SECTIONS 14043-14045 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 14043-14045

14043. In order to ensure the proper and efficient administration
of the Medi-Cal program, every applicant, as defined in subdivision
(b) of Section 14043.1, and every provider, as defined in subdivision
(o) of Section 14043.1, shall be subject to the requirements of this
article.

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, 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 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,
to a Medi-Cal beneficiary and that has been enrolled in the Medi-Cal
program.
(p) "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.

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 provider.
(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.

14043.2. (a) Whether or not regulations for certification are
adopted under Section 14043.15, in order to be enrolled as a
provider, or for enrollment as a provider to continue, an applicant
or provider may be required to sign a provider agreement and shall
disclose all information as required in federal medicaid regulations
and any other information required by the department. Applicants,
providers, and persons with an ownership or control interest, as
defined in federal medicaid regulations, shall submit their social
security number or numbers to the department, to the full extent
allowed under federal law. The director may designate the form of a
provider agreement by provider type. Failure to disclose the required
information, or the disclosure of false information, shall result in
denial of the application for enrollment or shall make the provider
subject to temporary suspension from the Medi-Cal program, which
shall include temporary deactivation of the provider's number or
numbers, including all business addresses used by the provider to
obtain reimbursement from the Medi-Cal program.
(b) The director shall notify the provider of the temporary
suspension and deactivation of the provider's number or numbers,
including all business addresses used by the provider, and the
effective date thereof. Notwithstanding Section 100171 of the Health
and Safety Code and Section 14123, proceedings after the imposition
of sanctions provided for in subdivision (a) shall be in accordance
with Section 14043.65.

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 program.

14043.26. (a) (1) On and after January 1, 2004, 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 that enrollment for continued participation of all
providers in a specific provider of service category or subgroup of
that category to which the provider belongs will occur, or, except as
provided in subdivisions (b) and (e), a provider not currently
enrolled at a location where the provider intends to provide
services, goods, supplies, or merchandise to a Medi-Cal beneficiary,
shall submit a complete application package for enrollment,
continuing enrollment, or enrollment at a new location or a change in
location.
(2) Clinics licensed by the department pursuant to Chapter 1
(commencing with Section 1200) of Division 2 of the Health and Safety
Code and certified by the department to participate in the Medi-Cal
program shall not be subject to this section.
(3) Health facilities licensed by the department pursuant to
Chapter 2 (commencing with Section 1250) of Division 2 of the Health
and Safety Code and certified by the department to participate in the
Medi-Cal program shall not be subject to this section.
(4) Adult day health care providers licensed pursuant to Chapter
3.3 (commencing with Section 1570) of Division 2 of the Health and
Safety Code and certified by the department to participate in the
Medi-Cal program shall not be subject to this section.
(5) Home health agencies licensed pursuant to Chapter 8
(commencing with Section 1725) of Division 2 of the Health and Safety
Code and certified by the department to participate in the Medi-Cal
program shall not be subject to this section.
(6) Hospices licensed pursuant to Chapter 8.5 (commencing with
Section 1745) of Division 2 of the Health and Safety Code and
certified by the department to participate in the Medi-Cal program
shall not be subject to this section.
(b) A physician and surgeon licensed by the Medical Board of
California or the Osteopathic Medical Board of California, or a
dentist licensed by the Dental Board of California, practicing as an
individual physician practice or as an individual dentist practice,
as defined in Section 14043.1, who is enrolled and in good standing
in the Medi-Cal program, and who is changing locations of that
individual physician practice or individual dentist practice within
the same county, shall be eligible to continue enrollment at the new
location by filing a change of location form to be developed by the
department. The form shall comply with all minimum federal
requirements related to Medicaid provider enrollment. Filing this
form shall be in lieu of submitting a complete application package
pursuant to subdivision (a).
(c) (1) Except as provided in paragraph (2), within 30 days after
receiving an application package submitted pursuant to subdivision
(a), the department shall provide written notice that the application
package has been received and, if applicable, that there is a
moratorium on the enrollment of providers in the specific provider of
service category or subgroup of the category to which the applicant
or provider belongs. This moratorium shall bar further processing of
the application package.
(2) Within 15 days after receiving an application package from a
physician, or a group of physicians, licensed by the Medical Board of
California or the Osteopathic Medical Board of California, or a
change of location form pursuant to subdivision (b), the department
shall provide written notice that the application package or the
change of location form has been received.
(d) (1) If the application package submitted pursuant to
subdivision (a) is from an applicant or provider who meets the
criteria listed in paragraph (2), the applicant or provider shall be
considered a preferred provider and shall be granted preferred
provisional provider status pursuant to this section and for a period
of no longer than 18 months, effective from the date on the notice
from the department. The ability to request consideration as a
preferred provider and the criteria necessary for the consideration
shall be publicized to all applicants and providers. An applicant or
provider who desires consideration as a preferred provider pursuant
to this subdivision shall request consideration from the department
by making a notation to that effect on the application package, by
cover letter, or by other means identified by the department in a
provider bulletin. Request for consideration as a preferred provider
shall be made with each application package submitted in order for
the department to grant the consideration. An applicant or provider
who requests consideration as a preferred provider shall be notified
within 60 days whether the applicant or provider meets or does not
meet the criteria listed in paragraph (2). If an applicant or
provider is notified that the applicant or provider does not meet the
criteria for a preferred provider, the application package submitted
shall be processed in accordance with the remainder of this section.
(2) To be considered a preferred provider, the applicant or
provider shall meet all of the following criteria:
(A) Hold a current license as a physician and surgeon issued by
the Medical Board of California or the Osteopathic Medical Board of
California, which license shall not have been revoked, whether stayed
or not, suspended, placed on probation, or subject to other
limitation.
(B) Be a current faculty member of a teaching hospital or a
children's hospital, as defined in Section 10727, accredited by the
Joint Commission or the American Osteopathic Association, or be
credentialed by a health care service plan that is licensed under the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) or county organized health system, or be a current member in
good standing of a group that is credentialed by a health care
service plan that is licensed under the Knox-Keene Act.
(C) Have full, current, unrevoked, and unsuspended privileges at a
Joint Commission or American Osteopathic Association accredited
general acute care hospital.
(D) Not have any adverse entries in the federal Healthcare
Integrity and Protection Data Bank.
(3) The department may recognize other providers as qualifying as
preferred providers if criteria similar to those set forth in
paragraph (2) are identified for the other providers. The department
shall consult with interested parties and appropriate stakeholders to
identify similar criteria for other providers so that they may be
considered as preferred providers.
(e) (1) If a Medi-Cal applicant meets the criteria listed in
paragraph (2), the applicant shall be enrolled in the Medi-Cal
program after submission and review of a short form application to be
developed by the department. The form shall comply with all minimum
federal requirements related to Medicaid provider enrollment. The
department shall notify the applicant that the department has
received the application within 15 days of receipt of the
application. The department shall issue the applicant a provider
number or notify the applicant that the applicant does not meet the
criteria listed in paragraph (2) within 90 days of receipt of the
application.
(2) Notwithstanding any other provision of law, an applicant or
provider who meets all of the following criteria shall be eligible
for enrollment in the Medi-Cal program pursuant to this subdivision,
after submission and review of a short form application:
(A) The applicant's or provider's practice is based in one or more
of the following: a general acute care hospital, a rural general
acute care hospital, or an acute psychiatric hospital, as defined in
subdivisions (a) and (b) of Section 1250 of the Health and Safety
Code.
(B) The applicant or provider holds a current, unrevoked, or
unsuspended license as a physician and surgeon issued by the Medical
Board of California or the Osteopathic Medical Board of California.
An applicant or provider shall not be in compliance with this
subparagraph if a license revocation has been stayed, the licensee
has been placed on probation, or the license is subject to any other
limitation.
(C) The applicant or provider does not have an adverse entry in
the federal Healthcare Integrity and Protection Data Bank.
(3) An applicant shall be granted provisional provider status
under this subdivision for a period of 12 months.
(f) Except as provided in subdivision (g), within 180 days after
receiving an application package submitted pursuant to subdivision
(a), or from the date of the notice to an applicant or provider that
the applicant or provider does not qualify as a preferred provider
under subdivision (d), the department shall give written notice to
the applicant or provider that any of the following applies, or shall
on the 181st day grant the applicant or provider provisional
provider status pursuant to this section for a period no longer than
12 months, effective from the 181st day:
(1) The applicant or provider is being granted provisional
provider status for a period of 12 months, effective from the date on
the notice.
(2) The application package is incomplete. The notice shall
identify additional information or documentation that is needed to
complete the application package.
(3) The department is exercising its authority under Section
14043.37, 14043.4, or 14043.7, and is conducting background checks,
preenrollment inspections, or unannounced visits.
(4) The application package is denied for any of the following
reasons:
(A) Pursuant to Section 14043.2 or 14043.36.
(B) For lack of a license necessary to perform the health care
services or to provide the goods, supplies, or merchandise directly
or indirectly to a Medi-Cal beneficiary, within the applicable
provider of service category or subgroup of that category.
(C) The period of time during which an applicant or provider has
been barred from reapplying has not passed.
(D) For other stated reasons authorized by law.
(g) Notwithstanding subdivision (f), within 90 days after
receiving an application package submitted pursuant to subdivision
(a) from a physician or physician group licensed by the Medical Board
of California or the Osteopathic Medical Board of California, or
from the date of the notice to that physician or physician group that
does not qualify as a preferred provider under subdivision (d), or
within 90 days after receiving a change of location form submitted
pursuant to subdivision (b), the department shall give written notice
to the applicant or provider that either paragraph (1), (2), (3), or
(4) of subdivision (f) applies, or shall on the 91st day grant the
applicant or provider provisional provider status pursuant to this
section for a period no longer than 12 months, effective from the
91st day.
(h) (1) If the application package that was noticed as incomplete
under paragraph (2) of subdivision (f) is resubmitted with all
requested information and documentation, and received by the
department within 60 days of the date on the notice, the department
shall, within 60 days of the resubmission, send a notice that any of
the following applies:
(A) The applicant or provider is being granted provisional
provider status for a period of 12 months, effective from the date on
the notice.
(B) The application package is denied for any other reasons
provided for in paragraph (4) of subdivision (f).
(C) The department is exercising its authority under Section
14043.37, 14043.4, or 14043.7 to conduct background checks,
preenrollment inspections, or unannounced visits.
(2) (A) If the application package that was noticed as incomplete
under paragraph (2) of subdivision (f) is not resubmitted with all
requested information and documentation and received by the
department within 60 days of the date on the notice, the application
package shall be denied by operation of law. The applicant or
provider may reapply by submitting a new application package that
shall be reviewed de novo.
(B) If the failure to resubmit is by a provider applying for
continued enrollment, the failure shall make the provider also
subject to deactivation of the provider's number and all of the
business addresses used by the provider to provide services, goods,
supplies, or merchandise to Medi-Cal beneficiaries.
(C) Notwithstanding subparagraph (A), if the notice of an
incomplete application package included a request for information or
documentation related to grounds for denial under Section 14043.2 or
14043.36, the applicant or provider shall not reapply 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.
(i) (1) If the department exercises its authority under Section
14043.37, 14043.4, or 14043.7 to conduct background checks,
preenrollment inspections, or unannounced visits, the applicant or
provider shall receive notice, from the department, after the
conclusion of the background check, preenrollment inspection, or
unannounced visit of either of the following:
(A) The applicant or provider is granted provisional provider
status for a period of 12 months, effective from the date on the
notice.
(B) Discrepancies or failure to meet program requirements, as
prescribed by the department, have been found to exist during the
preenrollment period.
(2) (A) The notice shall identify the discrepancies or failures,
and whether remediation can be made or not, and if so, the time
period within which remediation must be accomplished. Failure to
remediate discrepancies and failures as prescribed by the department,
or notification that remediation is not available, shall result in
denial of the application by operation of law. The applicant or
provider may reapply by submitting a new application package that
shall be reviewed de novo.
(B) If the failure to remediate is by a provider applying for
continued enrollment, the failure shall make the provider also
subject to deactivation of the provider's number and all of the
business addresses used by the provider to provide services, goods,
supplies, or merchandise to Medi-Cal beneficiaries.
(C) Notwithstanding subparagraph (A), if the discrepancies or
failure to meet program requirements, as prescribed by the director,
included in the notice were related to grounds for denial under
Section 14043.2 or 14043.36, the applicant or provider shall not
reapply for three years.
(j) If provisional provider status or preferred provisional
provider status is granted pursuant to this section, a provider
number shall be used by the provider for each business address for
which an application package has been approved. This provider number
shall be used exclusively for the locations for which it was
approved, unless the practice of the provider's profession or
delivery of services, goods, supplies, or merchandise is such that
services, goods, supplies, or merchandise are rendered or delivered
at locations other than the provider's business address and this
practice or delivery of services, goods, supplies, or merchandise has
been disclosed in the application package approved by the department
when the provisional provider status or preferred provisional
provider status was granted.
(k) Except for providers subject to subdivision (c) of Section
14043.47, a provider currently enrolled in the Medi-Cal program at
one or more locations who has submitted an application package for
enrollment at a new location or a change in location pursuant to
subdivision (a), or filed a change of location form pursuant to
subdivision (b), may submit claims for services, goods, supplies, or
merchandise rendered at the new location until the application
package or change of location form is approved or denied under this
section, and shall not be subject, during that period, to
deactivation, or be subject to any delay or nonpayment of claims as a
result of billing for services rendered at the new location as
herein authorized. However, the provider shall be considered during
that period to have been granted provisional provider status or
preferred provisional provider status and be subject to termination
of that status pursuant to Section 14043.27. A provider that is
subject to subdivision (c) of Section 14043.47 may come within the
scope of this subdivision upon submitting documentation in the
application package that identifies the physician providing
supervision for every three locations. If a provider submits claims
for services rendered at a new location before the application for
that location is received by the department, the department may deny
the claim.
(l) An applicant or a provider whose application for enrollment,
continued enrollment, or a new location or change in location has
been denied pursuant to this section, may appeal the denial in
accordance with Section 14043.65.
(m) (1) Upon receipt of a complete and accurate claim for an
individual nurse provider, the department shall adjudicate the claim
within an average of 30 days.
(2) During the budget proceedings of the 2006-07 fiscal year, and
each fiscal year thereafter, the department shall provide data to the
Legislature specifying the timeframe under which it has processed
and approved the provider applications submitted by individual nurse
providers.
(3) For purposes of this subdivision, "individual nurse providers"
are providers authorized under certain home- and community-based
waivers and under the state plan to provide nursing services to
Medi-Cal recipients in the recipients' own homes rather than in
institutional settings.
(n) The amendments to subdivision (b), which implement a change
of location form, and the addition of paragraph (2) to subdivision
(c), the amendments to subdivision (e), and the addition of
subdivision (g), which prescribe different processing timeframes for
physicians and physician groups, as contained in Chapter 693 of the
Statutes of 2007, shall become operative on July 1, 2008.

14043.27. (a) If an applicant or provider is granted provisional
provider status or preferred provisional provider status pursuant to
Section 14043.26 and, if at any time during the provisional provider
status period or preferred provisional provider status period, the
department conducts any announced or unannounced visits or any
additional inspections or reviews pursuant to this chapter or Chapter
8 (commencing with Section 14200), or the regulations adopted
thereunder, or pursuant to Section 100185.5 of the Health and Safety
Code, and discovers or otherwise determines the existence of any
ground to deactivate the provider's number and business addresses or
suspend the provider from the Medi-Cal program pursuant to this
chapter or Chapter 8 (commencing with Section 14200), or the
regulations adopted thereunder, or pursuant to Section 100185.5 of
the Health and Safety Code, or if any of the circumstances listed in
subdivision (c) occur, the department shall terminate the provisional
provider status or preferred provisional provider status of the
provider, regardless of whether the period of time for which the
provisional provider status or preferred provisional provider status
was granted under Section 14043.26 has elapsed.
(b) Termination of provisional provider status or preferred
provisional provider status shall include deactivation of the
provider's number, including all business addresses used by the
provider to obtain reimbursement from the Medi-Cal program and
removal of the provider from enrollment in the Medi-Cal program,
except where the termination is based upon a ground related solely to
a specific location for which provisional provider status was
granted. Termination of provisional provider status based upon
grounds related solely to a specific location may include failure to
have an established place of business, failure to possess the
business or zoning permits or other approvals necessary to operate a
business, or failure to possess the appropriate licenses, permits, or
certificates necessary for the provider of service category or
subcategory identified by the provider in its application package.
Where the grounds relate solely to a specific location, the
termination of provisional provider status shall include only
deactivation of the specific locations that the grounds apply to and
shall include removal of the provider from enrollment in the Medi-Cal
program only if, after deactivation of the specific locations, the
provider does not have any business address that is not deactivated.
(c) The following circumstances are grounds for termination of
provisional provider status or preferred provisional provider status:
(1) The provider, persons with an ownership or control interest in
the provider, or persons who are directors, officers, or managing
employees of the provider have been convicted of any felony, or
convicted of any misdemeanor involving fraud or abuse in any
government program, 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 have been
found liable for fraud or abuse in any civil proceeding, or have
entered into a settlement in lieu of conviction for fraud or abuse in
any government program within 10 years of the date of the
application package.
(2) There is a material discrepancy in the information provided to
the department, or with the requirements to be enrolled, that is
discovered after provisional provider status or preferred provisional
provider status has been granted and that cannot be corrected
because the discrepancy occurred in the past.
(3) The provider has provided material information that was false
or misleading at the time it was provided.
(4) The provider failed to have an established place of business
at the business address for which the application package was
submitted at the time of any onsite inspection, announced or
unannounced visit, or any additional inspection or review conducted
pursuant to this article or a statute or regulation governing the
Medi-Cal program, unless the practice of the provider's profession or
delivery of services, goods, supplies, or merchandise is such that
services, goods, supplies, or merchandise are rendered or delivered
at locations other than the business address and this practice or
delivery of services, goods, supplies, or merchandise has been
disclosed in the application package approved by the department when
the provisional provider status or preferred provisional provider
status was granted.
(5) The provider meets the definition of a clinic under Section
1200 of the Health and Safety Code, but is not licensed as a clinic
pursuant to Chapter 1 (commencing with Section 1200) of Division 2 of
the Health and Safety Code and fails to meet the requirements to
qualify for at least one exemption pursuant to Section 1206 or 1206.1
of the Health and Safety Code.
(6) The provider performs clinical laboratory tests or
examinations, but it or its personnel do not meet CLIA, and the
regulations adopted thereunder, and the state clinical laboratory
law, do not possess valid CLIA certificates and clinical laboratory
registrations or licenses pursuant to Chapter 3 (commencing with
Section 1200) of Division 2 of the Business and Professions Code, or
are not exempt from licensure as a clinical laboratory under Section
1241 of the Business and Professions Code.
(7) The provider fails to possess either of the following:
(A) The appropriate licenses, permits, certificates, or other
approvals needed to practice the profession or occupation, or provide
the services, goods, supplies, or merchandise the provider
identified in the application package approved by the department when
the provisional provider status or preferred provisional provider
status was granted and for the location for which the application was
submitted.
(B) The business or zoning permits or other approvals necessary to
operate a business at the location identified in its application
package approved by the department when the provisional provider
status or preferred provisional provider status was granted.
(8) The provider, or if the provider is a clinic, group,
partnership, corporation, or other association, any officer,
director, or shareholder with a 10 percent or greater interest in
that organization, commits two or more violations of the federal or
state statutes or regulations governing the Medi-Cal program, and the
violations demonstrate a pattern or practice of fraud, abuse, or
provision of unnecessary or substandard medical services.
(9) The provider commits any violation of a federal or state
statute or regulation governing the Medi-Cal program or of a statute
or regulation governing the provider's profession or occupation and
the violation represents a threat of immediate jeopardy or
significant harm to any Medi-Cal beneficiary or to the public
welfare.
(10) The provider submits claims for payment that subject a
provider to suspension under Section 14043.61.
(11) The provider submits claims for payment for services, goods,
supplies, or merchandise rendered at a location other than the
business address or addresses listed on the application for
enrollment, unless the practice of the provider's profession or
delivery of services, goods, supplies, or merchandise is such that
services, goods, supplies, or merchandise are rendered or delivered
at locations other than the business address and this practice or
delivery of services, goods, supplies, or merchandise has been
disclosed in the application package approved by the department when
the provisional provider status was granted.
(12) The provider has not paid its fine, or has a debt due and
owing, including overpayments and penalty assessments, to any
federal, state, or local government entity that relates to Medicare,
medicaid, Medi-Cal, or any other federal or state health care
program, and has not made satisfactory arrangements to fulfill the
obligation or otherwise been excused by legal process from fulfilling
the obligation.
(d) If, during a provisional provider status period or a preferred
provisional provider status period, the department conducts any
announced or unannounced visits or any additional inspections or
reviews pursuant to this chapter or Chapter 8 (commencing with
Section 14200), or the regulations adopted thereunder, and commences
an investigation for fraud or abuse, or discovers or otherwise
determines that the provider is under investigation for fraud or
abuse by any other state, local, or federal government law
enforcement agency, the provider shall be subject to termination of
provisional provider status or preferred provisional provider status,
regardless of whether the period of time for which the provisional
provider status or preferred provisional provider status was granted
under Section 14043.26 has elapsed.
(e) A provider whose provisional provider status or preferred
provisional provider status has been terminated pursuant to this
section may appeal the termination in accordance with Section
14043.65.
(f) Any department-recovered fine or debt due and owing, including
overpayments, that are subsequently determined to have been
erroneously collected shall be promptly refunded to the provider,
together with interest paid in accordance with subdivision (e) of
Section 14171 and Section 14172.5.

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 CLIA.
(b) (1) If an application package is denied under subparagraph
(A), (B), or (D) 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.

14043.29. (a) If, at the end of the period for which provisional
provider status or preferred provisional provider status was granted
under Section 14043.26, all of the following conditions are met, the
provisional status shall cease and the provider shall be enrolled in
the Medi-Cal program without designation as a provisional provider:
(1) The provider has demonstrated an appropriate volume of
business.
(2) The provisional provider status or preferred provisional
provider status has not been terminated or if it has been terminated,
the act of termination was rescinded.
(3) The provider continues to meet the standards for enrollment in
the Medi-Cal program as set forth in this article and Section 51000
and following of Title 22 of the California Code of Regulations.
(b) (1) An applicant or a provider who applied for enrollment or
continued enrollment in the Medi-Cal program, prior to May 1, 2003,
and for whom the application has not been approved or denied, or who
has not received a notice on or before January 1, 2004, that the
department is exercising its authority under Section 14043.37,
14043.4, or 14043.7 to conduct background checks, preenrollment
inspections, or unannounced visits, shall be granted provisional
provider status effective on January 1, 2004. Applications from
applicants or providers who have been so noticed prior to January 1,
2004, shall be processed in accordance with subdivision (h) of
Section 14043.26.
(2) Applications from applicants or providers that have been
received by the department after May 1, 2003, but prior to January 1,
2004, shall be processed in accordance with Section 14043.26, except
that these application packages shall be deemed to have been
received by the department on January 1, 2004.

14043.3. A provider shall be required to reimburse those Medi-Cal
funds received during any period for which material information was
not reported, or reported falsely, to the department.

14043.34. (a) As a condition of a pharmacy's participation in the
Medi-Cal program, the pharmacy shall have in stock and regularly
dispense prescription drugs.
(b) For purposes of this section, "prescription drugs" means any
drug unsafe for self use by a person, and includes either of the
following:
(1) Any drug that bears the legend: "Rx Only" or "Caution: federal
law prohibits dispensing without prescription" or words of similar
import.
(2) Any other drug that by federal or state law can be lawfully
dispensed by the prescription of a licensed physician and surgeon.

14043.341. (a) Each provider that dispenses, as defined in Section
4024 of the Business and Professions Code, or that furnishes, as
defined in Section 4026 of the Business and Professions Code, a
controlled drug, a dangerous drug, or a dangerous device to a
Medi-Cal beneficiary, or a drug or device requiring a written order
or prescription for the drug or device to be covered under the
Medi-Cal program, or who obtains a biological specimen from a
Medi-Cal beneficiary for the performance of a clinical laboratory
test or examination shall maintain a record of the signature of the
person receiving the drug or device or from whom a biological
specimen was obtained; the printed name of the recipient or person
from whom the biological specimen was obtained; the date signed; for
a drug or device, the prescription number or a description of the
item or items dispensed or furnished; and if the recipient is not the
beneficiary for whom the drug or device was ordered or prescribed or
from whom a biological specimen was obtained, a notation of the
recipient's relationship to that beneficiary. The signature and
printed name of the person from whom a biological specimen is
obtained on the requisition provided to the clinical laboratory for
performance of the test or examination for which the specimen was
obtained shall be sufficient to comply with this section if a copy of
the signed requisition is kept by the provider obtaining the
biological specimen. Furthermore, no signature is required under this
section where the biological specimen is obtained for the purpose of
anatomical pathology examinations performed during the inpatient or
outpatient surgery if a notation of the performance of the anatomical
pathology examination appears in the medical record.
(b) For purposes of this section:
(1) "Biological specimen" shall have the same meaning as in
Section 1206 of the Business and Professions Code.
(2) "Clinical laboratory test or examination" shall have the same
meaning as in Section 1206 of the Business and Professions Code.
(3) "Controlled substance" shall mean any substance listed in
Chapter 2 (commencing with Section 11053) of Division 10 of the
Health and Safety Code.
(4) "Dangerous drug" or "dangerous device" has the same meaning as
in Section 4022 of the Business and Professions Code.
(5) "Drug or device" means:
(A) "Drug," as defined in Section 4025 of the Business and
Professions Code.
(B) "Device," as defined in Section 4023 of the Business and
Professions Code.
(C) Pharmaceuticals, medical equipment, medical supplies,
orthotics and prosthetics appliances, and other product-like supplies
or equipment.
(c) Nothing in this section shall require a provider who dispenses
or furnishes a complimentary sample of a dangerous drug to maintain
the signature of the person receiving that drug, provided no charge
is made to the patient, and an appropriate record is entered in the
patient's chart.
(d) If the dispensing or furnishing of a drug or device occurs on
a periodic basis within an established provider-patient relationship,
the signature shall only be required upon the initial dispensing or
furnishing of the drug, so long as an appropriate record of each
dispensing or furnishing is entered in the patient's chart.
(e) If the obtaining of a biological specimen is required in order
that a test or examination occur on a periodic basis within an
established provider-patient relationship, the signature shall only
be required upon obtaining the biological specimen necessary for the
initial test or examination so long as an appropriate record of each
test or examination is entered in the patient's chart.
(f) The requirement of this section to obtain a signature shall
not apply to a licensed pharmacy or clinical laboratory that is owned
and operated by a nonprofit health care service plan that has at
least 3,500,000 enrollees or that is owned and operated by a
nonprofit hospital corporation that has a mutually exclusive contract
with a nonprofit health care service plan that has at least
3,500,000 enrollees, or to a licensed provider who practices within a
physician organization that meets either of the requirements set
forth in paragraph (2) of subdivision (g) of Section 1375.4 of the
Health and Safety Code.

14043.35. Sections 14043.2, 14043.25, and 14043.3 shall not limit
the authority granted the director and the rights granted providers
in Section 14123. Action taken under the authority granted in Section
14123 shall be taken in accordance with that section.

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) 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.

14043.37. The department may complete a background check on
applicants for the purpose of verifying the accuracy of the
information provided to the department for purposes of enrolling in
the Medi-Cal program and in order to prevent fraud and abuse. The
background check may include, but is not limited to, the following:
(a) Onsite inspection prior to enrollment.
(b) Review of business records.
(c) Data searches.

14043.4. If discrepancies are found to exist during the
preenrollment period, the department may conduct additional
inspections prior to enrollment. Failure to remediate discrepancies
as prescribed by the director may result in denial of the application
for enrollment.

14043.45. (a) Notwithstanding whether a National Provider
Identification (NPI) number is required by the rules issued by the
Centers for Medicare and Medicaid Services implementing the Health
Insurance Portability and Accountability Act of 1996 (HIPAA), the
department may require that an applicant or provider submit an NPI
number.
(b) For transactions not specifically identified as covered
transactions under the HIPAA NPI rules, the department may require
that a provider use a National Provider Identification number on
those transactions, or the department may issue the provider a unique
identification number or numbers that shall be used on all
transactions.
(c) Notwithstanding any other provisions of law, the department
may, without taking regulatory action pursuant to Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, implement, interpret, or make specific this
section by means of a provider bulletin or similar instruction. The
department shall notify and consult with interested parties and
appropriate stakeholders in implementing, interpreting, or making
specific this statute, including taking all of the following actions:
(1) Notifying provider representatives of the proposed action or
change. The notice shall occur at least 10 business days prior to the
meeting provided for in paragraph (2).
(2) Scheduling at least one meeting with interested parties and
appropriate stakeholders to discuss the action or change.
(3) Allowing for written input regarding the action or change.
(4) Providing at least 30 days' advance notice of the effective
date of the action or change.
(d) This section shall apply to any health care program
administered by the department or its agents or contractors.

14043.46. (a) Notwithstanding any other provision of law, on the
effective date of the act adding this section, the department may
implement a one-year moratorium on the certification and enrollment
into the Medi-Cal program of new adult day health care centers on a
statewide basis or within a geographic area.
(b) The moratorium shall not apply to the following:
(1) Programs of All-Inclusive Care for the Elderly (PACE)
established pursuant to Chapter 8.75 (commencing with Section 14590).
(2) An organization that currently holds a designation as a
federally qualified health center as defined in Section 1396d(l)(2)
of Title 42 of the United States Code.
(3) An organization that currently holds a designation as a
federally qualified rural health clinic as defined in Section 1396d
(l)(1) of Title 42 of the United States Code.
(4) An applicant with the physical location of the center in an
unserved area, which is defined as a county having no licensed and
certified adult day health care center within its geographic
boundary.
(5) Commencing May 1, 2006, an applicant for certification that
meets all of the following:
(A) Is serving persons discharged into community housing from a
nursing facility operated by the City and County of San Francisco.
(B) Has submitted, after December 31, 2005, but prior to February
1, 2006, an application for certification that has not been denied.
(C) Meets all criteria for certification imposed under this
article and is licensed as an adult day health care center pursuant
to Chapter 3.3 (commencing with Section 1570) of Division 2 of the
Health and Safety Code.
(6) An applicant that is requesting expansion or relocation, or
both, that has been Medi-Cal certified as an adult day health care
center for at least four years, is expanding or relocating within the
same county, and that meets one of the following population-based
criteria as reported in the California Long Term Care County Data
Book, 2002:
(A) The county is ranked number one or two for having the highest
ratio of persons over 65 years of age receiving Medi-Cal benefits.
(B) The county is ranked number one or two for having the highest
ratio of persons over 85 years of age residing in the county.
(C) The county is ranked number one or two for having the greatest
ratio of persons over 65 years of age living in poverty.
(7) An applicant for certification that is currently licensed and
located in a county with a population that exceeds 9,000,000 and
meets the following criteria:
(A) The applicant has identified a special population of regional
center consumers whose individual program plan calls for the
specialized health and social services that are uniquely provided
within the adult day health care center, in order to prevent
deterioration of the special population's health status.
(B) The referring regional center submits a letter to the Director
of Health Services supporting the applicant for certification as an
adult day health care provider for this special population.
(C) The applicant is currently providing services to the special
population as a vendor of the referring regional center.
(D) The participants in the center are clients of the referring
regional center and are not residing in a health facility licensed
pursuant to subdivision (c), (d), (g), (h), or (k) of Section 1250 of
the Health and Safety Code.
(c) The moratorium shall not prohibit the department from
approving a change of ownership, relocation, or increase in capacity
for an adult day health care center if the following conditions are
met:
(1) For an application to change ownership, the adult day health
care center meets all of the following conditions:
(A) Has been licensed and certified prior to the effective date of
this section.
(B) Has a license in good standing.
(C) Has a record of substantial compliance with certification laws
and regulations.
(D) Has met all requirements for the change application.
(2) For an application to relocate an existing facility, the
relocation center must meet all of the conditions of paragraph (1)
and both of the following conditions:
(A) Must be located in the same county as the existing licensed
center.
(B) Must be licensed for the same capacity as the existing
licensed center, unless the relocation center is located in an
underserved area, which is defined as a county having 2 percent or
fewer Medi-Cal beneficiaries over the age of 65 years using adult day
health care services, based on 2002 calendar year Medi-Cal
utilization data.
(3) For an application to increase the capacity of an existing
facility, the center must meet all of the conditions of paragraph (1)
and must be located in an underserved area, which is defined as a
county having 2 percent or fewer Medi-Cal beneficiaries over the age
of 65 years using adult day health care services, based on 2002
calendar year Medi-Cal utilization data.
(d) Following the first 180 days of t