BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    SB 299    
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          |AUTHOR:        |Monning                                        |
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          |VERSION:       |February 23, 2015                              |
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          |HEARING DATE:  |April 8, 2015  |               |               |
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          |CONSULTANT:    |Scott Bain                                     |
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           SUBJECT  :  Medi-Cal:  provider enrollment

           SUMMARY:    Exempts health care providers submitting a Medi-Cal provider  
          application package to the Department of Health Care Services'  
          (DHCS) Medi-Cal provider enrollment division process from the  
          current notarization requirements if the provider enrolls  
          electronically. Conforms state law to federal regulation by  
          requiring DHCS to designate a provider or applicant as a "high"  
          categorical risk if DHCS lifted a temporary moratorium within  
          the previous 6 months for the particular provider type  
          submitting the application.

          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, 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  







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            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.
          
          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 CMS) lifted a temporary moratorium  
            within the previous six months for the particular provider  
            type submitting the application.

          3.Delete various obsolete provisions of law.

           FISCAL  
          EFFECT:    This bill has not been analyzed by a fiscal committee.

           
          COMMENTS:
           1.Author's statement.  According to the author, this bill  
            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.  
            Because DHCS is developing an online enrollment system that is  
            scheduled for a September 2015 rollout, the urgency clause  
            included in this bill is necessary to avoid duplicative  
            identity verification.

          2.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 Provider Application and Validation  
            for Enrollment (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.  








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            The urgency clause in this bill would permit provider  
            applications to be submitted electronically without the  
            current notarization requirement in anticipation of PAVE  
            implementation.
          
          3.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: (a) clinical  
            laboratories (statewide); (b) durable medical equipment  
            providers located in Los Angeles, Orange, Riverside, and San  
            Bernardino Counties, and out-of-state; and, (c) non-chain,  
            non-pharmacist owned pharmacies in Los Angeles County. 
          
          4.Prior legislation. SB 1212 (Walters), of 2014, 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. That bill was held in the  
            Senate Health Committee with a commitment to hold an oversight  
            hearing on the Medi-Cal provider moratoriums.
                 
            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 Affordable Care Act. The changes  
            made by SB 1529 became operative on the effective date of  
            federal approval of a State Plan Amendment (SPA) necessary to  
            implement the change and the DHCS director executing a  
            declaration. The SPA was approved by CMS on November 2012 and  
            DHCS issued a directive in December 2012. SB 299 would delete  








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            obsolete references to the operative and effective dates in SB  
            1529 because federal approval was obtained.

          5.Related legislation. AB 1388 (Obernolte), is a reintroduction  
            of SB 1212 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.

          6.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.

           SUPPORT AND OPPOSITION  :
          Support:  California Association of Physician Groups
                    California Chapter of the American College of  
                    Emergency Physicians
                    California Pharmacists Association
          
          Oppose:   None received.

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