BILL ANALYSIS �
SB 1529
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Date of Hearing: August 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 1529 (Alquist) - As Amended: August 7, 2012
Policy Committee: HealthVote:11-4
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill revises numerous provisions related to the screening,
enrollment, disenrollment, suspensions, and other sanctions of
fee-for service (FFS) providers and suppliers participating in
the Medi-Cal Program, to conform to federal requirements.
Significant provisions, and provisions with a potential fiscal
impact, include the following:
1) Lowering the threshold for imposing the sanction of a
Medi-Cal payment suspension from the current standard of
"reliable evidence of fraud or willful misrepresentation"
to "credible allegation of fraud."
2) Revises current provisions relating to the suspension of a
provider pending an investigation for fraud or for any
other authorized reason, to require the provider to be
temporarily placed under a payment suspension, with
specified exceptions.
3) Effective upon approval of a state plan amendment (SPA) as
required by the Patient Protection and Affordable Care Act
(ACA) and implementing regulations, requiring providers to
be classified as "limited," "moderate," or "high" risk
according to categories of provider types established by
federal regulations.
4) Requiring quarterly reports from the Department of Justice
or any other law enforcement agency that has accepted
referrals for investigation from DHCS listing each referral
and whether it continues to be under investigation and
whether it involves a creditable allegation of fraud.
Authorizes DHCS to request these reports if the agency
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fails to submit them and requires the agency to respond
within 30 days.
5) Effective upon approval of a state plan amendment as
required by the ACA and implementing regulations,
authorizes DHCS to begin collecting an annual Medi-Cal
application fee from providers applying for enrollment,
revalidation of enrollment, enrollment at a new location or
change in location. Exempts individual practitioners who
are enrolled in Medicare or certain other federally funded
health programs.
6) Authorizes the DHCS Director to implement and interpret the
provisions of this bill by means of provider bulletins or
similar instructions, without formal adoption of
regulations pursuant to the Administrative Procedures Act
(APA).
FISCAL EFFECT
1)Negligible additional costs to DHCS. In general, the
adjustments to the screening, enrollment, and investigation
process required by this bill are required to comply with
federal law.
2)Estimated annual fee revenues of $600,000 collected pursuant
to federal law, and specified by this bill, will offset some
General Fund costs related to provider screening and
enrollment of providers.
3)This bill requires the Department of Justice (DOJ), as well as
any other law enforcement agency that has accepted referrals
for investigation from DHCS, to provide DHCS quarterly reports
listing each referral and investigation status. Costs to DOJ
are expected to be minor and absorbable. There is a potential
for state-reimbursable mandate costs related to this
requirement, but as the reporting requirement is minimal, any
costs are expected to be minor.
COMMENTS
Rationale . This bill is sponsored by DHCS to conform state
Medi-Cal fraud law to the federal ACA and regulations
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promulgated pursuant to ACA. This bill intends to conform state
law to federal law in the areas of screening, enrollment,
payment suspensions, overpayment recovery, and provider
sanctions. By doing so, DHCS will maintain California's
eligibility for federal funds.
The author states that CMS believes the new screening
requirements will help reduce fraud by moving Medi- Cal from a
"pay and chase" model to one that will prevent fraudulent
providers from enrolling in the first place. DHCS states that
these new actions are not provided for in existing California
statutes or regulations. Therefore, this bill is necessary to
grant the legal authority to implement the provisions that
exceed or conflict with current authority.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081