SECTIONS 14125-14125.9 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 14125-14125.9

14125. (a) The purpose of this article is to establish provider
reimbursement rates for incontinence medical supplies covered by the
Medi-Cal program. Reimbursement for incontinence medical supplies
shall consist of the negotiated contract prices within each product
category, plus a markup fee equal to 38 percent of the contract
price.
(b) (1) In establishing the list of incontinence medical supplies,
the department may enter into exclusive or nonexclusive contracts on
a bid or negotiated basis with manufacturers, distributors,
dispensers, or suppliers of incontinence medical supplies.
(2) To ensure that the health needs of Medi-Cal beneficiaries are
met, the department shall, when evaluating a decision to execute a
contract, and when evaluating incontinence medical supplies for
retention on, addition to, or deletion from, the list of incontinence
medical supplies, consider all of the following criteria:
(A) The safety of the product.
(B) The effectiveness of the product.
(C) The essential need for the product.
(D) The potential for misuse of the product.
(E) The immediate or long-term cost-effectiveness of the product.
(3) The deficiency of a product when measured by one of the
criteria specified in paragraph (2) may be sufficient to support a
decision that the product should be deleted from, should not be added
to, or should not be retained on, the list of medical supplies.
However, the superiority of a product under one criterion may be
sufficient to warrant the addition or retention of the product,
notwithstanding a deficiency in another criterion.
(4) In the evaluation of the effectiveness of a product, the
department may require the manufacturer, distributor, dispenser, or
supplier to submit their products to testing by an independent
laboratory. For the purposes of this section, "independent laboratory"
means an analytical laboratory that is not a subsidiary of,
affiliated with, or on retainer for, the manufacturer, distributor,
dispenser, or supplier.
(c) The department may use Healthcare Common Procedure Code System
codes or Universal Product Number codes for the processing and
payment of incontinence medical supplies.

14125.1. Unless the context requires otherwise, the definitions set
forth in this section shall govern the construction and meaning of
the terms and phrases used in this article.
(a) "Incontinence medical supplies" means disposable medical
supplies that are covered benefits under the Medi-Cal program
pursuant to subdivision (s) of Section 14132 when prescribed by a
physician for the treatment of individuals who are incontinent.
Incontinence medical supplies include, but are not limited to,
disposable diapers, briefs, underpads, undergarments, liners or pads,
pant and pad systems, and skin care products.
(b) "Department" means the State Department of Health Services.
(c) "Manufacturer" means any person, partnership, or corporation
who assembles or combines the components of incontinence supplies
into a final product sold to dealers.
(d) "Principal labeler" means any person, partnership, or
corporation who purchases from a manufacturer an assembled product
which is sold to dealers under the principal labeler's label.
(e) "Dealer" means any person, partnership, corporation, or other
entity that is recognized by the manufacturer or principal labeler as
a provider or retail outlet for its line of incontinence medical
supplies, and which provide these supplies directly to consumers. The
term "dealer" includes a retailer.

14125.2. (a) (1) To qualify for Medi-Cal coverage a product shall
be in general retail distribution, sold to the general public, and
comply with any standards for products established by law or
regulation. No product that is manufactured, distributed, or
otherwise promoted for the exclusive use of beneficiaries of the
Medi-Cal program shall be a Medi-Cal benefit.
(2) For purposes of this section, "product" means any product
which is in general retail distribution.
(3) For purposes of this subdivision, "general retail distribution"
means either of the following:
(A) The product is included in a listing of approved products for
purchase either by the federal or state government.
(B) The product is on display and available for purchase by
customers for private payment at licensed pharmacies or licensed
medical supply dealers within California which are physical locations
open to the general public.
(b) In order to qualify as a Medi-Cal provider of incontinence
medical supplies, a dealer shall have an established place of
business that is readily identifiable as a medical supply business,
be open to the general public at regularly established business
hours, have incontinence supplies in stock on the premises or in a
warehouse under the provider's direct control, and meet all local
laws and ordinances regarding business licensing and operations. The
department shall establish additional rules and regulations for
participation in the Medi-Cal program as it deems necessary to ensure
adequate safeguards to the integrity of the Medi-Cal program.

14125.3. The department shall reduce the weighted average of the
negotiated contract prices within each product category in effect on
June 30, 1992, as follows:
(a) For all premium underpads, as defined by the department, by 24
percent.
(b) For all other incontinence medical supply products, as defined
by the department, by 14 percent.

14125.4. (a) No later than January 1, 1994, the department shall
establish utilization controls that limit expenditures for
incontinence medical supplies per beneficiary to no more than one
hundred sixty-five dollars ($165) per month. Incontinence creams and
washes shall be excluded from this limitation. The expenditure limit
established by this section may be adjusted in the annual Budget Act
to reflect changes in wholesale prices. These utilization controls
shall be published in provider bulletins.
(b) The department shall, by prior authorization, allow a
beneficiary to exceed the utilization limits established by this
section when justified to the department's satisfaction not later
than January 1, 1994.
(c) Notwithstanding any other provision of law, no regulations
shall be necessary to define the incontinence medical supplies
subject to the reductions required in Section 14125.3, or to
establish and implement the utilization controls required in this
section.

14125.8. (a) In order to more fully identify the owner or owners of
companies or corporations that apply to be or currently are
providers of incontinence medical supplies, within 30 days of the
receipt of a request from the department, or a request to the
department from the Department of Justice, the applicant or provider
shall provide, as part of the application process or as a condition
of continued participation in the Medi-Cal program, the following:
(1) The name of the corporation, the official titles of the
applicants, and a list of all the corporate officers.
(2) The California driver's license or California identification
card number of the applicants, coowners, corporate officers, and
financially interested parties.
(3) The applicant's business permit control number, issued by the
State Board of Equalization, for the business location where services
are rendered to the public.
(4) A statement of all current sources of capital, identity of all
investors, disclosure of all manufacturers, suppliers, and providers
currently doing business with the applicant, and disclosure of all
entities to whom the applicant has extended a line of credit.
(5) A statement certifying that all information supplied pursuant
to this section is accurate.
(b) A Medi-Cal provider of incontinence supplies shall not submit
a claim for goods or services to the department prior to the date the
goods or services are delivered to the Medi-Cal beneficiary. The
date of delivery to a beneficiary shall be the earlier of the date
the beneficiary actually received the goods or services, or the date
the goods were posted or otherwise dispatched from the provider's
premises and control. A claim submitted to the department prior to
the date of delivery shall not be paid. Violation of this subdivision
shall be grounds for expulsion from the Medi-Cal program.
(c) The department may implement a 180-day moratorium on the
enrollment of new providers or new business addresses for
incontinence medical supply dealers when the department determines
this action is necessary to safeguard public funds or to maintain the
fiscal integrity of the program.

14125.9. Nothing in this article shall be interpreted as limiting
or interfering in any way with the department's authority to contract
for the provision of incontinence medical supplies pursuant to
subdivision (b) of Section 14105.3.