BILL ANALYSIS �
SB 1315
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Date of Hearing: June 24, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 1315 (Monning) - As Amended: June 10, 2014
SENATE VOTE : 35-0
SUBJECT : Medi-Cal: providers.
SUMMARY : Requires a notice of temporary suspension issued to a
health care provider by the Department of Health Care Services
(DHCS) to include a list of discrepancies required to be
remediated and the timeframe by which a provider can demonstrate
that the identified discrepancies have been remediated.
Specifically, this bill :
1)Requires a notice of temporary suspension to a Medi-Cal
provider to include a list of discrepancies required to be
remediated and the amount of time a provider has to show DHCS
that the identified discrepancies have been remediated.
2)Requires DHCS to lift the temporary suspension and to notify
the provider that they are eligible to receive Medi-Cal
reimbursement for services provided after the temporary
suspension was lifted if a provider demonstrates to DHCS that
the discrepancies are remediated and the provider meets the
standards of participation, all within the specified
timeframe.
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
and DHCS has sent a notice to the provider.
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.
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2)Allows DHCS to make unannounced visits to an applicant or to a
provider for determining if enrollment or continued enrollment
or certification is warranted.
3)Provides that if a provider fails to meet the specified
provider enrollment conditions and discrepancies are found
upon inspection, the provider is subject to temporary
suspension from the Medi-Cal program, including temporary
deactivation of the provider's number.
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.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
1)PURPOSE OF THIS BILL . 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 rectified. Current law fails to require any
final action pertaining to providers temporarily suspended and
temporarily deactivated as part of administrative enforcement
actions. According to the author, requiring the additional
action to deactivate under this bill closes this gap, and has
the potential to reduce the prevalence of fraud and increase
program integrity in the Medi-Cal program, and compliance with
the federal Patient Protection and Affordable Care Act (ACA).
2)BACKGROUND . 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
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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 not 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
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 apply to re-enroll.
3)SUPPORT . DHCS states 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. DHCS also 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 adds that providers would be granted appeal
rights and deactivated providers could re-apply to the
Medi-Cal program at any time.
4)PREVIOUS LEGISLATION .
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a) 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.
b) 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.
REGISTERED SUPPORT / OPPOSITION :
Support
Department of Health Care Services
Opposition
None on file.
Analysis Prepared by : Roger Dunstan / HEALTH / (916) 319-2097