Senate Bill No. 299

Introduced by Senator Monning

February 23, 2015

An act to amend Sections 14043.1, 14043.15, 14043.25, 14043.28, 14043.36, 14043.38, 14043.4, and 14043.55 of the Welfare and Institutions Code, relating to Medi-Cal, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 299, as introduced, Monning. Medi-Cal: provider enrollment.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law requires an applicant or provider, as defined, to submit a complete application package for enrollment, continuing enrollment, or enrollment at a new location or a change in location, and generally requires the application package for enrollment, the provider agreement, and all attachments or changes to either that are submitted by specified applicants or providers to be notarized.

This bill would exempt from these notarization requirements any provider that chooses to enroll electronically.

Existing law authorizes the department to implement a 180-day moratorium on the enrollment of providers in a specified provider of services category, as specified. Existing law requires the State Department of Health Care Services to screen Medi-Cal providers and designate each provider or applicant as “limited,” “moderate,” or “high” categorical risk. Existing law requires the department to designate a provider or applicant as a “high” categorical risk if specified circumstances occur, including if the federal Centers for Medicare and Medicaid Services lifted a temporary moratorium within the previous 6 months for the particular provider type submitting the application, as specified.

This bill would also require the department to designate a provider or applicant as a “high” categorical risk if the department lifted a temporary moratorium within the previous 6 months for the particular provider type submitting the application.

This bill would also delete various obsolete provisions of law.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 14043.1 of the Welfare and Institutions
Code is amended to read:

14043.1.  

As used in this article:

(a) “Abuse” means either of the following:

(1) Practices that are inconsistent with sound fiscal or business
practices and result in unnecessary cost to the federal Medicaid
and Medicare programs, the Medi-Cal program, another state’s
Medicaid program, or other health care programs operated, or
financed in whole or in part, by the federal government or a state
or local agency in this state or another state.

(2) Practices that are inconsistent with sound medical practices
and result in reimbursement by the federal Medicaid and Medicare
programs, the Medi-Cal program or other health care programs
operated, or financed in whole or in part, by the federal government
or a state or local agency in this state or another state, for services
that are unnecessary or for substandard items or services that fail
to meet professionally recognized standards for health care.

(b) “Applicant” means an individual, including an ordering,
referring, or prescribing individual, partnership, group, association,
corporation, institution, or entity, and the officers, directors,
owners, managing employees, or agents thereof, that apply to the
department for enrollment as a provider in the Medi-Cal program.

(c) “Application or application package” means a completed
and signed application form, signed under penalty of perjury or
notarized pursuant to Section 14043.25, a disclosure statement, a
provider agreement, and all attachments or changes in the form,
statement, or agreement.

(d) “Appropriate volume of business” means a volume that is
consistent with the information provided in the application and
any supplemental information provided by the applicant or
provider, and is of a quality and type that would reasonably be
expected based upon the size and type of business operated by the
applicant or provider.

(e) “Business address” means the location where an applicant
or provider provides services, goods, supplies, or merchandise,
directly or indirectly, to a Medi-Cal beneficiary. A post office box
or commercial box is not a business address. The business address
for the location of a vehicle or vessel owned and operated by an
applicant or provider enrolled in the Medi-Cal program and used
to provide services, goods, supplies, or merchandise, directly or
indirectly, to a Medi-Cal beneficiary shall either be the business
address location listed on the provider’s application as the location
where similar services, goods, supplies, or merchandise would be
provided or the applicant’s or provider’s pay to address.

(f) “Convicted” means any of the following:

(1) A judgment of conviction has been entered against an
individual or entity by a federal, state, or local court, regardless
of whether there is a posttrial motion, an appeal pending, or the
judgment of conviction or other record relating to the criminal
conduct has been expunged or otherwise removed.

(2) A federal, state, or local court has made a finding of guilt
against an individual or entity.

(3) A federal, state, or local court has accepted a plea of guilty
or nolo contendere by an individual or entity.

(4) An individual or entity has entered into participation in a
first offender, deferred adjudication, or other program or
arrangement where judgment of conviction has been withheld.

(g) “Debt due and owing” means 60 days have passed since a
notice or demand for repayment of an overpayment or another
amount resulting from an audit or examination, for a penalty
assessment, or for another amount due to the department was sent
to the provider, regardless of whether the provider is an institutional
provider or a noninstitutional provider and regardless of whether
an appeal is pending.

(h) “Enrolled or enrollment in the Medi-Cal program” means
authorized under any processes by the department or its agents or
contractors to receive, directly or indirectly, reimbursement for
the provision of services, goods, supplies, or merchandise to a
Medi-Cal beneficiary.

(i) “Fraud” means an intentional deception or misrepresentation
made by a person with the knowledge that the deception could
result in some unauthorized benefit to himself or herself or some
other person. It includes any act that constitutes fraud under
applicable federal or state law.

(j) “Location” means a street, city, or rural route address or a
site or place within a street, city, or rural route address, and the
city, county, state, and nine-digit ZIP Code.

(k) “Not currently enrolled at the location for which the
application is submitted” means either of the following:

(1) The provider is changing location and moving to a different
location than that for which the provider was issued a provider
number.

(2) The provider is adding a business address.

(l) (1) “Individual dentist practice” means a dentist licensed by
the Dental Board of California enrolled or enrolling in Medi-Cal
as an individual provider who is a sole proprietor of his or her
practice or is a corporation owned solely by the individual dentist
and the only dentist practitioner is the owner. An individual dentist
practice may include nondentist allied dental health professionals
employed and supervised by the dentist.

(2) “Individual physician practice” means a physician and
surgeon licensed by the Medical Board of California or the
Osteopathic Medical Board of California enrolled or enrolling in
Medi-Cal as an individual provider who is sole proprietor of his
or her practice or is a corporation owned solely by the individual
physician and the only physician practitioner is the owner. An
individual physician practice may include nonphysician medical
practitioners employed and supervised by the physician.

(m) “Preenrollment period” or “preenrollment” includes the
period of time during which an application package for enrollment,
continued enrollment, or for the addition of or change in a location
is pending.

(n) “Professionally recognized standards of health care” means
statewide or national standards of care, whether in writing or not,
that professional peers of the individual or entity whose provision
of care is an issue recognize as applying to those peers practicing
or providing care within a state. When the United States
Department of Health and Human Services has declared a treatment
modality not to be safe and effective, practitioners that employ
that treatment modality shall be deemed not to meet professionally
recognized standards of health care. This subdivision shall not be
construed to mean that all other treatments meet professionally
recognized standards of care.

(o) “Provider” means an individual, partnership, group,
association, corporation, institution, or entity, and the officers,
directors, owners, managing employees, or agents of a partnership,
group association, corporation, institution, or entity, that provides
services, goods, supplies, or merchandise, directly or indirectly,
including all ordering, referring, and prescribing, to a Medi-Cal
beneficiary and that has been enrolled in the Medi-Cal program.

(p) “Resolution of an investigation for fraud or abuse” means
there is no documentation to indicate either that a charge or
accusation has been filed against the provider and either (1) the
investigation has not been active at any time during the previous
12 months or (2) the department has made a documented good
faith effort and has been unable, for a period of 12 months, to
contact an investigator or responsible representative of any agency
investigating the provider.

(q) “Unnecessary or substandard items or services” means those
that are either of the following:

(1) Substantially in excess of the provider’s usual charges or
costs for the items or services.

(2) Furnished, or caused to be furnished, to patients, whether
or not covered by Medicare, Medicaid, or any of the state health
care programs to which the definitions of applicant and provider
apply, and which are substantially in excess of the patient’s needs,
or of a quality that fails to meet professionally recognized standards
of health care. The department’s determination that the items or
services furnished were excessive or of unacceptable quality shall
be made on the basis of information, including sanction reports,
from the following sources:

(A) The professional review organization for the area served
by the individual or entity.

(B) State or local licensing or certification authorities.

(C) Fiscal agents or contractors or private insurance companies.

(D) State or local professional societies.

(E) Any other sources deemed appropriate by the department.

begin delete

(r) (1) This section shall become operative on the effective date
of the state plan amendment necessary to implement this section,
as stated in the declaration executed by the director pursuant to
paragraph (2).

end delete begin delete

(2) Upon approval of the state plan amendment necessary to
implement this section under Sections 455.410 and 455.440 of
Title 42 of the Code of Federal Regulations, the director shall
execute a declaration, to be retained by the director, that states that
this approval has been obtained and the effective date of the state
plan amendment. The department shall post the declaration on its
Internet Web site and transmit a copy of the declaration to the
Legislature.

end delete

SEC. 2.  

Section 14043.15 of the Welfare and Institutions Code
is amended to read:

14043.15.  

(a) The department may adopt regulations for
certification of each applicant and each provider in the Medi-Cal
program. No certification shall be required for natural persons
licensed or certificated under Division 2 (commencing with Section
500) of the Business and Professions Code, the Osteopathic
Initiative Act, or the Chiropractic Initiative Act.

(b) (1) An applicant or provider who is a natural person, and
is licensed or certificated pursuant to Division 2 (commencing
with Section 500) of the Business and Professions Code, the
Osteopathic Initiative Act, or the Chiropractic Initiative Act, or is
a professional corporation, as defined in subdivision (b) of Section
13401 of the Corporations Code, shall comply with Section
14043.26 and shall 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
pursuant to Section 14043.26, notwithstanding that the applicant
or provider meets the requirements to qualify as exempt from clinic
licensure under subdivision (a) or (m) of Section 1206 of the Health
and Safety Code.

(2) A provider enrolled in the Medi-Cal program pursuant to
paragraph (1), who has disclosed in the application package for
enrollment that the provider’s practice includes the rendering of
services, goods, supplies, or merchandise solely at one, or at more
than one, health facility, as defined in Section 1250 of the Health
and Safety Code, or clinic, as defined in Section 1204 of the Health
and Safety Code, or medical therapy unit, for purposes of Section
123950 of the Health and Safety Code, or residence of the
provider’s patient, or office of a physician and surgeon involved
in the care and treatment of the provider’s patients, shall not be
required to enroll at each such health facility, clinic, medical
therapy unit, patient’s residence, or physician and surgeon’s office
location and may utilize the business addresses listed on the
application for enrollment pursuant to paragraph (1) to claim
reimbursement from the Medi-Cal program for services rendered
by the provider to Medi-Cal beneficiaries at all of those health
facilities, clinics, medical therapy units, residences, or physician
offices.

(3) This subdivision shall not be interpreted to allow the
violation of any state or federal law governing fiscal intermediaries
or Division 2 (commencing with Section 500) of the Business and
Professions Code, the Osteopathic Initiative Act, or the
Chiropractic Initiative Act. This subdivision does not remove the
requirement that each claim for reimbursement from the Medi-Cal
program identify the place of service and the rendering, ordering,
referring, and prescribing provider, where applicable.

(c) An applicant or provider licensed as a clinic pursuant to
Chapter 1 (commencing with Section 1200) of, or a health facility
licensed pursuant to Chapter 2 (commencing with Section 1250)
of, Division 2 of the Health and Safety Code may be enrolled in
the Medi-Cal program as a clinic or a health facility and need not
comply with Section 14043.26 if the clinic or health facility is
certified by the department to participate in the Medi-Cal program.

(d) An applicant or provider that meets the requirements to
qualify as exempt from clinic licensure under subdivisions (b) to
(l), inclusive, or subdivisions (n) to (p), inclusive, of Section 1206
of the Health and Safety Code shall comply with Section 14043.26
and may be enrolled in the Medi-Cal program as either a clinic or
within any other provider category for which the applicant or
provider qualifies. An applicant or provider to which any of the
clinic licensure exemptions specified in this subdivision apply
shall identify the licensure exemption category and document in
its application package the legal and factual basis for the clinic
license exemption claimed.

(e) Notwithstanding subdivisions (a), (b), (c), and (d), an
applicant or provider that meets the requirements to qualify as
exempt from clinic licensure pursuant to subdivision (h) of Section
1206 of the Health and Safety Code, including an intermittent site
that is operated by a licensed primary care clinic or an affiliated
mobile health care unit licensed or approved under Chapter 9
(commencing with Section 1765.101) of Division 2 of the Health
and Safety Code, and that is operated by a licensed primary care
clinic, and for which intermittent site or mobile health unit the
licensed primary care clinic directly or indirectly provides all
staffing, protocols, equipment, supplies, and billing services, need
not enroll in the Medi-Cal program as a separate provider and need
not comply with Section 14043.26 if the licensed primary care
clinic operating the applicant, provider clinic, or mobile health
care unit has notified the department of its separate locations,
premises, intermittent sites, or mobile health care units.

begin delete

(f) (1) This section shall become operative on the effective date
of the state plan amendment necessary to implement this section,
as stated in the declaration executed by the director pursuant to
paragraph (2).

(2) Upon approval of the state plan amendment necessary to
implement this section under Sections 455.410 and 455.440 of
Title 42 of the Code of Federal Regulations, the director shall
execute a declaration, to be retained by the director and posted on
the department’s Internet Web site, that states that this approval
has been obtained and the effective date of the state plan
amendment. The department shall transmit a copy of the declaration
to the Legislature.

end delete

SEC. 3.  

Section 14043.25 of the Welfare and Institutions Code
is amended to read:

14043.25.  

(a) The application form for enrollment, the provider
agreement, and all attachments or changes to either, shall be signed
under penalty of perjury.

(b) The department may require that the application form for
enrollment, the provider agreement, and all attachments or changes
to either, submitted by an applicant or provider licensed pursuant
to Division 2 (commencing with Section 500) of the Business and
Professions Code, the Osteopathic Initiative Act, or the
Chiropractic Initiative Act, be notarized.

(c) Application forms for enrollment, provider agreements, and
all attachments or changes to either, submitted by an applicant or
provider not subject to subdivision (b) shall be notarized. This
subdivision shall not apply with respect to providers under the
In-Home Supportive Services begin delete program. end delete begin insert program or any providers
that choose to enroll electronically. end insert

(d) The department shall collect an application fee for
enrollment, including enrollment at a new location or a change in
location. The application fee shall not be collected from individual
physicians or nonphysician practitioners, from providers that are
enrolled in Medicare or another state’s Medicaid program or
Children’s Health Insurance Program, from providers that submit
proof that they have paid the applicable fee to a Medicare
contractor or to another state’s Medicaid program, or pursuant to
an exemption or waiver pursuant to federal law. The application
fee collected shall be in the amount calculated by the federal
Centers for Medicare and Medicaid Services in effect for the
calendar year during which the application for enrollment is
received by the department.

begin delete

(e) (1) This section shall become operative on the effective date
of the state plan amendment necessary to implement this section,
as stated in the declaration executed by the director pursuant to
paragraph (2).

end delete begin delete

(2) Upon approval of the state plan amendment necessary to
implement this section, the director shall execute a declaration, to
be retained by the director and posted on the department’s Internet
Web site, that states this approval has been obtained and the
effective date of the state plan amendment. The department shall
transmit a copy of the declaration to the Legislature.

end delete

SEC. 4.  

Section 14043.28 of the Welfare and Institutions Code
is amended to read:

14043.28.  

(a) (1) If an application package is denied under
Section 14043.26 or provisional provider status or preferred
provisional provider status is terminated under Section 14043.27,
the applicant or provider shall be prohibited from reapplying for
enrollment or continued enrollment in the Medi-Cal program or
for participation in any health care program administered by the
department or its agents or contractors for a period of three years
from the date the application package is denied or the provisional
provider status is terminated, except as provided otherwise in
paragraph (2) of subdivision (h), or paragraph (2) of subdivision
(i), of Section 14043.26 and as set forth in this section.

(2) If the application is denied under paragraph (2) of
subdivision (h) of Section 14043.26 because the applicant failed
to resubmit an incomplete application package or is denied under
paragraph (2) of subdivision (i) of Section 14043.26 because the
applicant failed to remediate discrepancies, the applicant may
resubmit an application in accordance with paragraph (2) of
subdivision (h) or paragraph (2) of subdivision (i), respectively.

(3) If the denial of the application package is based upon a
conviction for any offense or for any act included in Section
14043.36 or termination of the provisional provider status or
preferred provisional provider status is based upon a conviction
for any offense or for any act included in paragraph (1) of
subdivision (c) of Section 14043.27, the applicant or provider shall
be prohibited from reapplying for enrollment or continued
enrollment in the Medi-Cal program or for participation in any
health care program administered by the department or its agents
or contractors for a period of 10 years from the date the application
package is denied or the provisional provider status or preferred
provisional provider status is terminated.

(4) If the denial of the application package is based upon two
or more convictions for any offense or for any two or more acts
included in Section 14043.36 or termination of the provisional
provider status or preferred provisional provider status is based
upon two or more convictions for any offense or for any two acts
included in paragraph (1) of subdivision (c) of Section 14043.27,
the applicant or provider shall be permanently barred from
enrollment or continued enrollment in the Medi-Cal program or
for participation in any health care program administered by the
department or its agents or contractors.

(5) The prohibition in paragraph (1) against reapplying for three
years shall not apply if the denial of the application or termination
of provisional provider status or preferred provisional provider
status is based upon any of the following:

(A) The grounds provided for in paragraph (4), or subparagraph
(B) of paragraph (7), of subdivision (c) of Section 14043.27.

(B) The grounds provided for in subdivision (d) of Section
14043.27, if the investigation is closed without any adverse action
being taken.

(C) The grounds provided for in paragraph (6) of subdivision
(c) of Section 14043.27. However, the department may deny
reimbursement for claims submitted while the provider was
noncompliant with the federal Clinical Laboratory Improvement
Amendments of 1988 (CLIA) (42 U.S.C. Sec. 263a et seq.).

(D) The grounds provided for in subdivision (b) of Section
14043.36 for being terminated or excluded under Medicare or
under the Medicaid Program or Children’s Health Insurance
Program of any other state.

(b) (1) If an application package is denied under subparagraph
(A), (B), (D), or (E) of paragraph (4) of subdivision (f) of Section
14043.26, or with respect to a provider described in subparagraph
(B) of paragraph (2) of subdivision (h), or subparagraph (B) of
paragraph (2) of subdivision (i), of Section 14043.26, or provisional
provider status or preferred provisional provider status is terminated
based upon any of the grounds stated in subparagraph (A) of
paragraph (7), or paragraphs (1), (2), (3), (5), and (8) to (12),
inclusive, of subdivision (c) of Section 14043.27, all business
addresses of the applicant or provider shall be deactivated and the
applicant or provider shall be removed from enrollment in the
Medi-Cal program by operation of law.

(2) If the termination of provisional provider status is based
upon the grounds stated in subdivision (d) of Section 14043.27
and the investigation is closed without any adverse action being
taken, or is based upon the grounds in subparagraph (B) of
paragraph (7) of subdivision (c) of Section 14043.27 and the
applicant or provider obtains the appropriate license, permits, or
approvals covering the period of provisional provider status, the
termination taken pursuant to subdivision (c) of Section 14043.27
shall be rescinded, the previously deactivated provider numbers
shall be reactivated, and the provider shall be reenrolled in the
Medi-Cal program, unless there are other grounds for taking these
actions.

(c) Claims that are submitted or caused to be submitted by an
applicant or provider who has been suspended from the Medi-Cal
program for any reason or who has had its provisional provider
status terminated or had its application package for enrollment or
continued enrollment denied and all business addresses deactivated
may not be paid for services, goods, merchandise, or supplies
rendered to Medi-Cal beneficiaries during the period of suspension
or termination or after the date all business addresses are
deactivated.

begin delete

(d) (1) This section shall become operative on the effective
date of the state plan amendment necessary to implement this
section, as stated in the declaration executed by the director
pursuant to paragraph (2).

(2) Upon approval of the state plan amendment necessary to
implement this section under Sections 455.434 and 455.450 of
Title 42 of the Code of Federal Regulations, the director shall
execute a declaration, to be retained by the director and posted on
the department’s Internet Web site, that states that this approval
has been obtained and the effective date of the state plan
amendment. The department shall transmit a copy of the declaration
to the Legislature.

end delete

SEC. 5.  

Section 14043.36 of the Welfare and Institutions Code
is amended to read:

14043.36.  

(a) The department shall not enroll any applicant
that has been convicted of any felony or misdemeanor involving
fraud or abuse in any government program, or related to neglect
or abuse of a patient in connection with the delivery of a health
care item or service, or in connection with the interference with
or obstruction of any investigation into health care related fraud
or abuse or that has been found liable for fraud or abuse in any
civil proceeding, or that has entered into a settlement in lieu of
conviction for fraud or abuse in any government program, within
the previous 10 years. In addition, the department may deny
enrollment to any applicant that, at the time of application, is under
investigation by the department or any state, local, or federal
government law enforcement agency for fraud or abuse pursuant
to Subpart A (commencing with Section 455.12) of Part 455 of
Title 42 of the Code of Federal Regulations. The department shall
not deny enrollment to an otherwise qualified applicant whose
felony or misdemeanor charges did not result in a conviction solely
on the basis of the prior charges. If it is discovered that a provider
is under investigation by the department or any state, local, or
federal government law enforcement agency for fraud or abuse,
that provider shall be subject to temporary suspension from the
Medi-Cal program, which shall include temporary deactivation of
the provider’s number, including all business addresses used by
the provider to obtain reimbursement from the Medi-Cal program.

(b) If it is discovered that a provider has been terminated under
Medicare or under the Medicaid Program or Children’s Health
Insurance Program in any other state, the provider shall not be
enrolled in, or shall be subject to termination from, the Medi-Cal
program, which shall include deactivation of the provider’s enrolled
numbers and all business addresses used to obtain reimbursement
from the Medi-Cal program.

(c) The director shall notify in writing the provider of the
temporary suspension and deactivation of the provider’s number,
which shall take effect 15 days from the date of the notification.
Notwithstanding Section 100171 of the Health and Safety Code,
proceedings after the imposition of sanctions provided for in
subdivision (a) shall be in accordance with Section 14043.65.

(d) A temporary suspension may be lifted when a resolution of
an investigation for fraud or abuse occurs.

begin delete

(e) (1) This section shall become operative on the effective date
of the state plan amendment necessary to implement this section,
as stated in the declaration executed by the director pursuant to
paragraph (2).

end delete begin delete

(2) Upon approval of the state plan amendment necessary to
implement this section under Section 455.416 of Title 42 of the
Code of Federal Regulations, the director shall execute a
declaration, to be retained by the director and posted on the
department’s Internet Web site, that states that this approval has
been obtained and the effective date of the state plan amendment.
The department shall transmit a copy of the declaration to the
Legislature.

end delete

SEC. 6.  

Section 14043.38 of the Welfare and Institutions Code
is amended to read:

14043.38.  

(a) Provider types are designated as “limited,”
“moderate,” or “high” categorical risk by the federal government
in Section 424.518 of Title 42 of the Code of Federal Regulations.
The department shall, at minimum, utilize the federal regulations
in determining a provider’s or applicant’s categorical risk.

(b) In accordance with Section 455.450 of Title 42 of the Code
of Federal Regulations, the department shall designate a provider
or applicant as a “high” categorical risk if any of the following
occur:

(1) The department imposes a payment suspension based on a
credible allegation of fraud, waste, or abuse.

(2) The provider or applicant has an existing Medicaid
overpayment based on fraud, waste, or abuse.

(3) The provider or applicant has been excluded by the federal
Office of the Inspector General or another state’s Medicaid program
within the previous 10 years.

(4) The begin insert department or the end insert federal Centers for Medicare and
Medicaid Services 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.

(c) If the department designates a provider or applicant as a
“high” categorical risk, the department or its designee shall do
both of the following:

(1) Conduct a criminal background check of the following
persons:

(A) The provider or applicant. If the provider or applicant is a
nonprofit Drug Medi-Cal provider or applicant, the officers and
executive director of the provider or applicant.

(B) Any person with a 5-percent or greater direct or indirect
ownership interest in the provider or applicant.

(2) Require the following persons to submit a set of fingerprints
within 30 days of the department’s request, in a manner determined
by the department:

(A) The provider or applicant. If the provider or applicant is a
nonprofit Drug Medi-Cal provider or applicant, the officers and
executive director of the provider or applicant.

(B) Any person with a 5-percent or greater direct or indirect
ownership interest in the provider or applicant.

(d) (1) The department shall submit to the Department of Justice
fingerprint images and related information required by the
Department of Justice of Medi-Cal providers or applicants
determined to be a “high” categorical risk pursuant to subdivision
(a), and any person with a 5-percent or greater direct or indirect
ownership interest in those providers and applicants, for the
purposes of obtaining information as to the existence and content
of a record of state or federal convictions and state or federal arrests
and also information as to the existence and content of a record of
state or federal arrests for which the Department of Justice
establishes that the person is free on bail or on his or her
recognizance pending trial or appeal.

(2) When received, the Department of Justice shall forward to
the Federal Bureau of Investigation requests for federal summary
criminal history information received pursuant to this section. The
Department of Justice shall review the information returned from
the Federal Bureau of Investigation and compile and disseminate
a response to the department.

(3) The Department of Justice shall provide a state or federal
level response to the department pursuant to paragraph (1) of
subdivision (p) of Section 11105 of the Penal Code.

(4) The department shall request from the Department of Justice
subsequent notification service, as provided pursuant to Section
11105.2 of the Penal Code, for persons described in paragraph (1).

(5) The Department of Justice shall charge a fee sufficient to
cover the cost of processing the request described in this section.
That fee shall be paid by the subject of the criminal background
check.

(e) For persons subject to the requirements of subdivision (a)
of Section 15660, the procedure for obtaining and submitting
fingerprints and notification by the Department of Justice of
criminal record information set forth in subdivision (c) of Section
15660 shall apply instead of the procedure set forth in subdivision
(d).

SEC. 7.  

Section 14043.4 of the Welfare and Institutions Code
is amended to read:

14043.4.  

begin delete (a) end delete begin delete   end delete If discrepancies are found to exist during the
preenrollment period, the department may conduct additional
inspections prior to enrollment. Failure of a provider to remediate
discrepancies as prescribed by the director may result in denial of
the application for enrollment. The department may deactivate all
of the provider’s business addresses if the department determines
that the discrepancies are material to the provider’s continued
enrollment and the provider’s compliance with program
requirements at the additional business addresses.

begin delete

(b) (1) This section shall become operative on the effective
date of the state plan amendment necessary to implement this
section, as stated in the declaration executed by the director
pursuant to paragraph (2).

end delete begin delete

(2) Upon approval of the state plan amendment necessary to
implement this section under Section 455.416 of Title 42 of the
Code of Federal Regulations, the director shall execute a
declaration, to be retained by the director and posted on the
department’s Internet Web site, that states that this approval has
been obtained and the effective date of the state plan amendment.
The department shall transmit a copy of the declaration to the
Legislature.

end delete

SEC. 8.  

Section 14043.55 of the Welfare and Institutions Code
is amended to read:

14043.55.  

(a)  The department may implement a 180-day
moratorium on the enrollment of providers in a specific provider
of service category, on a statewide basis or within a geographic
area, except that no moratorium shall be implemented on the
enrollment of providers who are licensed as clinics under Section
1204 of the Health and Safety Code, health facilities under Chapter
2 (commencing with Section 1250) of the Health and Safety Code,
clinics exempt from licensure under Section 1206 of the Health
and Safety Code, or natural persons licensed or certified under
Division 2 (commencing with Section 500) of the Business and
Professions Code, the Osteopathic Initiative Act, or the
Chiropractic Initiative Act, when the director determines this action
is necessary to safeguard public funds or to maintain the fiscal
integrity of the program. This moratorium may be extended or
repeated when the director determines this action is necessary to
safeguard public funds or to maintain the fiscal integrity of the
program. The authority granted in this section shall not be
interpreted as a limitation on the authority granted to the
department in Section 14105.3.

(b) If the Secretary of the United States Department of Health
and Human Services establishes a temporary moratorium on
enrollment as described in federal regulations, the department shall
establish a corresponding moratorium covering the same period
and provider types, even if those provider types would not
ordinarily be subject to a moratorium under this section, unless
the department determines that the imposition of the moratorium
will adversely impact beneficiaries access to medical assistance.
A federal moratorium adopted under this subdivision shall not be
subject to the director’s determinations regarding safeguards of
public funds and program integrity or other prerequisites that are
necessary to implement a state-initiated moratorium.

begin delete

(c) (1) This section shall become operative on the effective date
of the state plan amendment necessary to implement this section,
as stated in the declaration executed by the director pursuant to
paragraph (2).

end delete begin delete

(2) Upon approval of the state plan amendment necessary to
implement this section under Section 455.470 of Title 42 of the
Code of Federal Regulations, the director shall execute a
declaration, to be retained by the director and posted on the
department’s Internet Web site, that states that this approval has
been obtained and the effective date of the state plan amendment.
The department shall transmit a copy of the declaration to the
Legislature.

end delete

SEC. 9.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

To ensure the state’s compliance with the federal Patient
Protection and Affordable Care Act (Public Law 111-148) as
originally enacted and as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152) and
to maintain services for health care providers, it is necessary that
this act take effect immediately.