BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1315
AUTHOR: Monning
AMENDED: April 3, 2014
HEARING DATE: April 24, 2014
CONSULTANT: Bain
SUBJECT : Medi-Cal: providers.
SUMMARY : Requires a notice of temporary suspension issued to a
health care provider by the Department of Health Care Services
Medi-Cal Provider Enrollment Division to include a list of
discrepancies required to be remediated and the timeframe in
which a provider can demonstrate that the discrepancies
identified have been remediated. Requires the provider to be
removed from enrollment as a Medi-Cal provider if a provider
fails to remediate the discrepancies identified.
Existing law:
1.Requires an applicant, a health care provider who is licensed
or certificated under state law or who is a professional
corporation, to be enrolled in the Medi-Cal program as either
an individual provider or as a rendering provider in a
provider group for each application package submitted and
approved.
2.Requires an applicant that currently is not enrolled in the
Medi-Cal program, or a provider applying for continued
enrollment (upon written notification from the Department of
Health Care Services (DHCS), and a provider not currently
enrolled at a location where the provider intends to provide
services to Medi-Cal beneficiaries, to submit a complete
application package to DHCS for enrollment, continuing
enrollment, or enrollment at a new location or a change in
location.
3.Makes a provider subject to temporary suspension from the
Medi-Cal program, which includes temporary deactivation of the
provider's number, including all business addresses used by
the provider to obtain reimbursement from the Medi-Cal program
if the provider has failed to remediate significant
discrepancies in information provided to DHCS by the provider
or significant discrepancies that are discovered as a result
of an announced or unannounced visit, for purposes of
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enrollment, continued enrollment, or certification.
4.Requires the DHCS director to notify the provider in writing
of the temporary suspension and deactivation of provider
numbers, which is required to take effect 15 days from the
date of the notification.
This bill:
1.Requires a notice of temporary suspension to a Medi-Cal
provider to include the following:
a. A list of discrepancies required to be
remediated; and,
b. The timeframe in which a provider may
demonstrate to DHCS that the discrepancies identified
have been remediated.
2.Requires DHCS to lift the temporary suspension and to notify
the provider that he or she is eligible to receive Medi-Cal
reimbursement for services provided after the date the
temporary suspension was lifted if a provider demonstrates to
DHCS that:
a. The discrepancies identified have been
remediated; and,
b. The provider meets the standards of
participation within the timeframe specified.
3.Requires a provider who has received a notice of temporary
suspension to be removed from enrollment as a Medi-Cal
provider by operation of law, if a provider fails to remediate
the discrepancies identified within the timeframe specified.
FISCAL EFFECT : This bill has not been heard by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, for the few
Medi-Cal fee-for-service providers who fail to remediate
deficiencies and are subject to existing temporary suspension
and deactivation requirements, there is a gap of enforcement
that must be cleaned up. Current law fails to require any
final action pertaining to providers temporarily suspended and
temporarily deactivated as part of administrative enforcement
actions. Requiring the additional action to deactivate under
this bill closes this gap, and has the potential to reduce the
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prevalence of fraud and increase program integrity in the
Medi-Cal program and compliance with the Affordable Care Act
(ACA).
2.Background on Medi-Cal Provider Enrollment Process. State law
governing Medi-Cal and federal Medicaid law and regulations
contain provisions to prevent and address fraud in the
Medicaid program. For example, existing state law requires a
health care provider seeking to provide services in the
fee-for-service Medi-Cal program to submit a complete
application package for enrollment, continued enrollment,
enrollment at a new location or a change in location. DHCS'
Provider Enrollment Division indicates it receives 1,400
applications from providers each month.
Existing law authorizes DHCS to temporarily suspend and
temporarily deactivate a provider when DHCS discovers that the
provider cannot demonstrate program compliance. DHCS informs a
provider of discrepancies that must be remediated when issuing
a letter to the provider informing them of the temporary
suspension. Examples of issues that warrant a temporary
suspension include:
a. Failing to report a change of address;
b. Failing to be open and available to the
general public;
c. Failing to have regularly established and
posted business hours;
d. Failing to report a change in ownership;
e. Failing to have the necessary equipment and
facilities to carry out day-to-day business; and,
f. Failing to have the appropriate business or
professional license.
However, DHCS does have the authority to take a final action
against a provider if the provider fails to remediate the
deficiencies that triggered the temporary suspension or
deactivation. In addition, current law also does not specify a
time period for a provider to become compliant, nor does it
specify the timeframe a temporary suspension can remain in
place.
A provider subject to a temporary suspension cannot receive
reimbursement from the Medi-Cal program. A provider who is
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subject to a temporary suspension can appeal DHCS' decision,
and a provider who is removed from Medi-Cal as a result of a
temporary suspension can also reapply.
1.Prior legislation. SB 1529 (Alquist), Chapter 797, Statutes of
2012, revises screening, enrollment, disenrollment,
suspensions, and other sanctions for fee-for service Medi-Cal
providers and suppliers to conform to the federal ACA.
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.
2.Support. DHCS writes in support that existing law does not
grant it the authority to take a final action against a
provider if the provider fails to remediate the deficiencies
that triggered the temporary suspension or deactivation. In
addition, DHCS argues current law does not specify a time
period for a provider to become compliant or a timeframe a
temporary suspension can remain in place. This bill would
provide DHCS with a corrective action plan to fully address
program compliance issues found in an application or
discovered during an on-site inspection. DHCS concludes that
authorizing the additional action to deactivate noncompliant
providers could also reduce the prevalence of fraud and
increase program integrity.
3.Amendments. This bill refers in two places to a timeframe to
remediate discrepancies but it does not establish a timeframe
in this bill. DHCS indicates the current temporary suspension
notice issued by DHCS does not specify a timeframe for
remediation. An amendment is needed to clarify this provision.
SUPPORT AND OPPOSITION :
Support: Department of Health Care Services
Oppose: None received
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