SB 299

Page 1

Date of Hearing: June 30, 2015

ASSEMBLY COMMITTEE ON HEALTH

Rob Bonta, Chair

SBPCA Bill Id:SB 299

Author:(Monning) – As Amended Ver:May 18, 2015

SENATE VOTE: 37-0

SUBJECT: Medi-Cal: provider enrollment.

SUMMARY: Makes minor changes in the processes used by the Department of Health Care Services (DHCS) to enroll health care providers in the Medi-Cal program. Specifically, this bill:

1)  Exempts, from the current DHCS notarization requirements, any provider that chooses to enroll electronically.

2)  Conforms state law to federal regulation by requiring DHCS to designate a provider or applicant as a “high” categorical risk if DHCS (in addition to the federal Centers for Medicare and Medicaid Services (CMS)) lifted a temporary moratorium within the previous six months for the particular provider type submitting the application.

3)  Deletes various obsolete provisions of law.

EXISTING LAW:

1.  Establishes the Medi-Cal program, which is administered by DHCS, under which qualified low-income individuals receive health care services.

2.  Requires an applicant or provider to submit a complete application package for enrollment as a Medi-Cal provider, and generally requires the application package for enrollment, the provider agreement, and all attachments or changes that are submitted by specified applicants or providers to be notarized.

3.  Designates Medi-Cal provider types as “limited,” “moderate,” or “high” categorical risk by the federal government, and requires DHCS, at minimum, to utilize the federal regulations in determining a provider’s or applicant’s categorical risk.

4.  Requires DHCS to conduct specified measures for high categorical risk providers or applicants, including conducting a criminal background check and taking fingerprints.

5.  Requires DHCS, in accordance with federal regulation, to designate a provider or applicant as a high categorical risk if specified conditions are met, including if the federal Centers for Medicare and Medicaid Services (CMS) lifted a temporary moratorium within the previous six months for the particular provider type submitting the application, the applicant would have been prevented from enrolling based on that previous moratorium, and the applicant applies for enrollment as a provider at any time within six months from the date the moratorium was lifted.

FISCAL EFFECT: According to the Senate Appropriations Committee this bill has a negligible fiscal impact.

COMMENTS:

1)  PURPOSE OF THIS BILL. SB 299 removes the obsolete statutory notarization requirement for Medi-Cal provider applicants when applying online in an effort to simplify and improve the Medi-Cal enrollment process. Notarization is required under state law for specified applicants and providers seeking enrollment as a Medi-Cal provider in an effort to verify the identity of the provider. This requirement will become obsolete for providers doing their enrollment on-line when DHCS rolls out its new on-line enrollment system, called Provider Application and Validation for Enrollment (PAVE). Because the Department of Health Care Services (DHCS) is developing an online enrollment system that is on track for a September 2015 rollout and state law must conform to federal regulations as soon as possible, the urgency clause included in this bill is necessary

In addition, this bill ensures that California is compliant with federal regulations on its Medicaid program. Not conforming could risk the state losing federal Medicaid funding if the state is found in noncompliance. Federal regulations (Section 455.450 of Title 42 of the Code of Federal Regulations) specify that the state Medicaid agencies must adjust the categorical risk level to “high” when the state Medicaid agency of CMS in the previous six month lifted a temporary moratorium.

There is also obsolete conditional language added by SB 1529 (Alquist), Chapter 797, Statutes of 2012, in state law that should be removed because the obligations are completed.

2)  BACKGROUND.

a)  Medi-Cal provider enrollment and electronic applications. State law governing Medi-Cal and federal Medicaid law and regulations contain provisions to prevent and address fraud and abuse in the Medicaid program. DHCS’ Provider Enrollment Division (PED) is responsible for the enrollment and re-enrollment of 40 fee-for-service health care provider types into the Medi-Cal program. Later this year, DHCS’ PED is proposing to implement the PAVE system. PAVE is intended to transform DHCS’ provider enrollment activities from a manual process to a web-based portal that providers can use to complete and submit their applications, verifications and report changes. The urgency clause in this bill would permit provider applications to be submitted electronically without the current notarization requirement in anticipation of PAVE implementation.

b)  Categorical risk of fraud and provider moratorium. Federal regulations require state Medicaid agencies to screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” Federal regulations require, when a state Medicaid agency designates a provider as a “high” categorical risk, the agency to conduct a criminal background check and require the submission of fingerprints. Under federal regulations, state Medicaid agencies must adjust the categorical risk level from “limited” or “moderate” to “high” when the State Medicaid agency or CMS in the previous six months lifted a temporary moratorium.
This bill would conform state law to this federal regulation if DHCS were to lift a temporary moratorium. DHCS has three enrollment moratoriums currently in effect: i) clinical laboratories (statewide); ii) durable medical equipment providers located in Los Angeles, Orange, Riverside, and San Bernardino Counties, and out-of-state; and, iii) non-chain, non-pharmacist owned pharmacies in Los Angeles County.

3)  SUPPORT. The California Chapter of the American College of Emergency Physicians (Cal-ACEP) writes in support that emergency physicians have reported problems with enrolling in Medi-Cal program, and delays can be more than one year before the emergency physician is approved. Cal-ACEP states any effort to lessen the administrative burden on Medi-Cal providers is a welcome relief, and by exempting providers who choose to enroll electronically from the notarization requirements, this bill would do just that. The California Pharmacy Association supports DHCS’s efforts to find innovative solutions to alleviate the Medi‐Cal provider enrollment process for pharmacists and other healthcare professionals. In addition, they argue DHCS should have authority over the state’s Medi‐Cal provider screening process rather than CMS. DHCS supports the changes made by this bill because they are necessary to assure continued efficient administration of the Medi-Cal program in compliance with federal regulations.

4)  RELATED LEGISLATION. AB 1388 (Obernolte), is a reintroduction of SB 1212 (Walters), of 2014, that would exempt a clinical laboratory from the Medi-Cal provider moratorium if the lab had an existing relationship with the Medi-Cal program as a provider of benefits through a contract with a Medi-Cal managed care plan. AB 1388 is in this Committee.

5)  PREVIOUS LEGISLATION.

a)  SB 1212 would have exempted a clinical laboratory from the Medi-Cal provider moratorium if the lab had an existing relationship with the Medi-Cal program as a provider of benefits through a contract with a Medi-Cal managed care plan. SB 1212 was held in the Senate Health Committee.

b)  SB 1529 revises screening, enrollment, disenrollment, suspensions, and other sanctions for fee-for-service Medi-Cal providers and suppliers to conform to the federal Patient Protection and Affordable Care Act.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Physician Groups

California Chapter of the American College of Emergency Physicians

California Department of Health Care Services

California Pharmacists Association

Opposition

None on file.

Analysis Prepared by: Roger Dunstan / HEALTH / (916) 319-2097