2005 California Welfare and Institutions Code Sections 14043-14045 Participation

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
(e) 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 any state or local agency
in this state or any other 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 any state or local agency in this state or any other 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 any individual, partnership, group,
association, corporation, institution, or entity, and the officers,
directors, owners, managing employees, or agents thereof, that
applies 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 for which a separate provider number is issued to
the applicant or provider for the provision of similar services or,
the applicant 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 or 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 other amount resulting
from an audit or examination, for a penalty assessment, or for any
other 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 an additional location to that
currently used to provide services, goods, supplies, or merchandise
to Medi-Cal beneficiaries, and for which the provider was issued a
provider number.
   (l) "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.
   (m) "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.
   (n) "Provider" means any individual, partnership, group,
association, corporation, institution, or entity, and the officers,
directors, owners, managing employees, or agents of any 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.
   (o) "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 provider number granted upon 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 all provider numbers
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 Medi-Cal provider
number or numbers 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.
14043.26.  (a) (1) On and after January 1, 2004, an applicant that
is not currently 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 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) 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.
   (c) (1) If the applicant 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 90 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 for Accreditation of Healthcare Organizations 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; the Knox-Keene Act) 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 for Accreditation of Healthcare Organizations or
American Osteopathic Association accredited general acute care
hospital.
   (D) Not have any adverse entries in the Healthcare Integrity and
Protection Databank.
   (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.
   (d) 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 (c), 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 any 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.
   (e) (1) If the application package that was noticed as incomplete
under subdivision (d) is resubmitted with all requested information
and documentation, and received by the department within 35 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 (d).
   (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 (d) is not resubmitted with all
requested information and documentation and received by the
department within 35 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 all provider numbers used by the provider
to obtain reimbursement from the Medi-Cal program.
   (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 may 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.
   (f) (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 inspections, 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 all provider numbers used by the provider
to obtain reimbursement from the Medi-Cal program.
   (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 may not
reapply for three years.
   (g) If provisional provider status or preferred provisional
provider status is granted pursuant to this section, a separate
provider number shall be issued for each location for which an
application package has been approved. This separate provider number
shall be used exclusively for the location for which it is issued,
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.
   (h) 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) may continue to submit claims under an existing
provider number for services rendered at the new location until the
application package is approved or denied under this section, and
shall not be subject, during that period, to deactivation of the
provider's provider number, or be subject to any delay or nonpayment
of claims as a result of the use of the existing provider number 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.
   (i) 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.
   (j) (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.
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 number 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 all
provider numbers used by the provider at any location 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 provider numbers issued
for 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 provider numbers, the
provider does not possess any valid provider numbers.
   (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
location for which the provider number was issued, 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 may 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 from the date the application package is denied
or the provisional provider status is terminated, or from the date
of the final decision following an appeal from that denial or
termination, except as provided otherwise in paragraph (2) of
subdivision (e), or paragraph (2) of subdivision (f), of Section
14043.26 and as set forth in this section.
   (2) If the application is denied under paragraph (2) of
subdivision (e) of Section 14043.26 because the applicant failed to
resubmit an incomplete application package or is denied under
paragraph (2) of subdivision (f) of Section 14043.26 because the
applicant failed to remediate discrepancies, the applicant may
resubmit an application in accordance with paragraph (2) of
subdivision (d) or paragraph (2) of subdivision (f), 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 may 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 10 years from
the date the application package is denied or the provisional
provider status or preferred provisional provider status is
terminated or from the date of the final decision following an appeal
from that denial or termination.
   (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 (d) of Section
14043.26, or with respect to a provider described in subparagraph (B)
of paragraph (2) of subdivision (e), or subparagraph (B) of
paragraph (2) of subdivision (f), 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 existing
provider numbers assigned to 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 provider numbers 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 provider numbers 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 (e) 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 all provider numbers 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 Medi-Cal
provider number or numbers, 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.  Notwithstanding the adoption of the Standardized National
Application form and the National Provider Identifier by the federal
government, a provider may be issued a unique identification number
or numbers, as prescribed by the director.
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) An applicant for licensure and certification that has been
designated by a city and county, which, pursuant to a court order, is
discharging persons currently residing in a city and county nursing
facility to community housing, provided that all participants
enrolled in the applicant's center are former residents of the city
and county nursing facility.
   (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:
   (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 the moratorium period, the
department may make exceptions to the moratorium for new adult day
health care centers that are located in underserved areas if the
center's application was on file with the department on or before the
effective date of the act adding this section. In order to apply for
this exemption, an applicant or licensee must meet all of the
following criteria:
   (1) The applicant has control of a facility, either by ownership
or lease agreement, that will house the adult day health care center,
has provided to the department all necessary documents and fees, and
has completed and submitted all required fingerprinting forms to the
department.
   (2) The physical location of the applicant's or licensee's adult
day health care center is 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.
   (e) During the period of the moratorium, a licensee or applicant
that meets the criteria for an exemption as defined in subdivision
(d) may submit a written request for an exemption to the director.
   (f) If the director determines that a new adult day health care
licensee or applicant meets the exemption criteria, the director may
certify the licensee or applicant, once licensed, for participation
in the Medi-Cal program.
   (g) The director may extend this moratorium, if necessary, to
coincide with the implementation date of the adult day health care
waiver.
   (h) The authority granted in this section shall not be interpreted
as a limitation on the authority granted to the department in any
other section.
14043.47.  (a) A provider doing business as a sole proprietorship,
partnership, or professional corporation under Part 4 (commencing
with Section 13400) of Division 3 of the Corporations Code or a
rendering physician provider in a group who utilizes nonphysician
medical practitioners to provide services, goods, supplies, or
merchandise to Medi-Cal  beneficiaries shall meet the specific
supervisory requirements applicable to such providers, pursuant to
the Business and Professions Code or other state or federal law.
   (b) A provider doing business as a sole proprietorship,
partnership, or professional corporation under Part 4 (commencing
with Section 13400) of Division 3 of the Corporations Code or a
rendering physician provider in a group who fails to comply with the
requirements of this section is subject to temporary suspension from
the Medi-Cal program and deactivation of all provider numbers.
   (c) A physician doing business as a sole proprietorship,
partnership, or professional corporation under Part 4 (commencing
with Section 13400) of Division 3 of the Corporations Code or a
rendering physician provider in a group may not be enrolled at more
than three business addresses unless there is a ratio of at least one
physician providing supervision for every three locations.
   (d) A physician doing business as a sole proprietorship,
partnership, or professional medical corporation under Part 4
(commencing with Section 13400) of Division 3 of the Corporations
Code or a rendering physician provider in a group who fails to comply
with the requirements of this section is subject to temporary
suspension from the Medi-Cal program and deactivation of all of his
or her provider numbers.
14043.5.  Subject to Article 4 (commencing with Section 19130) of
Chapter 5 of Division 5 of Title 2 of the Government Code, the
department may enter into contracts to secure consultant services or
information technology including, but not limited to, software, data,
or analytical techniques or methodologies for the purpose of fraud
or abuse detection and prevention.  Contracts under this section
shall be exempt from the Public Contract Code.
14043.55.  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.
14043.6.  The department shall automatically suspend, as a provider
in the Medi-Cal program, any individual who, or any entity that, has
a license, certificate, or other approval to provide health care,
which is revoked or suspended by a federal, California, or another
state's licensing, certification, or approval authority, has
otherwise lost that license, certificate, or approval, or has
surrendered that license, certificate, or approval while a
disciplinary hearing on that license, certificate, or approval was
pending.  The automatic suspension shall be effective on the date
that the license, certificate, or approval was revoked, lost, or
surrendered.
14043.61.  (a) A provider shall be subject to suspension if claims
for payment are submitted under any provider number used by the
provider to obtain reimbursement from the Medi-Cal program for the
services, goods, supplies, or merchandise provided, directly or
indirectly, to a Medi-Cal beneficiary, by an individual or entity
that is suspended, excluded, or otherwise ineligible because of a
sanction to receive, directly or indirectly, reimbursement from the
Medi-Cal program and the individual or entity is listed on either the
Suspended and Ineligible Provider List, published by the department,
to identify suspended and otherwise ineligible providers, or any
list published by the federal Office of Inspector General regarding
the suspension or exclusion of individuals or entities from the
federal Medicare and medicaid programs, to identify suspended,
excluded, or otherwise ineligible providers.
   (b) Notwithstanding Section 100171 of the Health and Safety Code,
the imposition of the sanction provided for in subdivision (a) shall
be appealable in accordance with Section 14043.65.
14043.62.  (a) The department shall deactivate, immediately and
without prior notice, the provider numbers used by a provider to
obtain reimbursement from the Medi-Cal program when warrants or
documents mailed to a provider's mailing address or its pay to
address, if any, or its service or business address, are returned by
the United States Postal Service as not deliverable or when a
provider has not submitted a claim for reimbursement from the
Medi-Cal program for one year.  Prior to taking this action the
department shall use due diligence in attempting to contact the
provider at its last known telephone number and ascertain if the
return by the United States Postal Service is by mistake or shall use
due diligence in attempting to contact the provider by telephone or
in writing to ascertain whether the provider wishes to continue to
participate in the Medi-Cal program.  If deactivation pursuant to
this section occurs, the provider shall meet the requirements for
reapplication as specified in this article or the regulations adopted
thereunder.
   (b) For purposes of this section:
   (1) "Mailing address" means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive general program
correspondence.
   (2) "Pay to address" means the address that the provider has
identified to the department in its application for enrollment as the
address at which it wishes to receive warrants.
   (3) "Service or business address" means the address that the
provider has identified to the department in its application for
enrollment as the address at which the provider will provide services
to program beneficiaries.
14043.65.  (a) Notwithstanding any other provision of law, any
applicant whose application for enrollment as a provider or whose
certification is denied; or any provider who is denied continued
enrollment or certification, or denied enrollment for a new location,
who has been temporarily suspended, who has had payments withheld,
who has had one or more provider numbers used to obtain reimbursement
from the Medi-Cal program deactivated, or whose provisional provider
status or preferred provisional provider status has been terminated
pursuant to this article or Section 14107.11, or Section 100185.5 of
the Health and Safety Code, or who has had a civil penalty imposed
pursuant to subdivision (a) of Section 14123.25; or any billing
agent, as defined in Section 14040, when the billing agent's
registration has been denied pursuant to subdivision (e) of Section
14040.5, may appeal this action by submitting a written appeal,
including any supporting evidence, to the director or the director's
designee.  Where the appeal is of a withholding of payment pursuant
to Section 14107.11, the appeal to the director or the director's
designee shall be limited to the issue of the reliability of the
evidence supporting the withhold and shall not encompass fraud or
abuse.  The appeal procedure shall not include a formal
administrative hearing under the Administrative Procedure Act and
shall not result in reactivation of any deactivated provider numbers
during appeal.  An applicant, provider, or billing agent that files
an appeal pursuant to this section shall submit the written appeal
along with all pertinent documents and all other relevant evidence to
the director or to the director's designee within 60 days of the
date of notification of the department's action.  The director or the
director's designee shall review all of the relevant materials
submitted and shall issue a decision within 90 days of the receipt of
the appeal.  The decision may provide that the action taken should
be upheld, continued, or reversed, in whole or in part.  The decision
of the director or the director's designee shall be final.  Any
further appeal shall be required to be filed in accordance with
Section 1085 of the Code of Civil Procedure.
   (b) No applicant whose application for enrollment as a provider
has been denied pursuant to Section 14043.2, 14043.36, or 14043.4 may
reapply for a period of three years from the date the application is
denied.  If the provider has appealed the denial, the three-year
period shall commence upon the date of final action by the director
or the director's designee.
14043.7.  (a) The department may make unannounced visits to any
applicant or to any provider for the purpose of determining whether
enrollment, continued enrollment, or certification is warranted, or
as necessary for the administration of the Medi-Cal program.  At the
time of the visit, the applicant or provider shall be required to
demonstrate an established place of business appropriate and adequate
for the services billed or claimed to the Medi-Cal program, as
relevant to his or her scope of practice, as indicated by, but not
limited to, the following:
   (1) Being open and available to the general public.
   (2) Having regularly established and posted business hours.
   (3) Having adequate supplies in stock on the premises.
   (4) Meeting all local laws and ordinances regarding business
licensing and operations.
   (5) Having the necessary equipment and facilities to carry out
day-to-day business for his or her practice.
   (b) An unannounced visit pursuant to subdivision (a) shall be
prohibited with respect to clinics licensed under Section 1204 of the
Health and Safety Code, clinics exempt from licensure under Section
1206 of the Health and Safety Code, health facilities licensed under
Chapter 2 (commencing with Section 1250) of Division 2 of the Health
and Safety Code, and 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, unless the department has reason to believe that the
provider will defraud or abuse the Medi-Cal program or lacks the
organizational or administrative capacity to provide services under
the program.
   (c) Failure to remediate significant discrepancies in information
provided to the department by the provider or significant
discrepancies that are discovered as a result of an announced or
unannounced visit to a provider, for purposes of enrollment,
continued enrollment, or certification pursuant to subdivision (a)
shall make the provider subject to temporary suspension from the
Medi-Cal program, which shall include temporary deactivation of all
provider numbers used by the provider to obtain reimbursement from
the Medi-Cal program.  The director shall notify in writing the
provider of the temporary suspension and deactivation of provider
numbers, 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 in this
paragraph shall be in accordance with Section 14043.65.
14043.75.  (a) The director may, in consultation with interested
parties, by regulation, adopt, readopt, repeal, or amend additional
measures to prevent or curtail fraud and abuse.  Regulations adopted,
readopted, repealed, or amended pursuant to this section shall be
deemed emergency regulations in accordance with the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code).  These emergency
regulations shall be deemed necessary for the immediate preservation
of the public peace, health and safety, or general welfare.
Emergency regulations adopted, amended, or repealed pursuant to this
section shall be exempt from review by the Office of Administrative
Law.  The emergency regulations authorized by this section shall be
submitted to the Office of Administrative Law for filing with the
Secretary of State and publication in the California Code of
Regulations.
   (b) Notwithstanding any other provision of law, the director 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 Sections
14043.15, 14043.26, 14043.27, 14043.28, 14043.29, and 14043.341 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 those
provisions described in this subdivision, including all of the
following:
   (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.
14044.  (a) The department may limit, for 18 months or less, the
American Medical Association's Current Procedural Terminology Fourth
Edition (CPT-4) codes, the National Drug Codes (NDC), the Healthcare
Common Procedure Coding System (HCPCS) codes, or codes established
under Title II of the Health Insurance Portability & Accountability
Act of 1996 (42 U.S.C. Sec. 1320d et seq.) for which any provider may
bill, or for which reimbursement to any person or entity may be made
by, the Medi-Cal program or other health care programs administered
by the department if either of the following conditions exist:
   (1) The department determines, by audit or other investigation,
that excessive services or billings, or abuse, has occurred, which
may include the department's discovery or determination that a claim
was submitted for reimbursement under the Medi-Cal program for a
nerve conduction test, electromyography, or procedures, tests,
examinations, or other medical services that the department has
specified requires a certain residency or board certification, but
the records did not contain, or the person or entity submitting the
claim for reimbursement did not have, the certificate or diploma
required by Section 14170.11.
   (2) The Medical Board of California or other licensing authority
or a court of competent jurisdiction limits a licensee's practice of
medicine or the rendering of health care, and the limitation
precludes the licensee from performing services that could otherwise
be reimbursed by the Medi-Cal program or other health care programs
administered by the department.
   (b) The department may impose a limitation pursuant to subdivision
(a) for one or more codes or any combination of codes after giving
the provider notice of the proposed limitation and, if applicable,
the opportunity to appeal pursuant to subdivision (c).
   (c) (1) A provider who receives notice of a proposed limitation
based on paragraph (1) of subdivision (a) shall have 45 days from the
date of notice to appeal the limitation by providing to the
department reliable evidence that excessive services or billings, or
abuse, did not occur.
   (2) The department shall review the evidence and issue a decision
within 45 days of receipt of the evidence.
   (d) If a limitation is imposed pursuant to paragraph (1) of
subdivision (a), it shall take effect on the 46th day after notice of
the proposed limitation was given or, if the limitation is timely
appealed, 15 days after the department gives the provider notice of
its decision to impose the limitation.  If a limitation is imposed
pursuant to paragraph (2) of subdivision (a), it shall take effect 15
days after notice of the proposed limitation was given.
   (e) If the department's limitation could interfere with the
provider's or other prescriber's ability to provide health care
services to a beneficiary, the burden to transfer a patient's care to
another qualified person shall remain the responsibility of the
licensee.
   (f) For purposes of this section, the following definitions apply:
   (1) "Abuse" has the same meaning as defined in Section 14043.1.
   (2) "Administered by the department" means administered by the
department or its agents or contractors.
   (3) "Excessive services or billings" means an amount that is
substantially in excess of what the department reasonably expects
from the provider, based on data regarding the provider or other
providers in the health care community who provide substantially
similar services to a substantially similar patient population, that
is available to the department from any source, including the
department.
   (4) "Licensee" means a person licensed under Division 2
(commencing with Section 500) of the Business and Professions Code.
   (5) "Other prescriber" means that person who is not the primary or
attending physician for a patient who is a beneficiary of the
Medi-Cal program or other health care program administered by the
department, and that person causes the department, or its agents or
contractors, to provide reimbursement for a drug, device, medical
service, or supply to the beneficiary.
   (6) "Provider" has the same meaning as defined in Section 14043.1.
14045.  (a) A provider may not submit a reimbursement request to the
Medi-Cal program containing a beneficiary's social security number
in order to receive payment if the department has issued that
beneficiary a Medi-Cal beneficiary identification card containing a
beneficiary number with the issuance date included in that number.
   (b) This section shall not apply to services provided by the
following provider types or to the following types of services:
   (1) A hospital licensed pursuant to Chapter 2 (commencing with
Section 1250) of Division 2 of the Health and Safety Code.
   (2) A long-term health care facility, as defined in Section 1418
of the Health and Safety Code.
   (3) A primary care clinic that is licensed pursuant to subdivision
(a) of Section 1204 of the Health and Safety Code.
   (4) Emergency medical transportation services.