), within HHS, develops shortage
designation criteria and uses them to decide whether or not a
geographic area, population group, or facility is an HPSA or
an MUA/P. According to HRSA, MUAs may be a whole county or a
group of contiguous counties, a group of county or civil
divisions, or a group of urban census tracts in which
residents have a shortage of personal health services. MUPs
may include groups of persons who face economic, cultural, or
linguistic barriers to healthcare. As of April 4, 2012, there
were 4150 MUA/P designated areas nationally, with 209 of them
located in California. HPSAs may be designated as having a
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shortage of primary medical care, dental, or mental health
providers. They may be urban or rural areas, population
groups or medical or other public facilities. As of April 10,
2012, nationally, there are 5,856 Primary Care HPSAs with 59.8
million people living in them.
4)SUPPORT . The California Association for Health Services at
Home (CAHSAH) writes in support that the Medi-Cal
administrative process is often slow-moving and cumbersome.
According to CAHSAH, providers of health services may wait
months until they are eligible to participate fully in the
Medi-Cal program while patients wait for the health are
services they need. According to CAHSAH, enactment of this
bill will shorten significantly the Medi-Cal provisional
provider approval process and allow patients who need health
care services to receive then in a more expeditious and
efficient manner.
5)RELATED LEGISLATION . SB 1529 (Alquist) is sponsored by DHCS
to align California's state law with the Code of Federal
Regulations, as it relates to screening, enrollment, payment
suspensions, and sanctions of state Medicaid (Medi-Cal in
California) providers. SB 1529, among other provisions,
includes amendments to the same section as this bill including
changes to conform with the Federal National Provider
requirements as DHCS no longer issues provider numbers.
6)PREVIOUS LEGISLATION .
a) AB 1783 (Hayashi), Chapter 192 , Statutes of 2010
permits a Medi-Cal dental provider to change locations
within the same county by filing a change of location form
in lieu of submitting a complete application package.
b) AB 1226 (Hayashi), Chapter 693, Statutes of 2007, makes
specified physicians eligible for expedited enrollment as
Medi-Cal physicians. Permits a Medi-Cal physician provider
in an individual physician practice to change locations
within the same county by filing a change of location form.
Extends the time for a Medi-Cal provider or provider
applicant to resubmit an incomplete application package.
c) SB 1353 (Romero) of 2006 would have required specified
physicians to be eligible for expedited enrollment in the
Medi-Cal program. Would have permitted a Medi-Cal
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physician provider to change locations within the same
county by filing a change of location form. SB 1353 was
vetoed by the Governor. In his veto message, he expressed
concerned that it may unintentionally result in fraudulent
claims. He also stated that the shared interest in getting
Medi-Cal providers enrolled faster in order to provide
greater access to care has been largely addressed
administratively by improvements in the provider enrollment
process and allowing providers moving to a new location to
continue to bill Medi-Cal while their application is being
processed. Finally, he stated that DHCS will continue to
improve the provider enrollment system, while balancing the
need to retain key tools to fight fraud and abuse.
d) SB 770 (Romero) of 2005 would have required specified
physicians to be eligible for expedited enrollment in the
Medi-Cal program. Would have permitted a Medi-Cal
physician provider to change locations within the same
county by filing a change of location form. SB 770 died on
the Assembly Appropriations suspense file.
e) 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, and created rules for obtaining
provisional provider status.
7)POLICY QUESTIONS .
a) Overbroad and under inclusive definition . The author's
stated purpose is to provide relief to rural areas with
shortages of Medi-Cal providers. However this bill applies
to any physician who practices in a MUA. According to one
of these designations, as of September 1, 2011, it would
include not only rural areas, but institutions and many
urban areas as well. For instance, it applies to clinics
in Long Beach, Hollywood, Venice, and Santa Monica in the
Los Angeles area. It applies to Folsom State Prison, the
Metropolitan Correctional Center in San Diego, and
California State Prison-Solano. Using the HRSA
designations for MUA/P, this bill covers physicians in
parts of Alameda County but none in Placer, Calaveras, or
Colusa Counties. Is this the author's intent ? Is this the
appropriate definition ?
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b) Rule swallows the exception . In some urban areas, the
expedited process proposed by this bill may actually apply
to most of the Medi-Cal providers in the area. Using the
HRSA designation of shortage areas (MUA/P) then 1,781
census tracts and populations qualify. These include
approximately 60 census tracts in Alameda County. In Los
Angeles it includes census tracts in Inglewood, Watts, Van
Nuys, Gardena, Westlake, Boyle Heights, North Hollywood,
Culver City and low income populations in Rancho Palos
Verdes. Because the definition used in this bill includes
so many low-income and underserved urban areas, the
expedited process may actually apply to most of the
potential Medi-Cal physicians in these urban areas, rather
than being a small exception for certain rural areas . Is
this the author's intent to be this inclusive ?
c) Limited to physicians . Evidence of lack of access and
shortages of providers other than physicians in Medi-Cal
and in rural areas is abundant. HRSA also designates HPSA
shortage areas in California for dentists and mental health
care. This committee has heard of clinics in rural areas
that have been unable to fill positions for mental health
providers. Legislators regularly receive complaints from
small business owners such as medical transportation
providers who wish to expand to serve more Medi-Cal
patients by opening in a new location, have invested
capital to do so but have to wait at least 180 days to be
approved. Frequently, the provider has made a minor error
in the paperwork, the application is denied after waiting
the 180 days, and must be resubmitted thus starting the
clock all over. Physicians already have two paths for
expedited provider enrollment and may use a shortened form
not available to other providers that allow for expedited
enrollment in 60 to 90 days. Physicians and dentists also
have an expedited process for when they change locations.
Is it equitable to allow physicians to qualify in 30 days
without aiding some of the other providers who are even
more burdened by the current system and where there are
also shortages ?
REGISTERED SUPPORT / OPPOSITION :
Support
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California Association for Health Services at Home
Opposition
None on file
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097