14170. (a) (1) Amounts paid for services provided to Medi-Cal
beneficiaries shall be audited by the department in the manner and
form prescribed by the department. The department shall maintain
adequate controls to ensure responsibility and accountability for the
expenditure of federal and state funds. Cost reports and other data
submitted by providers to a state agency for the purpose of
determining reasonable costs for services or establishing rates of
payment shall be considered true and correct unless audited or
reviewed by the department within 18 months after July 1, 1969, the
close of the period covered by the report, or after the date of
submission of the original or amended report by the provider,
whichever is later. Moreover the cost reports and other data for cost
reporting periods beginning on January 1, 1972, and thereafter shall
be considered true and correct unless audited or reviewed within
three years after the close of the period covered by the report, or
after the date of submission of the original or amended report by the
provider, whichever is later.
(2) (A) Nothing in this section shall be construed to limit the
correction of cost reports or rates of payment when inaccuracies are
determined to be the result of intent to defraud, or when a delay in
the completion of an audit is the result of willful acts by the
provider or inability to reach agreement on the terms of final
settlement.
(B) Nothing in this section shall be construed to preclude the
department from further review of cost reports and other data for
cost reporting periods beginning on January 1, 1998, after the
three-year period contained in paragraph (1) of subdivision (a),
where after the three-year period the department discovers
information not customarily contained in these cost reports and other
data for the fiscal periods in question that indicates the provider
may have engaged in practices that have resulted in
overreimbursement.
(3) Notwithstanding any other provision of law, nursing facilities
and all categories of intermediate care facilities for the
developmentally disabled which have received and are receiving funds
for salary increases pursuant to Sections 14110.6 and 14110.7 shall
maintain payroll and personnel records for examination by auditors
from the department and the Labor Commissioner beginning March 1985
until the records have been audited, or until December 31, 1992,
whichever occurs first.
(b) Notwithstanding any other provision of law, costs reported for
reimbursement purposes relative to Medi-Cal beneficiaries in nursing
facilities that are distinct parts of acute care hospitals shall be
audited by the department at least annually. The audits may be
performed on a sample basis and, when the sample is statistically
reliable, as determined by the department, may be used for
ratesetting purposes.
14170.1. (a) Prior to the issuance to a provider of pharmaceutical
services of any demand for payment pursuant to an audit or
examination conducted under Sections 10722 and 14170, the amount of
any underpayment to the provider for validly submitted claims or for
valid claims which have inadvertently not been submitted and which
arose during the audit period shall be determined and credited toward
the amount of any overpayment due to the department. This section
shall apply to all audits and examinations conducted under Sections
10722 and 14170 relative to amounts paid during the audit period for
services provided to Medi-Cal beneficiaries. No audit may be reopened
to provide for underpayments in which a final decision has been
reached pursuant to Section 14171 or in which a certificate has been
filed pursuant to Section 14172.
(b) When a provider of pharmaceutical services asserts that a
claim has been underpaid for purposes of receiving a credit against
overpayments, as authorized by this section, the provider shall
submit to the department information and documentation sufficient to
resolve any dispute as to whether such claim was in fact underpaid.
(c) For purposes of this section, the term "underpayments" shall
include errors made by the pharmacist and errors made by the fiscal
intermediary in determining payments for claims submitted within the
billing time limits specified in Section 14115.
14170.5. (a) No provider's claims for reimbursement under this
chapter shall be subject to any special claims review procedure for a
period in excess of nine months unless the department shows cause
why the provider's claims for reimbursement should continue to be
subject to special claims review procedures.
(b) The department shall provide notice to a provider of its
reasons for determining that the provider shall be subject to
extended special claims review.
14170.8. (a) Notwithstanding any other provision of law, every
primary supplier of pharmaceuticals, medical equipment, or supplies
shall maintain accounting records to demonstrate the manufacture,
assembly, purchase, or acquisition and subsequent sale, of any
pharmaceuticals, or medical equipment, or supplies to providers, as
defined in Section 14043.1. Accounting records shall include, but not
be limited to, inventory records, general ledgers, financial
statements, purchase and sales journals and invoices, prescription
records, bills of lading, and delivery records. For purposes of this
section the term "primary suppliers" shall mean any manufacturer,
principal labeler, assembler, wholesaler, or retailer.
(b) Accounting records maintained pursuant to subdivision (a)
shall be subject to audit or examination by the department or its
agents. This audit or examination may include, but is not limited to,
verification of what was claimed by the provider. These accounting
records shall be maintained for three years from the date of sale or
the date of service.
(c) This section shall not apply to any clinic licensed pursuant
to subdivision (a) of Section 1204 of the Health and Safety Code or
to any manufacturer of prescription drugs registered with the federal
Food and Drug Administration in accordance with Section 510 of the
Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 360).
14170.10. (a) No provider shall submit a claim to the department or
its fiscal intermediaries for the dispensing or furnishing of a
controlled drug, a dangerous drug, or a dangerous device, 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 for the
performance of a clinical laboratory test or examination, unless the
provider's records contain an order authorized by Section 4019 of the
Business and Professions Code, or a prescription, including an
electronic transmission prescription, signed by the person lawfully
authorized by his or her practice act to prescribe or order the
dispensing or furnishing of that drug or device to, or for the
performance of a clinical laboratory test or examination that meets
the federal CLIA standard for test requisition as set forth in
Section 493.1241 of Title 42 of the Code of Federal Regulations upon,
a Medi-Cal beneficiary, except the following:
(1) Providers who are physicians, clinics, hospitals, or other
nonpharmacists and who are legally authorized to dispense or furnish
drugs or devices directly to their patients, may in lieu of the
requirements of this subdivision include a notation in their patients'
medical charts reflecting they have dispensed or furnished the drug
or device directly to the patient as authorized by the Business and
Professions Code.
(2) Anatomical pathology examinations may be ordered by physicians
by notation within the patients medical record during inpatient or
outpatient surgery provided that these examinations comply with
federal CLIA requirements. Any claims made contrary to this section
shall be subject to recovery as overpayments.
(3) If obtaining a biological specimen is required in order that a
test or examination occurs on a periodic basis within an established
provider-patient relationship or the furnishing or dispensing of
drugs or devices occurs on a periodic basis within an established
provider-patient relationship, the provider shall only be required to
retain the order or requisition upon obtaining the biological
specimen necessary for the initial test or examination or initial
furnishing or dispensing of the drug or device, so long as an
appropriate record of each test or examination, or furnishing or
dispensing, is entered in the patient's chart.
(b) For purposes of this section:
(1) "Signed" shall include a signature that meets the conditions
of the Electronic Signature in Global and National Commerce Act (15
U.S.C. Sec. 7001).
(2) "Controlled substance" shall mean any substance listed in
Chapter 2 (commencing with Section 11053) of Division 10 of the
Health and Safety Code.
(3) "Dangerous drug" or "dangerous device" has the same meaning as
in Section 4022 of the Business and Professions Code.
(4) "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.
(5) "Prescription" has the same meaning as in Section 4040 of the
Business and Professions Code.
(6) "Electronic transmission prescription" includes both image and
data prescriptions.
(7) "Electronic image transmission prescription" means any
prescription order for which a facsimile of the order is received by
a pharmacy or other appropriate provider from a licensed prescriber
and that is reduced to writing and processed by the pharmacy or other
appropriate provider in accordance with applicable provisions of the
Business and Professions Code, including Section 4070.
(8) "Electronic data transmission prescription" means any
prescription order, other than an electronic image transmission
prescription, that is electronically transmitted from a licensed
prescriber to a pharmacy or other appropriate provider and which is
reduced to writing and processed by the pharmacy or other appropriate
provider in accordance with applicable provisions of the Business
and Professions Code, including Section 4070. The use of commonly
used abbreviations shall not invalidate an otherwise valid
prescription.
(9) "Clinical laboratory test or examination" means the detection,
identification, measurement, evaluation, correlation, monitoring,
and reporting of any particular analyte, entity, or substance within
a biological specimen for the purpose of obtaining scientific data
that may be used as an aid to ascertain the presence, progress, and
source of a disease or physiological condition in a human being, or
used as an aid in the prevention, prognosis, monitoring, or treatment
of a physiological or pathological condition in a human being, or
for the performance of nondiagnostic tests for assessing the health
of an individual.
(c) 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 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 the provisions of this section, 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 on the effective
date of the action or change.
14170.11. (a) No person or entity shall submit a claim to the
department or its fiscal intermediaries for reimbursement under the
Medi-Cal program for a nerve conduction test or for electromyography
unless the person or entity's records contains a copy, for each
person performing each test or electromyography, for which a claim is
submitted, a certificate or diploma of satisfactory completion of a
neurology or physical medicine and rehabilitation residency program
accredited by the Accreditation Council of Graduate Medical Education
(ACGME).
(b) The department may identify by publication, in provider
bulletins or similar instructions, requirements that reimbursement
from the Medi-Cal program shall only be made for the provision of
certain procedures, tests, examinations, or other medical services
provided by persons who possess a particular level of education,
experience, and training as evidenced by satisfactory completion of
medical residency programs or board certification in a particular
field and that those submitting claims shall maintain a copy of this
certificate or diploma.
(c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific, this section
by means of all county letters, provider bulletins, or similar
instructions. Thereafter, the department may adopt regulations in
accordance with the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
14171. (a) The director shall establish administrative appeal
processes to review grievances or complaints arising from the
findings of an audit or examination made pursuant to Sections 10722
and 14170 and for final settlements, including, in the case of
hospitals, the application of Sections 51536, 51537, and 51539 of
Title 22 of the California Code of Regulations. All these processes
shall be established by regulation, pursuant to, and consistent with,
Section 100171 of the Health and Safety Code.
(b) Different administrative appeal processes may be established
by the director for grievances or complaints arising from the
determinations of a tentative or final settlement based on audit or
examination findings made by or on behalf of the department pursuant
to Sections 10722 and 14170. However, consistent with existing
practice, no administrative appeal shall be available for tentative
settlement of cost reports.
(c) The administrative appeal process established by the director
for tentative settlements, including, in the case of hospitals, the
application of Sections 51536, 51537, and 51539 of Title 22 of the
California Code of Regulations shall be an informal process which,
however, guarantees a provider the right to present any grievance or
complaint to the department in writing. Any subsequent hearings shall
be conducted in an informal manner and shall be held at the
discretion of the department.
(d) The time limitations in subdivisions (e) and (f) for the
impartial hearing and the final decisions are mandatory. If the
department fails to conduct the hearing or to adopt a final decision
thereon within the time limitations provided in subdivisions (e) and
(f), the amount of any overpayment which is ultimately determined by
the department to be due shall be reduced by 10 percent for each
30-day period, or portion thereof, that the hearing or the decision,
or both, are delayed beyond the time limitations provided in
subdivisions (e) and (f). However, the time period shall be extended
by either of the following:
(1) Delay caused by a provider.
(2) Extensions of time granted a provider at its sole request or
at the joint request of the provider and the department.
(e) (1) The administrative appeal process established by the
director shall commence with an informal conference with the
provider, a representative of the department, and the administrative
law judge. The informal conference shall be conducted no later than
90 days after the filing of a timely and specific statement of
disputed issues by the provider. The administrative law judge, when
appropriate, may assign the administrative appeal to an informal
level of review where efforts could be made to resolve facts and
issues in dispute in a fair and equitable manner, subject to the
requirements of state and federal law. The review conducted at this
informal level shall be completed no later than 180 days after the
filing of a timely and specific statement of disputed issues by the
provider.
(2) Nothing in this subdivision shall prohibit the provider from
presenting any unresolved grievances or complaints at an impartial
hearing pursuant to subdivision (a). The impartial hearing shall be
conducted no later than 300 days after the filing of a timely and
specific statement of disputed issues by the provider.
(3) (A) Subject to subdivision (f), a final decision in a
noninstitutional provider appeal shall be adopted within 180 days
after the closure of the record of the impartial hearing, and a final
decision in an institutional provider appeal shall be adopted within
300 days after the closure of the record of the impartial hearing.
(B) The department shall mail a copy of the adopted decision to
all parties within 30 days of the date of adoption of the decision.
(f) In the event the director intends to modify a proposed
decision, on or before the 180th day following the closure of the
record of the hearing for noninstitutional providers or the 300th day
following the closure of the record of the hearing for institutional
providers, the director shall provide written notice of his or her
intention to the parties and shall afford the parties an opportunity
to present written argument. Following this notice, on or before the
240th day following the closure of the record of the hearing for
noninstitutional providers or the 420th day following closure of the
record of the hearing for institutional providers, or within that
additional time period as is granted pursuant to the sole request of
a provider or at the joint request of the provider and the
department, the director shall issue a final decision.
(g) In the event recovery of a disallowed payment has been made by
the department, a provider who prevails in an appeal of a disallowed
payment shall be entitled to interest at the rate equal to the
monthly average received on investments in the Surplus Money
Investment Fund, commencing on the date the appeal is formally
accepted by the department or the date payment is received by the
department, whichever is later.
(h) Except as provided in subdivision (i), commencing 60 days
after issuance of the first statement of account status or demand for
repayment resulting from an audit or examination made pursuant to
Sections 10722 and 14170, interest at the rate equal to the monthly
average received on investments in the Surplus Money Investment Fund
during the month the first statement of account status or demand for
repayment was issued shall be assessed against any unrecovered
overpayment due to the department.
(i) (1) Commencing on the day following the last day of the period
covered by an audit or examination made pursuant to Sections 10722
and 14170, interest at the rate established under Section 19269 of
the Revenue and Taxation Code which is in effect on the date of the
commencement of that interest shall be assessed against any
unrecovered overpayment due to the department by providers of durable
medical equipment or incontinence supplies.
(2) Interest which accrues under this subdivision for recoupment
of an overpayment based on the lack of medical necessity for a
previously approved claim shall commence to accrue on the date of
written demand by the department.
(j) The final decision of the director shall be reviewable in
accordance with Section 1094.5 of the Code of Civil Procedure within
six months of the issuance of the director's final decision.
14171.5. Any institutional provider of health care services that
obtained reimbursement under this chapter to which it is not entitled
shall be subject to the following interest charges or penalties:
(a) When it is established upon audit that the provider has
claimed payments under this chapter to which it is not entitled, the
provider shall pay, in addition to the amount improperly received,
interest at the rate specified by subdivision (h) of Section 14171.
(b) When it is established upon audit that the provider claimed
payments related to services or costs that the department had
previously notified the provider in an audit report that the costs or
services were not reimbursable, the provider shall pay in addition
to the amount improperly claimed, a penalty of 10 percent of the
amount improperly claimed after this notice, plus the cost of the
audit. In addition, interest shall be assessed at the rate specified
in subdivision (h) of Section 14171. Providers who wish to preserve
appeal rights or to challenge the department's positions regarding
appeal issues, may claim the cost or services and not be reimbursed
therefor if they are identified and presented separately on the cost
report.
(c) When it is established that the provider fraudulently claimed
and received payments under this chapter, the provider shall pay a
penalty of 25 percent of the amount improperly claimed, plus the cost
of the audit, in addition to the amount thereof. In addition,
interest will be assessed at the rate specified by subdivision (h) of
Section 14171. A fraudulent claim is a claim upon which the provider
has been convicted of fraud upon the program. Nothing in this
section shall prevent the imposition of any other civil or criminal
penalties to which the provider may be liable.
(d) Appeals to action taken in subdivisions (a), (b), and (c) of
Section 14171.5 above are subject to the administrative appeals
process provided by Section 14171.
(e) Penalties paid by providers under subdivisions (a), (b), and
(c) of Section 14171.5 are not reimbursable by the program.
(f) As used in this section, "the cost of the audit" includes
actual hourly wages, travel, and incidental expenses at rates
allowable by California Victim Compensation and Government Claims
Board rules, and applicable overhead costs.
14171.6. (a) (1) Any provider, as defined in paragraph (3), that
obtains reimbursement under this chapter to which it is not entitled
shall be subject to interest charges or penalties as specified in
this section.
(2) When it is established upon audit that the provider has not
received reimbursement to which the provider is entitled, the
department shall pay the provider interest assessed at the rate, and
in the manner, specified in subdivision (g) of Section 14171.
(3) For purposes of this section, "provider" means any provider,
as defined in Section 14043.1.
(b) When it is established upon audit that the provider has
claimed payments under this chapter to which it is not entitled, the
provider shall pay, in addition to the amount improperly received,
interest at the rate specified by subdivision (h) of Section 14171.
(c) (1) When it is established upon audit that the provider
claimed payments related to services or costs that the department had
previously notified the provider in an audit report that the costs
or services were not reimbursable, the provider shall pay, in
addition to the amount improperly claimed, a penalty of 10 percent of
the amount improperly claimed after receipt of the notice, plus the
cost of the audit.
(2) In addition to the penalty and costs specified by paragraph
(1), interest shall be assessed at the rate specified in subdivision
(h) of Section 14171.
(3) Providers that wish to preserve appeal rights or to challenge
the department's positions regarding appeal issues may claim the
costs or services and not be reimbursed therefor if they are
identified and presented separately on the cost report.
(d) (1) When it is established that the provider fraudulently
claimed and received payments under this chapter, the provider shall
pay, in addition to that portion of the claim that was improperly
claimed, a penalty of 300 percent of the amount improperly claimed,
plus the cost of the audit.
(2) In addition to the penalty and costs specified by paragraph
(1), interest shall be assessed at the rate specified by subdivision
(h) of Section 14171.
(3) For purposes of this subdivision, a fraudulent claim is a
claim upon which the provider has been convicted of fraud upon the
Medi-Cal program.
(e) Nothing in this section shall prevent the imposition of any
other civil or criminal penalties to which the provider may be
liable.
(f) Any appeal to any action taken pursuant to subdivision (b),
(c), or (d) is subject to the administrative appeals process provided
by Section 14171.
(g) As used in this section, "cost of the audit" includes actual
hourly wages, travel, and incidental expenses at rates allowable by
rules adopted by the California Victim Compensation and Government
Claims Board and applicable overhead costs that are incurred by
employees of the state in administering this chapter with respect to
the performance of audits.
(h) This section shall not apply to any clinic licensed pursuant
to subdivision (a) of 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, or to
any provider that is operated by a city, county, or school district.
14172. (a) Except as provided in subdivision (b), if any amount is
due and payable and unpaid as the result of an overpayment to a
provider of health care services, durable medical equipment, or
incontinence supplies identified through an audit or examination
conducted by or on behalf of the director, and the findings of the
audit or examination are completed and no appeal is taken or the
director has issued a final decision on the appeal pursuant to
Section 14171, and 90 days have elapsed from the completion of that
audit or examination or issuance of that final decision on appeal,
the director may, not later than three years after the payment became
due and owing, file in the office of the Clerk of the Superior Court
of Sacramento County, and with the clerk of the superior court of
the county in which the provider has its principal place of business,
a certificate containing the following:
(1) Interest, as prescribed by Section 14171.
(2) A statement that the director has complied with this article
prior to the filing of the certificate.
(3) A request that judgment be entered against the provider in the
amount set forth in the certificate.
The clerk immediately upon the filing of the certificate shall
enter a judgment for the State of California against the provider in
the amount set forth in the certificate. The judgment may be filed by
the clerk in a looseleaf book entitled "Health Care Overpayment
Recovery Judgments."
(b) If the provider seeks judicial review of the final decision of
the director pursuant to subdivision (k) of Section 14171 and notice
of that action is properly served on the director within 90 days of
the issuance of the final decision of the director, the director
shall not file any certificate as provided in subdivision (a).
If the provider does not seek judicial review of the final
decision of the director pursuant to subdivision (k) of Section 14171
and does not properly serve notice within 90 days from the date of
the final decision of the director, the director may file the
certificate provided in subdivision (a). If the provider seeks
judicial review of the final decision of the director more than 90
days from the date of the decision in accordance with subdivision (k)
of Section 14171, the director shall within 10 days after receiving
notice of that action release any lien imposed pursuant to this
article and any judgment entered is for all purposes null and void.
14172.5. (a) No later than 60 days after the completion of an audit
or examination pursuant to Sections 10722 and 14170, the department
shall issue the first statement of account status or demand for
repayment.
(b) (1) Notwithstanding the provisions of Section 14172 or any
other law, when it is established that an overpayment has been made
to a provider or a civil money penalty assessed pursuant to Section
14123.2, 14123.25, 14171.5, or 14171.6 is due from a provider, the
department shall not begin liquidation of the overpayment until 60
days after issuance of the first statement of accountability or
demand for repayment after issuance of the audit or examination
report establishing the overpayment or the document establishing the
penalty. The department shall pursue liquidation of the overpayment
or penalty upon expiration of the 60-day period. If the department
finds, upon appeal, that no overpayment was made to, or no penalty is
due from, the provider, the department shall repay the amount
collected, together with the payment of interest thereon, from the
date occurring 60 days after issuance of the first statement of
accountability or demand for repayment after issuance of the audit or
examination report alleging the overpayment or the document
establishing the penalty.
(2) This subdivision shall not be construed so as to affect the
department's authority under other provisions of law for liquidation
of overpayments to providers.
(c) Liquidation of the overpayment or penalty may be by any of the
following:
(1) Lump-sum payment by the provider.
(2) Offset against current payments due to the provider.
(3) A repayment agreement executed between the provider and the
department.
(4) Any other method of recovery available to and deemed
appropriate by the director.
(d) An offset against current payments shall continue until one of
the following occurs:
(1) The overpayment or penalty is recovered.
(2) The department enters into an agreement with the provider for
repayment of the overpayment or penalty.
(3) The department determines, upon appeal, that there is no
overpayment or that the penalty should not have been assessed.
(e) The provider shall pay interest on any unrecovered
overpayments or penalty assessments as provided by subdivision (h) of
Section 14171. If recovery of a disallowed payment has been made by
the department, a provider who prevails in an appeal of a disallowed
payment or penalty assessment shall be paid interest as provided by
subdivision (g) of Section 14171.
(f) Nothing in this section shall prohibit a provider from
repaying all or a part of the disputed overpayment or penalty
assessment without prejudice to the provider's right to a hearing
pursuant to subdivision (b) of Section 14171 or pursuant to Section
100171 of the Health and Safety Code.
(g) If a provider appeals the assessment of a civil money penalty,
liquidation of the penalty shall be deferred until the appeal is
rejected or a final administrative decision is issued.
(h) If on the basis of reliable evidence, the department has a
valid basis for believing that, with respect to a provider,
proceedings have been or will shortly be instituted in a state or
federal court for purposes of determining whether the provider is
insolvent or bankrupt under appropriate state or federal law, or that
a provider is or will shortly be taking action which reasonably
might seriously hinder or defeat the department's ability to collect
overpayments in the future, the department may immediately adjust any
payments to the provider to a level necessary to insure that no
overpayment to the provider is made.
14173. An abstract of a judgment obtained pursuant to subdivision
(a) of Section 14172 or a copy thereof may be recorded with the
county recorder of any county. From the time of recording, the
judgment shall constitute a lien upon all real or personal property
of the provider in that county owned by the provider at the time, or
which the provider may afterwards but before the lien expires,
acquire. The lien shall have the force, effect and priority of a
judgment lien and shall continue for 10 years from the time of
recording of the abstract of judgment obtained pursuant to
subdivision (a) of Section 14172 unless sooner released or otherwise
discharged.
The lien may, within 10 years from the date of recording of the
abstract of judgment or within 10 years from the date of the last
extension of the lien in the manner herein provided, be extended by
recording a new abstract in the office of the county recorder of any
county. From the date of such recording the lien shall be extended
for 10 years unless sooner released or otherwise discharged.
Execution shall issue upon such a judgment upon request of the
director in the same manner as execution may issue upon other
judgments. Sale shall be held under such execution as prescribed in
the Code of Civil Procedure. In all proceedings under this section,
the director or his authorized agents may act on behalf of the state.
14174. The right of the director to use the summary judgment
procedure contained in this article shall be in addition to any other
collection procedure available to him. No action taken by the
director shall be construed to be an election to pursue the summary
judgment procedure to the exclusion of any other collection
procedure.
14175. The director may release any lien imposed pursuant to
subdivision (a) of Section 14172 if he finds that the liability
represented by the lien, including any interest accrued thereon, has
been paid or is legally unenforceable.
14176. The director may recover a due and payable overpayment made
to a provider which is or has been participating under the provisions
of this chapter by means of a repayment agreement executed between
such provider and the director, and by any other means available at
law.
14176.5. Whenever it has been determined, pursuant to an audit
conducted by the department, that an overpayment for Medi-Cal
services has been made to a hospital for services rendered from
January 1, 1992, to December 31, 1997, the department may forgive all
or part of the debt arising from the overpayment, and interest, if
the hospital is all of the following:
(a) A disproportionate share hospital, as defined in Section
14105.98.
(b) Located in Kern County or Monterey County.
(c) A nonprofit hospital, as defined in Section 127050 of the
Health and Safety Code, or not affiliated with a hospital system.
14177. When it has been determined that a provider of health care
services participating under the provisions of this chapter has
received an overpayment which is due and payable, the director may
recover such overpayment by offset against any amount currently due
to a provider under the provisions of this chapter or Chapter 8
(commencing with Section 14200) of this part.
14178. (a) Counties shall be held harmless in accordance with the
provisions of this section for state funds to be recouped pursuant to
audit exceptions issued for acts performed prior to July 1, 1982.
(b) Audit exception for the purpose of this section shall be
defined as follows: Demands for recovery resulting from those audit
reports issued by the Department of Health Services in which no final
settlement or administrative decision adopted by the director has
been arrived at prior to the effective date of this section.
(c) Such forgiveness of audit exceptions shall apply only to the
state's share of payments made in support of the Medi-Cal program.
Counties shall retain liability for payment of the federal portion of
payments made for Medi-Cal services unless and until the federal
government agrees to waive their rights for repayment of federal
share.
(d) Audit exceptions regarding county claims related to nonprogram
benefits shall remain unaffected by the provisions of the section.
County claims for nonprogram benefits shall include claims for return
on equity, claims for bad debts, claims for uncompensated care, and
any other claims not compensable pursuant to Title XIX of the federal
Social Security Act.
(e) The amount of the recoupment of the federal portion of valid
audit exceptions pursuant to subdivision (c) shall be determined
pursuant to the existing administrative appeals process.
(f) No provision of this section shall apply to any audit report
issued by the Department of Health Services after the effective date
of this section relating to acts performed subsequent to July 1,
1982.
14170. (a) (1) Amounts paid for services provided to Medi-Cal
beneficiaries shall be audited by the department in the manner and
form prescribed by the department. The department shall maintain
adequate controls to ensure responsibility and accountability for the
expenditure of federal and state funds. Cost reports and other data
submitted by providers to a state agency for the purpose of
determining reasonable costs for services or establishing rates of
payment shall be considered true and correct unless audited or
reviewed by the department within 18 months after July 1, 1969, the
close of the period covered by the report, or after the date of
submission of the original or amended report by the provider,
whichever is later. Moreover the cost reports and other data for cost
reporting periods beginning on January 1, 1972, and thereafter shall
be considered true and correct unless audited or reviewed within
three years after the close of the period covered by the report, or
after the date of submission of the original or amended report by the
provider, whichever is later.
(2) (A) Nothing in this section shall be construed to limit the
correction of cost reports or rates of payment when inaccuracies are
determined to be the result of intent to defraud, or when a delay in
the completion of an audit is the result of willful acts by the
provider or inability to reach agreement on the terms of final
settlement.
(B) Nothing in this section shall be construed to preclude the
department from further review of cost reports and other data for
cost reporting periods beginning on January 1, 1998, after the
three-year period contained in paragraph (1) of subdivision (a),
where after the three-year period the department discovers
information not customarily contained in these cost reports and other
data for the fiscal periods in question that indicates the provider
may have engaged in practices that have resulted in
overreimbursement.
(3) Notwithstanding any other provision of law, nursing facilities
and all categories of intermediate care facilities for the
developmentally disabled which have received and are receiving funds
for salary increases pursuant to Sections 14110.6 and 14110.7 shall
maintain payroll and personnel records for examination by auditors
from the department and the Labor Commissioner beginning March 1985
until the records have been audited, or until December 31, 1992,
whichever occurs first.
(b) Notwithstanding any other provision of law, costs reported for
reimbursement purposes relative to Medi-Cal beneficiaries in nursing
facilities that are distinct parts of acute care hospitals shall be
audited by the department at least annually. The audits may be
performed on a sample basis and, when the sample is statistically
reliable, as determined by the department, may be used for
ratesetting purposes.
14170.1. (a) Prior to the issuance to a provider of pharmaceutical
services of any demand for payment pursuant to an audit or
examination conducted under Sections 10722 and 14170, the amount of
any underpayment to the provider for validly submitted claims or for
valid claims which have inadvertently not been submitted and which
arose during the audit period shall be determined and credited toward
the amount of any overpayment due to the department. This section
shall apply to all audits and examinations conducted under Sections
10722 and 14170 relative to amounts paid during the audit period for
services provided to Medi-Cal beneficiaries. No audit may be reopened
to provide for underpayments in which a final decision has been
reached pursuant to Section 14171 or in which a certificate has been
filed pursuant to Section 14172.
(b) When a provider of pharmaceutical services asserts that a
claim has been underpaid for purposes of receiving a credit against
overpayments, as authorized by this section, the provider shall
submit to the department information and documentation sufficient to
resolve any dispute as to whether such claim was in fact underpaid.
(c) For purposes of this section, the term "underpayments" shall
include errors made by the pharmacist and errors made by the fiscal
intermediary in determining payments for claims submitted within the
billing time limits specified in Section 14115.
14170.5. (a) No provider's claims for reimbursement under this
chapter shall be subject to any special claims review procedure for a
period in excess of nine months unless the department shows cause
why the provider's claims for reimbursement should continue to be
subject to special claims review procedures.
(b) The department shall provide notice to a provider of its
reasons for determining that the provider shall be subject to
extended special claims review.
14170.8. (a) Notwithstanding any other provision of law, every
primary supplier of pharmaceuticals, medical equipment, or supplies
shall maintain accounting records to demonstrate the manufacture,
assembly, purchase, or acquisition and subsequent sale, of any
pharmaceuticals, or medical equipment, or supplies to providers, as
defined in Section 14043.1. Accounting records shall include, but not
be limited to, inventory records, general ledgers, financial
statements, purchase and sales journals and invoices, prescription
records, bills of lading, and delivery records. For purposes of this
section the term "primary suppliers" shall mean any manufacturer,
principal labeler, assembler, wholesaler, or retailer.
(b) Accounting records maintained pursuant to subdivision (a)
shall be subject to audit or examination by the department or its
agents. This audit or examination may include, but is not limited to,
verification of what was claimed by the provider. These accounting
records shall be maintained for three years from the date of sale or
the date of service.
(c) This section shall not apply to any clinic licensed pursuant
to subdivision (a) of Section 1204 of the Health and Safety Code or
to any manufacturer of prescription drugs registered with the federal
Food and Drug Administration in accordance with Section 510 of the
Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 360).
14170.10. (a) No provider shall submit a claim to the department or
its fiscal intermediaries for the dispensing or furnishing of a
controlled drug, a dangerous drug, or a dangerous device, 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 for the
performance of a clinical laboratory test or examination, unless the
provider's records contain an order authorized by Section 4019 of the
Business and Professions Code, or a prescription, including an
electronic transmission prescription, signed by the person lawfully
authorized by his or her practice act to prescribe or order the
dispensing or furnishing of that drug or device to, or for the
performance of a clinical laboratory test or examination that meets
the federal CLIA standard for test requisition as set forth in
Section 493.1241 of Title 42 of the Code of Federal Regulations upon,
a Medi-Cal beneficiary, except the following:
(1) Providers who are physicians, clinics, hospitals, or other
nonpharmacists and who are legally authorized to dispense or furnish
drugs or devices directly to their patients, may in lieu of the
requirements of this subdivision include a notation in their patients'
medical charts reflecting they have dispensed or furnished the drug
or device directly to the patient as authorized by the Business and
Professions Code.
(2) Anatomical pathology examinations may be ordered by physicians
by notation within the patients medical record during inpatient or
outpatient surgery provided that these examinations comply with
federal CLIA requirements. Any claims made contrary to this section
shall be subject to recovery as overpayments.
(3) If obtaining a biological specimen is required in order that a
test or examination occurs on a periodic basis within an established
provider-patient relationship or the furnishing or dispensing of
drugs or devices occurs on a periodic basis within an established
provider-patient relationship, the provider shall only be required to
retain the order or requisition upon obtaining the biological
specimen necessary for the initial test or examination or initial
furnishing or dispensing of the drug or device, so long as an
appropriate record of each test or examination, or furnishing or
dispensing, is entered in the patient's chart.
(b) For purposes of this section:
(1) "Signed" shall include a signature that meets the conditions
of the Electronic Signature in Global and National Commerce Act (15
U.S.C. Sec. 7001).
(2) "Controlled substance" shall mean any substance listed in
Chapter 2 (commencing with Section 11053) of Division 10 of the
Health and Safety Code.
(3) "Dangerous drug" or "dangerous device" has the same meaning as
in Section 4022 of the Business and Professions Code.
(4) "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.
(5) "Prescription" has the same meaning as in Section 4040 of the
Business and Professions Code.
(6) "Electronic transmission prescription" includes both image and
data prescriptions.
(7) "Electronic image transmission prescription" means any
prescription order for which a facsimile of the order is received by
a pharmacy or other appropriate provider from a licensed prescriber
and that is reduced to writing and processed by the pharmacy or other
appropriate provider in accordance with applicable provisions of the
Business and Professions Code, including Section 4070.
(8) "Electronic data transmission prescription" means any
prescription order, other than an electronic image transmission
prescription, that is electronically transmitted from a licensed
prescriber to a pharmacy or other appropriate provider and which is
reduced to writing and processed by the pharmacy or other appropriate
provider in accordance with applicable provisions of the Business
and Professions Code, including Section 4070. The use of commonly
used abbreviations shall not invalidate an otherwise valid
prescription.
(9) "Clinical laboratory test or examination" means the detection,
identification, measurement, evaluation, correlation, monitoring,
and reporting of any particular analyte, entity, or substance within
a biological specimen for the purpose of obtaining scientific data
that may be used as an aid to ascertain the presence, progress, and
source of a disease or physiological condition in a human being, or
used as an aid in the prevention, prognosis, monitoring, or treatment
of a physiological or pathological condition in a human being, or
for the performance of nondiagnostic tests for assessing the health
of an individual.
(c) 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 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 the provisions of this section, 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 on the effective
date of the action or change.
14170.11. (a) No person or entity shall submit a claim to the
department or its fiscal intermediaries for reimbursement under the
Medi-Cal program for a nerve conduction test or for electromyography
unless the person or entity's records contains a copy, for each
person performing each test or electromyography, for which a claim is
submitted, a certificate or diploma of satisfactory completion of a
neurology or physical medicine and rehabilitation residency program
accredited by the Accreditation Council of Graduate Medical Education
(ACGME).
(b) The department may identify by publication, in provider
bulletins or similar instructions, requirements that reimbursement
from the Medi-Cal program shall only be made for the provision of
certain procedures, tests, examinations, or other medical services
provided by persons who possess a particular level of education,
experience, and training as evidenced by satisfactory completion of
medical residency programs or board certification in a particular
field and that those submitting claims shall maintain a copy of this
certificate or diploma.
(c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific, this section
by means of all county letters, provider bulletins, or similar
instructions. Thereafter, the department may adopt regulations in
accordance with the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
14171. (a) The director shall establish administrative appeal
processes to review grievances or complaints arising from the
findings of an audit or examination made pursuant to Sections 10722
and 14170 and for final settlements, including, in the case of
hospitals, the application of Sections 51536, 51537, and 51539 of
Title 22 of the California Code of Regulations. All these processes
shall be established by regulation, pursuant to, and consistent with,
Section 100171 of the Health and Safety Code.
(b) Different administrative appeal processes may be established
by the director for grievances or complaints arising from the
determinations of a tentative or final settlement based on audit or
examination findings made by or on behalf of the department pursuant
to Sections 10722 and 14170. However, consistent with existing
practice, no administrative appeal shall be available for tentative
settlement of cost reports.
(c) The administrative appeal process established by the director
for tentative settlements, including, in the case of hospitals, the
application of Sections 51536, 51537, and 51539 of Title 22 of the
California Code of Regulations shall be an informal process which,
however, guarantees a provider the right to present any grievance or
complaint to the department in writing. Any subsequent hearings shall
be conducted in an informal manner and shall be held at the
discretion of the department.
(d) The time limitations in subdivisions (e) and (f) for the
impartial hearing and the final decisions are mandatory. If the
department fails to conduct the hearing or to adopt a final decision
thereon within the time limitations provided in subdivisions (e) and
(f), the amount of any overpayment which is ultimately determined by
the department to be due shall be reduced by 10 percent for each
30-day period, or portion thereof, that the hearing or the decision,
or both, are delayed beyond the time limitations provided in
subdivisions (e) and (f). However, the time period shall be extended
by either of the following:
(1) Delay caused by a provider.
(2) Extensions of time granted a provider at its sole request or
at the joint request of the provider and the department.
(e) (1) The administrative appeal process established by the
director shall commence with an informal conference with the
provider, a representative of the department, and the administrative
law judge. The informal conference shall be conducted no later than
90 days after the filing of a timely and specific statement of
disputed issues by the provider. The administrative law judge, when
appropriate, may assign the administrative appeal to an informal
level of review where efforts could be made to resolve facts and
issues in dispute in a fair and equitable manner, subject to the
requirements of state and federal law. The review conducted at this
informal level shall be completed no later than 180 days after the
filing of a timely and specific statement of disputed issues by the
provider.
(2) Nothing in this subdivision shall prohibit the provider from
presenting any unresolved grievances or complaints at an impartial
hearing pursuant to subdivision (a). The impartial hearing shall be
conducted no later than 300 days after the filing of a timely and
specific statement of disputed issues by the provider.
(3) (A) Subject to subdivision (f), a final decision in a
noninstitutional provider appeal shall be adopted within 180 days
after the closure of the record of the impartial hearing, and a final
decision in an institutional provider appeal shall be adopted within
300 days after the closure of the record of the impartial hearing.
(B) The department shall mail a copy of the adopted decision to
all parties within 30 days of the date of adoption of the decision.
(f) In the event the director intends to modify a proposed
decision, on or before the 180th day following the closure of the
record of the hearing for noninstitutional providers or the 300th day
following the closure of the record of the hearing for institutional
providers, the director shall provide written notice of his or her
intention to the parties and shall afford the parties an opportunity
to present written argument. Following this notice, on or before the
240th day following the closure of the record of the hearing for
noninstitutional providers or the 420th day following closure of the
record of the hearing for institutional providers, or within that
additional time period as is granted pursuant to the sole request of
a provider or at the joint request of the provider and the
department, the director shall issue a final decision.
(g) In the event recovery of a disallowed payment has been made by
the department, a provider who prevails in an appeal of a disallowed
payment shall be entitled to interest at the rate equal to the
monthly average received on investments in the Surplus Money
Investment Fund, commencing on the date the appeal is formally
accepted by the department or the date payment is received by the
department, whichever is later.
(h) Except as provided in subdivision (i), commencing 60 days
after issuance of the first statement of account status or demand for
repayment resulting from an audit or examination made pursuant to
Sections 10722 and 14170, interest at the rate equal to the monthly
average received on investments in the Surplus Money Investment Fund
during the month the first statement of account status or demand for
repayment was issued shall be assessed against any unrecovered
overpayment due to the department.
(i) (1) Commencing on the day following the last day of the period
covered by an audit or examination made pursuant to Sections 10722
and 14170, interest at the rate established under Section 19269 of
the Revenue and Taxation Code which is in effect on the date of the
commencement of that interest shall be assessed against any
unrecovered overpayment due to the department by providers of durable
medical equipment or incontinence supplies.
(2) Interest which accrues under this subdivision for recoupment
of an overpayment based on the lack of medical necessity for a
previously approved claim shall commence to accrue on the date of
written demand by the department.
(j) The final decision of the director shall be reviewable in
accordance with Section 1094.5 of the Code of Civil Procedure within
six months of the issuance of the director's final decision.
14171.5. Any institutional provider of health care services that
obtained reimbursement under this chapter to which it is not entitled
shall be subject to the following interest charges or penalties:
(a) When it is established upon audit that the provider has
claimed payments under this chapter to which it is not entitled, the
provider shall pay, in addition to the amount improperly received,
interest at the rate specified by subdivision (h) of Section 14171.
(b) When it is established upon audit that the provider claimed
payments related to services or costs that the department had
previously notified the provider in an audit report that the costs or
services were not reimbursable, the provider shall pay in addition
to the amount improperly claimed, a penalty of 10 percent of the
amount improperly claimed after this notice, plus the cost of the
audit. In addition, interest shall be assessed at the rate specified
in subdivision (h) of Section 14171. Providers who wish to preserve
appeal rights or to challenge the department's positions regarding
appeal issues, may claim the cost or services and not be reimbursed
therefor if they are identified and presented separately on the cost
report.
(c) When it is established that the provider fraudulently claimed
and received payments under this chapter, the provider shall pay a
penalty of 25 percent of the amount improperly claimed, plus the cost
of the audit, in addition to the amount thereof. In addition,
interest will be assessed at the rate specified by subdivision (h) of
Section 14171. A fraudulent claim is a claim upon which the provider
has been convicted of fraud upon the program. Nothing in this
section shall prevent the imposition of any other civil or criminal
penalties to which the provider may be liable.
(d) Appeals to action taken in subdivisions (a), (b), and (c) of
Section 14171.5 above are subject to the administrative appeals
process provided by Section 14171.
(e) Penalties paid by providers under subdivisions (a), (b), and
(c) of Section 14171.5 are not reimbursable by the program.
(f) As used in this section, "the cost of the audit" includes
actual hourly wages, travel, and incidental expenses at rates
allowable by California Victim Compensation and Government Claims
Board rules, and applicable overhead costs.
14171.6. (a) (1) Any provider, as defined in paragraph (3), that
obtains reimbursement under this chapter to which it is not entitled
shall be subject to interest charges or penalties as specified in
this section.
(2) When it is established upon audit that the provider has not
received reimbursement to which the provider is entitled, the
department shall pay the provider interest assessed at the rate, and
in the manner, specified in subdivision (g) of Section 14171.
(3) For purposes of this section, "provider" means any provider,
as defined in Section 14043.1.
(b) When it is established upon audit that the provider has
claimed payments under this chapter to which it is not entitled, the
provider shall pay, in addition to the amount improperly received,
interest at the rate specified by subdivision (h) of Section 14171.
(c) (1) When it is established upon audit that the provider
claimed payments related to services or costs that the department had
previously notified the provider in an audit report that the costs
or services were not reimbursable, the provider shall pay, in
addition to the amount improperly claimed, a penalty of 10 percent of
the amount improperly claimed after receipt of the notice, plus the
cost of the audit.
(2) In addition to the penalty and costs specified by paragraph
(1), interest shall be assessed at the rate specified in subdivision
(h) of Section 14171.
(3) Providers that wish to preserve appeal rights or to challenge
the department's positions regarding appeal issues may claim the
costs or services and not be reimbursed therefor if they are
identified and presented separately on the cost report.
(d) (1) When it is established that the provider fraudulently
claimed and received payments under this chapter, the provider shall
pay, in addition to that portion of the claim that was improperly
claimed, a penalty of 300 percent of the amount improperly claimed,
plus the cost of the audit.
(2) In addition to the penalty and costs specified by paragraph
(1), interest shall be assessed at the rate specified by subdivision
(h) of Section 14171.
(3) For purposes of this subdivision, a fraudulent claim is a
claim upon which the provider has been convicted of fraud upon the
Medi-Cal program.
(e) Nothing in this section shall prevent the imposition of any
other civil or criminal penalties to which the provider may be
liable.
(f) Any appeal to any action taken pursuant to subdivision (b),
(c), or (d) is subject to the administrative appeals process provided
by Section 14171.
(g) As used in this section, "cost of the audit" includes actual
hourly wages, travel, and incidental expenses at rates allowable by
rules adopted by the California Victim Compensation and Government
Claims Board and applicable overhead costs that are incurred by
employees of the state in administering this chapter with respect to
the performance of audits.
(h) This section shall not apply to any clinic licensed pursuant
to subdivision (a) of 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, or to
any provider that is operated by a city, county, or school district.
14172. (a) Except as provided in subdivision (b), if any amount is
due and payable and unpaid as the result of an overpayment to a
provider of health care services, durable medical equipment, or
incontinence supplies identified through an audit or examination
conducted by or on behalf of the director, and the findings of the
audit or examination are completed and no appeal is taken or the
director has issued a final decision on the appeal pursuant to
Section 14171, and 90 days have elapsed from the completion of that
audit or examination or issuance of that final decision on appeal,
the director may, not later than three years after the payment became
due and owing, file in the office of the Clerk of the Superior Court
of Sacramento County, and with the clerk of the superior court of
the county in which the provider has its principal place of business,
a certificate containing the following:
(1) Interest, as prescribed by Section 14171.
(2) A statement that the director has complied with this article
prior to the filing of the certificate.
(3) A request that judgment be entered against the provider in the
amount set forth in the certificate.
The clerk immediately upon the filing of the certificate shall
enter a judgment for the State of California against the provider in
the amount set forth in the certificate. The judgment may be filed by
the clerk in a looseleaf book entitled "Health Care Overpayment
Recovery Judgments."
(b) If the provider seeks judicial review of the final decision of
the director pursuant to subdivision (k) of Section 14171 and notice
of that action is properly served on the director within 90 days of
the issuance of the final decision of the director, the director
shall not file any certificate as provided in subdivision (a).
If the provider does not seek judicial review of the final
decision of the director pursuant to subdivision (k) of Section 14171
and does not properly serve notice within 90 days from the date of
the final decision of the director, the director may file the
certificate provided in subdivision (a). If the provider seeks
judicial review of the final decision of the director more than 90
days from the date of the decision in accordance with subdivision (k)
of Section 14171, the director shall within 10 days after receiving
notice of that action release any lien imposed pursuant to this
article and any judgment entered is for all purposes null and void.
14172.5. (a) No later than 60 days after the completion of an audit
or examination pursuant to Sections 10722 and 14170, the department
shall issue the first statement of account status or demand for
repayment.
(b) (1) Notwithstanding the provisions of Section 14172 or any
other law, when it is established that an overpayment has been made
to a provider or a civil money penalty assessed pursuant to Section
14123.2, 14123.25, 14171.5, or 14171.6 is due from a provider, the
department shall not begin liquidation of the overpayment until 60
days after issuance of the first statement of accountability or
demand for repayment after issuance of the audit or examination
report establishing the overpayment or the document establishing the
penalty. The department shall pursue liquidation of the overpayment
or penalty upon expiration of the 60-day period. If the department
finds, upon appeal, that no overpayment was made to, or no penalty is
due from, the provider, the department shall repay the amount
collected, together with the payment of interest thereon, from the
date occurring 60 days after issuance of the first statement of
accountability or demand for repayment after issuance of the audit or
examination report alleging the overpayment or the document
establishing the penalty.
(2) This subdivision shall not be construed so as to affect the
department's authority under other provisions of law for liquidation
of overpayments to providers.
(c) Liquidation of the overpayment or penalty may be by any of the
following:
(1) Lump-sum payment by the provider.
(2) Offset against current payments due to the provider.
(3) A repayment agreement executed between the provider and the
department.
(4) Any other method of recovery available to and deemed
appropriate by the director.
(d) An offset against current payments shall continue until one of
the following occurs:
(1) The overpayment or penalty is recovered.
(2) The department enters into an agreement with the provider for
repayment of the overpayment or penalty.
(3) The department determines, upon appeal, that there is no
overpayment or that the penalty should not have been assessed.
(e) The provider shall pay interest on any unrecovered
overpayments or penalty assessments as provided by subdivision (h) of
Section 14171. If recovery of a disallowed payment has been made by
the department, a provider who prevails in an appeal of a disallowed
payment or penalty assessment shall be paid interest as provided by
subdivision (g) of Section 14171.
(f) Nothing in this section shall prohibit a provider from
repaying all or a part of the disputed overpayment or penalty
assessment without prejudice to the provider's right to a hearing
pursuant to subdivision (b) of Section 14171 or pursuant to Section
100171 of the Health and Safety Code.
(g) If a provider appeals the assessment of a civil money penalty,
liquidation of the penalty shall be deferred until the appeal is
rejected or a final administrative decision is issued.
(h) If on the basis of reliable evidence, the department has a
valid basis for believing that, with respect to a provider,
proceedings have been or will shortly be instituted in a state or
federal court for purposes of determining whether the provider is
insolvent or bankrupt under appropriate state or federal law, or that
a provider is or will shortly be taking action which reasonably
might seriously hinder or defeat the department's ability to collect
overpayments in the future, the department may immediately adjust any
payments to the provider to a level necessary to insure that no
overpayment to the provider is made.
14173. An abstract of a judgment obtained pursuant to subdivision
(a) of Section 14172 or a copy thereof may be recorded with the
county recorder of any county. From the time of recording, the
judgment shall constitute a lien upon all real or personal property
of the provider in that county owned by the provider at the time, or
which the provider may afterwards but before the lien expires,
acquire. The lien shall have the force, effect and priority of a
judgment lien and shall continue for 10 years from the time of
recording of the abstract of judgment obtained pursuant to
subdivision (a) of Section 14172 unless sooner released or otherwise
discharged.
The lien may, within 10 years from the date of recording of the
abstract of judgment or within 10 years from the date of the last
extension of the lien in the manner herein provided, be extended by
recording a new abstract in the office of the county recorder of any
county. From the date of such recording the lien shall be extended
for 10 years unless sooner released or otherwise discharged.
Execution shall issue upon such a judgment upon request of the
director in the same manner as execution may issue upon other
judgments. Sale shall be held under such execution as prescribed in
the Code of Civil Procedure. In all proceedings under this section,
the director or his authorized agents may act on behalf of the state.
14174. The right of the director to use the summary judgment
procedure contained in this article shall be in addition to any other
collection procedure available to him. No action taken by the
director shall be construed to be an election to pursue the summary
judgment procedure to the exclusion of any other collection
procedure.
14175. The director may release any lien imposed pursuant to
subdivision (a) of Section 14172 if he finds that the liability
represented by the lien, including any interest accrued thereon, has
been paid or is legally unenforceable.
14176. The director may recover a due and payable overpayment made
to a provider which is or has been participating under the provisions
of this chapter by means of a repayment agreement executed between
such provider and the director, and by any other means available at
law.
14176.5. Whenever it has been determined, pursuant to an audit
conducted by the department, that an overpayment for Medi-Cal
services has been made to a hospital for services rendered from
January 1, 1992, to December 31, 1997, the department may forgive all
or part of the debt arising from the overpayment, and interest, if
the hospital is all of the following:
(a) A disproportionate share hospital, as defined in Section
14105.98.
(b) Located in Kern County or Monterey County.
(c) A nonprofit hospital, as defined in Section 127050 of the
Health and Safety Code, or not affiliated with a hospital system.
14177. When it has been determined that a provider of health care
services participating under the provisions of this chapter has
received an overpayment which is due and payable, the director may
recover such overpayment by offset against any amount currently due
to a provider under the provisions of this chapter or Chapter 8
(commencing with Section 14200) of this part.
14178. (a) Counties shall be held harmless in accordance with the
provisions of this section for state funds to be recouped pursuant to
audit exceptions issued for acts performed prior to July 1, 1982.
(b) Audit exception for the purpose of this section shall be
defined as follows: Demands for recovery resulting from those audit
reports issued by the Department of Health Services in which no final
settlement or administrative decision adopted by the director has
been arrived at prior to the effective date of this section.
(c) Such forgiveness of audit exceptions shall apply only to the
state's share of payments made in support of the Medi-Cal program.
Counties shall retain liability for payment of the federal portion of
payments made for Medi-Cal services unless and until the federal
government agrees to waive their rights for repayment of federal
share.
(d) Audit exceptions regarding county claims related to nonprogram
benefits shall remain unaffected by the provisions of the section.
County claims for nonprogram benefits shall include claims for return
on equity, claims for bad debts, claims for uncompensated care, and
any other claims not compensable pursuant to Title XIX of the federal
Social Security Act.
(e) The amount of the recoupment of the federal portion of valid
audit exceptions pursuant to subdivision (c) shall be determined
pursuant to the existing administrative appeals process.
(f) No provision of this section shall apply to any audit report
issued by the Department of Health Services after the effective date
of this section relating to acts performed subsequent to July 1,
1982.
14170. (a) (1) Amounts paid for services provided to Medi-Cal
beneficiaries shall be audited by the department in the manner and
form prescribed by the department. The department shall maintain
adequate controls to ensure responsibility and accountability for the
expenditure of federal and state funds. Cost reports and other data
submitted by providers to a state agency for the purpose of
determining reasonable costs for services or establishing rates of
payment shall be considered true and correct unless audited or
reviewed by the department within 18 months after July 1, 1969, the
close of the period covered by the report, or after the date of
submission of the original or amended report by the provider,
whichever is later. Moreover the cost reports and other data for cost
reporting periods beginning on January 1, 1972, and thereafter shall
be considered true and correct unless audited or reviewed within
three years after the close of the period covered by the report, or
after the date of submission of the original or amended report by the
provider, whichever is later.
(2) (A) Nothing in this section shall be construed to limit the
correction of cost reports or rates of payment when inaccuracies are
determined to be the result of intent to defraud, or when a delay in
the completion of an audit is the result of willful acts by the
provider or inability to reach agreement on the terms of final
settlement.
(B) Nothing in this section shall be construed to preclude the
department from further review of cost reports and other data for
cost reporting periods beginning on January 1, 1998, after the
three-year period contained in paragraph (1) of subdivision (a),
where after the three-year period the department discovers
information not customarily contained in these cost reports and other
data for the fiscal periods in question that indicates the provider
may have engaged in practices that have resulted in
overreimbursement.
(3) Notwithstanding any other provision of law, nursing facilities
and all categories of intermediate care facilities for the
developmentally disabled which have received and are receiving funds
for salary increases pursuant to Sections 14110.6 and 14110.7 shall
maintain payroll and personnel records for examination by auditors
from the department and the Labor Commissioner beginning March 1985
until the records have been audited, or until December 31, 1992,
whichever occurs first.
(b) Notwithstanding any other provision of law, costs reported for
reimbursement purposes relative to Medi-Cal beneficiaries in nursing
facilities that are distinct parts of acute care hospitals shall be
audited by the department at least annually. The audits may be
performed on a sample basis and, when the sample is statistically
reliable, as determined by the department, may be used for
ratesetting purposes.
14170.1. (a) Prior to the issuance to a provider of pharmaceutical
services of any demand for payment pursuant to an audit or
examination conducted under Sections 10722 and 14170, the amount of
any underpayment to the provider for validly submitted claims or for
valid claims which have inadvertently not been submitted and which
arose during the audit period shall be determined and credited toward
the amount of any overpayment due to the department. This section
shall apply to all audits and examinations conducted under Sections
10722 and 14170 relative to amounts paid during the audit period for
services provided to Medi-Cal beneficiaries. No audit may be reopened
to provide for underpayments in which a final decision has been
reached pursuant to Section 14171 or in which a certificate has been
filed pursuant to Section 14172.
(b) When a provider of pharmaceutical services asserts that a
claim has been underpaid for purposes of receiving a credit against
overpayments, as authorized by this section, the provider shall
submit to the department information and documentation sufficient to
resolve any dispute as to whether such claim was in fact underpaid.
(c) For purposes of this section, the term "underpayments" shall
include errors made by the pharmacist and errors made by the fiscal
intermediary in determining payments for claims submitted within the
billing time limits specified in Section 14115.
14170.5. (a) No provider's claims for reimbursement under this
chapter shall be subject to any special claims review procedure for a
period in excess of nine months unless the department shows cause
why the provider's claims for reimbursement should continue to be
subject to special claims review procedures.
(b) The department shall provide notice to a provider of its
reasons for determining that the provider shall be subject to
extended special claims review.
14170.8. (a) Notwithstanding any other provision of law, every
primary supplier of pharmaceuticals, medical equipment, or supplies
shall maintain accounting records to demonstrate the manufacture,
assembly, purchase, or acquisition and subsequent sale, of any
pharmaceuticals, or medical equipment, or supplies to providers, as
defined in Section 14043.1. Accounting records shall include, but not
be limited to, inventory records, general ledgers, financial
statements, purchase and sales journals and invoices, prescription
records, bills of lading, and delivery records. For purposes of this
section the term "primary suppliers" shall mean any manufacturer,
principal labeler, assembler, wholesaler, or retailer.
(b) Accounting records maintained pursuant to subdivision (a)
shall be subject to audit or examination by the department or its
agents. This audit or examination may include, but is not limited to,
verification of what was claimed by the provider. These accounting
records shall be maintained for three years from the date of sale or
the date of service.
(c) This section shall not apply to any clinic licensed pursuant
to subdivision (a) of Section 1204 of the Health and Safety Code or
to any manufacturer of prescription drugs registered with the federal
Food and Drug Administration in accordance with Section 510 of the
Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 360).
14170.10. (a) No provider shall submit a claim to the department or
its fiscal intermediaries for the dispensing or furnishing of a
controlled drug, a dangerous drug, or a dangerous device, 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 for the
performance of a clinical laboratory test or examination, unless the
provider's records contain an order authorized by Section 4019 of the
Business and Professions Code, or a prescription, including an
electronic transmission prescription, signed by the person lawfully
authorized by his or her practice act to prescribe or order the
dispensing or furnishing of that drug or device to, or for the
performance of a clinical laboratory test or examination that meets
the federal CLIA standard for test requisition as set forth in
Section 493.1241 of Title 42 of the Code of Federal Regulations upon,
a Medi-Cal beneficiary, except the following:
(1) Providers who are physicians, clinics, hospitals, or other
nonpharmacists and who are legally authorized to dispense or furnish
drugs or devices directly to their patients, may in lieu of the
requirements of this subdivision include a notation in their patients'
medical charts reflecting they have dispensed or furnished the drug
or device directly to the patient as authorized by the Business and
Professions Code.
(2) Anatomical pathology examinations may be ordered by physicians
by notation within the patients medical record during inpatient or
outpatient surgery provided that these examinations comply with
federal CLIA requirements. Any claims made contrary to this section
shall be subject to recovery as overpayments.
(3) If obtaining a biological specimen is required in order that a
test or examination occurs on a periodic basis within an established
provider-patient relationship or the furnishing or dispensing of
drugs or devices occurs on a periodic basis within an established
provider-patient relationship, the provider shall only be required to
retain the order or requisition upon obtaining the biological
specimen necessary for the initial test or examination or initial
furnishing or dispensing of the drug or device, so long as an
appropriate record of each test or examination, or furnishing or
dispensing, is entered in the patient's chart.
(b) For purposes of this section:
(1) "Signed" shall include a signature that meets the conditions
of the Electronic Signature in Global and National Commerce Act (15
U.S.C. Sec. 7001).
(2) "Controlled substance" shall mean any substance listed in
Chapter 2 (commencing with Section 11053) of Division 10 of the
Health and Safety Code.
(3) "Dangerous drug" or "dangerous device" has the same meaning as
in Section 4022 of the Business and Professions Code.
(4) "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.
(5) "Prescription" has the same meaning as in Section 4040 of the
Business and Professions Code.
(6) "Electronic transmission prescription" includes both image and
data prescriptions.
(7) "Electronic image transmission prescription" means any
prescription order for which a facsimile of the order is received by
a pharmacy or other appropriate provider from a licensed prescriber
and that is reduced to writing and processed by the pharmacy or other
appropriate provider in accordance with applicable provisions of the
Business and Professions Code, including Section 4070.
(8) "Electronic data transmission prescription" means any
prescription order, other than an electronic image transmission
prescription, that is electronically transmitted from a licensed
prescriber to a pharmacy or other appropriate provider and which is
reduced to writing and processed by the pharmacy or other appropriate
provider in accordance with applicable provisions of the Business
and Professions Code, including Section 4070. The use of commonly
used abbreviations shall not invalidate an otherwise valid
prescription.
(9) "Clinical laboratory test or examination" means the detection,
identification, measurement, evaluation, correlation, monitoring,
and reporting of any particular analyte, entity, or substance within
a biological specimen for the purpose of obtaining scientific data
that may be used as an aid to ascertain the presence, progress, and
source of a disease or physiological condition in a human being, or
used as an aid in the prevention, prognosis, monitoring, or treatment
of a physiological or pathological condition in a human being, or
for the performance of nondiagnostic tests for assessing the health
of an individual.
(c) 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 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 the provisions of this section, 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 on the effective
date of the action or change.
14170.11. (a) No person or entity shall submit a claim to the
department or its fiscal intermediaries for reimbursement under the
Medi-Cal program for a nerve conduction test or for electromyography
unless the person or entity's records contains a copy, for each
person performing each test or electromyography, for which a claim is
submitted, a certificate or diploma of satisfactory completion of a
neurology or physical medicine and rehabilitation residency program
accredited by the Accreditation Council of Graduate Medical Education
(ACGME).
(b) The department may identify by publication, in provider
bulletins or similar instructions, requirements that reimbursement
from the Medi-Cal program shall only be made for the provision of
certain procedures, tests, examinations, or other medical services
provided by persons who possess a particular level of education,
experience, and training as evidenced by satisfactory completion of
medical residency programs or board certification in a particular
field and that those submitting claims shall maintain a copy of this
certificate or diploma.
(c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific, this section
by means of all county letters, provider bulletins, or similar
instructions. Thereafter, the department may adopt regulations in
accordance with the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
14171. (a) The director shall establish administrative appeal
processes to review grievances or complaints arising from the
findings of an audit or examination made pursuant to Sections 10722
and 14170 and for final settlements, including, in the case of
hospitals, the application of Sections 51536, 51537, and 51539 of
Title 22 of the California Code of Regulations. All these processes
shall be established by regulation, pursuant to, and consistent with,
Section 100171 of the Health and Safety Code.
(b) Different administrative appeal processes may be established
by the director for grievances or complaints arising from the
determinations of a tentative or final settlement based on audit or
examination findings made by or on behalf of the department pursuant
to Sections 10722 and 14170. However, consistent with existing
practice, no administrative appeal shall be available for tentative
settlement of cost reports.
(c) The administrative appeal process established by the director
for tentative settlements, including, in the case of hospitals, the
application of Sections 51536, 51537, and 51539 of Title 22 of the
California Code of Regulations shall be an informal process which,
however, guarantees a provider the right to present any grievance or
complaint to the department in writing. Any subsequent hearings shall
be conducted in an informal manner and shall be held at the
discretion of the department.
(d) The time limitations in subdivisions (e) and (f) for the
impartial hearing and the final decisions are mandatory. If the
department fails to conduct the hearing or to adopt a final decision
thereon within the time limitations provided in subdivisions (e) and
(f), the amount of any overpayment which is ultimately determined by
the department to be due shall be reduced by 10 percent for each
30-day period, or portion thereof, that the hearing or the decision,
or both, are delayed beyond the time limitations provided in
subdivisions (e) and (f). However, the time period shall be extended
by either of the following:
(1) Delay caused by a provider.
(2) Extensions of time granted a provider at its sole request or
at the joint request of the provider and the department.
(e) (1) The administrative appeal process established by the
director shall commence with an informal conference with the
provider, a representative of the department, and the administrative
law judge. The informal conference shall be conducted no later than
90 days after the filing of a timely and specific statement of
disputed issues by the provider. The administrative law judge, when
appropriate, may assign the administrative appeal to an informal
level of review where efforts could be made to resolve facts and
issues in dispute in a fair and equitable manner, subject to the
requirements of state and federal law. The review conducted at this
informal level shall be completed no later than 180 days after the
filing of a timely and specific statement of disputed issues by the
provider.
(2) Nothing in this subdivision shall prohibit the provider from
presenting any unresolved grievances or complaints at an impartial
hearing pursuant to subdivision (a). The impartial hearing shall be
conducted no later than 300 days after the filing of a timely and
specific statement of disputed issues by the provider.
(3) (A) Subject to subdivision (f), a final decision in a
noninstitutional provider appeal shall be adopted within 180 days
after the closure of the record of the impartial hearing, and a final
decision in an institutional provider appeal shall be adopted within
300 days after the closure of the record of the impartial hearing.
(B) The department shall mail a copy of the adopted decision to
all parties within 30 days of the date of adoption of the decision.
(f) In the event the director intends to modify a proposed
decision, on or before the 180th day following the closure of the
record of the hearing for noninstitutional providers or the 300th day
following the closure of the record of the hearing for institutional
providers, the director shall provide written notice of his or her
intention to the parties and shall afford the parties an opportunity
to present written argument. Following this notice, on or before the
240th day following the closure of the record of the hearing for
noninstitutional providers or the 420th day following closure of the
record of the hearing for institutional providers, or within that
additional time period as is granted pursuant to the sole request of
a provider or at the joint request of the provider and the
department, the director shall issue a final decision.
(g) In the event recovery of a disallowed payment has been made by
the department, a provider who prevails in an appeal of a disallowed
payment shall be entitled to interest at the rate equal to the
monthly average received on investments in the Surplus Money
Investment Fund, commencing on the date the appeal is formally
accepted by the department or the date payment is received by the
department, whichever is later.
(h) Except as provided in subdivision (i), commencing 60 days
after issuance of the first statement of account status or demand for
repayment resulting from an audit or examination made pursuant to
Sections 10722 and 14170, interest at the rate equal to the monthly
average received on investments in the Surplus Money Investment Fund
during the month the first statement of account status or demand for
repayment was issued shall be assessed against any unrecovered
overpayment due to the department.
(i) (1) Commencing on the day following the last day of the period
covered by an audit or examination made pursuant to Sections 10722
and 14170, interest at the rate established under Section 19269 of
the Revenue and Taxation Code which is in effect on the date of the
commencement of that interest shall be assessed against any
unrecovered overpayment due to the department by providers of durable
medical equipment or incontinence supplies.
(2) Interest which accrues under this subdivision for recoupment
of an overpayment based on the lack of medical necessity for a
previously approved claim shall commence to accrue on the date of
written demand by the department.
(j) The final decision of the director shall be reviewable in
accordance with Section 1094.5 of the Code of Civil Procedure within
six months of the issuance of the director's final decision.
14171.5. Any institutional provider of health care services that
obtained reimbursement under this chapter to which it is not entitled
shall be subject to the following interest charges or penalties:
(a) When it is established upon audit that the provider has
claimed payments under this chapter to which it is not entitled, the
provider shall pay, in addition to the amount improperly received,
interest at the rate specified by subdivision (h) of Section 14171.
(b) When it is established upon audit that the provider claimed
payments related to services or costs that the department had
previously notified the provider in an audit report that the costs or
services were not reimbursable, the provider shall pay in addition
to the amount improperly claimed, a penalty of 10 percent of the
amount improperly claimed after this notice, plus the cost of the
audit. In addition, interest shall be assessed at the rate specified
in subdivision (h) of Section 14171. Providers who wish to preserve
appeal rights or to challenge the department's positions regarding
appeal issues, may claim the cost or services and not be reimbursed
therefor if they are identified and presented separately on the cost
report.
(c) When it is established that the provider fraudulently claimed
and received payments under this chapter, the provider shall pay a
penalty of 25 percent of the amount improperly claimed, plus the cost
of the audit, in addition to the amount thereof. In addition,
interest will be assessed at the rate specified by subdivision (h) of
Section 14171. A fraudulent claim is a claim upon which the provider
has been convicted of fraud upon the program. Nothing in this
section shall prevent the imposition of any other civil or criminal
penalties to which the provider may be liable.
(d) Appeals to action taken in subdivisions (a), (b), and (c) of
Section 14171.5 above are subject to the administrative appeals
process provided by Section 14171.
(e) Penalties paid by providers under subdivisions (a), (b), and
(c) of Section 14171.5 are not reimbursable by the program.
(f) As used in this section, "the cost of the audit" includes
actual hourly wages, travel, and incidental expenses at rates
allowable by California Victim Compensation and Government Claims
Board rules, and applicable overhead costs.
14171.6. (a) (1) Any provider, as defined in paragraph (3), that
obtains reimbursement under this chapter to which it is not entitled
shall be subject to interest charges or penalties as specified in
this section.
(2) When it is established upon audit that the provider has not
received reimbursement to which the provider is entitled, the
department shall pay the provider interest assessed at the rate, and
in the manner, specified in subdivision (g) of Section 14171.
(3) For purposes of this section, "provider" means any provider,
as defined in Section 14043.1.
(b) When it is established upon audit that the provider has
claimed payments under this chapter to which it is not entitled, the
provider shall pay, in addition to the amount improperly received,
interest at the rate specified by subdivision (h) of Section 14171.
(c) (1) When it is established upon audit that the provider
claimed payments related to services or costs that the department had
previously notified the provider in an audit report that the costs
or services were not reimbursable, the provider shall pay, in
addition to the amount improperly claimed, a penalty of 10 percent of
the amount improperly claimed after receipt of the notice, plus the
cost of the audit.
(2) In addition to the penalty and costs specified by paragraph
(1), interest shall be assessed at the rate specified in subdivision
(h) of Section 14171.
(3) Providers that wish to preserve appeal rights or to challenge
the department's positions regarding appeal issues may claim the
costs or services and not be reimbursed therefor if they are
identified and presented separately on the cost report.
(d) (1) When it is established that the provider fraudulently
claimed and received payments under this chapter, the provider shall
pay, in addition to that portion of the claim that was improperly
claimed, a penalty of 300 percent of the amount improperly claimed,
plus the cost of the audit.
(2) In addition to the penalty and costs specified by paragraph
(1), interest shall be assessed at the rate specified by subdivision
(h) of Section 14171.
(3) For purposes of this subdivision, a fraudulent claim is a
claim upon which the provider has been convicted of fraud upon the
Medi-Cal program.
(e) Nothing in this section shall prevent the imposition of any
other civil or criminal penalties to which the provider may be
liable.
(f) Any appeal to any action taken pursuant to subdivision (b),
(c), or (d) is subject to the administrative appeals process provided
by Section 14171.
(g) As used in this section, "cost of the audit" includes actual
hourly wages, travel, and incidental expenses at rates allowable by
rules adopted by the California Victim Compensation and Government
Claims Board and applicable overhead costs that are incurred by
employees of the state in administering this chapter with respect to
the performance of audits.
(h) This section shall not apply to any clinic licensed pursuant
to subdivision (a) of 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, or to
any provider that is operated by a city, county, or school district.
14172. (a) Except as provided in subdivision (b), if any amount is
due and payable and unpaid as the result of an overpayment to a
provider of health care services, durable medical equipment, or
incontinence supplies identified through an audit or examination
conducted by or on behalf of the director, and the findings of the
audit or examination are completed and no appeal is taken or the
director has issued a final decision on the appeal pursuant to
Section 14171, and 90 days have elapsed from the completion of that
audit or examination or issuance of that final decision on appeal,
the director may, not later than three years after the payment became
due and owing, file in the office of the Clerk of the Superior Court
of Sacramento County, and with the clerk of the superior court of
the county in which the provider has its principal place of business,
a certificate containing the following:
(1) Interest, as prescribed by Section 14171.
(2) A statement that the director has complied with this article
prior to the filing of the certificate.
(3) A request that judgment be entered against the provider in the
amount set forth in the certificate.
The clerk immediately upon the filing of the certificate shall
enter a judgment for the State of California against the provider in
the amount set forth in the certificate. The judgment may be filed by
the clerk in a looseleaf book entitled "Health Care Overpayment
Recovery Judgments."
(b) If the provider seeks judicial review of the final decision of
the director pursuant to subdivision (k) of Section 14171 and notice
of that action is properly served on the director within 90 days of
the issuance of the final decision of the director, the director
shall not file any certificate as provided in subdivision (a).
If the provider does not seek judicial review of the final
decision of the director pursuant to subdivision (k) of Section 14171
and does not properly serve notice within 90 days from the date of
the final decision of the director, the director may file the
certificate provided in subdivision (a). If the provider seeks
judicial review of the final decision of the director more than 90
days from the date of the decision in accordance with subdivision (k)
of Section 14171, the director shall within 10 days after receiving
notice of that action release any lien imposed pursuant to this
article and any judgment entered is for all purposes null and void.
14172.5. (a) No later than 60 days after the completion of an audit
or examination pursuant to Sections 10722 and 14170, the department
shall issue the first statement of account status or demand for
repayment.
(b) (1) Notwithstanding the provisions of Section 14172 or any
other law, when it is established that an overpayment has been made
to a provider or a civil money penalty assessed pursuant to Section
14123.2, 14123.25, 14171.5, or 14171.6 is due from a provider, the
department shall not begin liquidation of the overpayment until 60
days after issuance of the first statement of accountability or
demand for repayment after issuance of the audit or examination
report establishing the overpayment or the document establishing the
penalty. The department shall pursue liquidation of the overpayment
or penalty upon expiration of the 60-day period. If the department
finds, upon appeal, that no overpayment was made to, or no penalty is
due from, the provider, the department shall repay the amount
collected, together with the payment of interest thereon, from the
date occurring 60 days after issuance of the first statement of
accountability or demand for repayment after issuance of the audit or
examination report alleging the overpayment or the document
establishing the penalty.
(2) This subdivision shall not be construed so as to affect the
department's authority under other provisions of law for liquidation
of overpayments to providers.
(c) Liquidation of the overpayment or penalty may be by any of the
following:
(1) Lump-sum payment by the provider.
(2) Offset against current payments due to the provider.
(3) A repayment agreement executed between the provider and the
department.
(4) Any other method of recovery available to and deemed
appropriate by the director.
(d) An offset against current payments shall continue until one of
the following occurs:
(1) The overpayment or penalty is recovered.
(2) The department enters into an agreement with the provider for
repayment of the overpayment or penalty.
(3) The department determines, upon appeal, that there is no
overpayment or that the penalty should not have been assessed.
(e) The provider shall pay interest on any unrecovered
overpayments or penalty assessments as provided by subdivision (h) of
Section 14171. If recovery of a disallowed payment has been made by
the department, a provider who prevails in an appeal of a disallowed
payment or penalty assessment shall be paid interest as provided by
subdivision (g) of Section 14171.
(f) Nothing in this section shall prohibit a provider from
repaying all or a part of the disputed overpayment or penalty
assessment without prejudice to the provider's right to a hearing
pursuant to subdivision (b) of Section 14171 or pursuant to Section
100171 of the Health and Safety Code.
(g) If a provider appeals the assessment of a civil money penalty,
liquidation of the penalty shall be deferred until the appeal is
rejected or a final administrative decision is issued.
(h) If on the basis of reliable evidence, the department has a
valid basis for believing that, with respect to a provider,
proceedings have been or will shortly be instituted in a state or
federal court for purposes of determining whether the provider is
insolvent or bankrupt under appropriate state or federal law, or that
a provider is or will shortly be taking action which reasonably
might seriously hinder or defeat the department's ability to collect
overpayments in the future, the department may immediately adjust any
payments to the provider to a level necessary to insure that no
overpayment to the provider is made.
14173. An abstract of a judgment obtained pursuant to subdivision
(a) of Section 14172 or a copy thereof may be recorded with the
county recorder of any county. From the time of recording, the
judgment shall constitute a lien upon all real or personal property
of the provider in that county owned by the provider at the time, or
which the provider may afterwards but before the lien expires,
acquire. The lien shall have the force, effect and priority of a
judgment lien and shall continue for 10 years from the time of
recording of the abstract of judgment obtained pursuant to
subdivision (a) of Section 14172 unless sooner released or otherwise
discharged.
The lien may, within 10 years from the date of recording of the
abstract of judgment or within 10 years from the date of the last
extension of the lien in the manner herein provided, be extended by
recording a new abstract in the office of the county recorder of any
county. From the date of such recording the lien shall be extended
for 10 years unless sooner released or otherwise discharged.
Execution shall issue upon such a judgment upon request of the
director in the same manner as execution may issue upon other
judgments. Sale shall be held under such execution as prescribed in
the Code of Civil Procedure. In all proceedings under this section,
the director or his authorized agents may act on behalf of the state.
14174. The right of the director to use the summary judgment
procedure contained in this article shall be in addition to any other
collection procedure available to him. No action taken by the
director shall be construed to be an election to pursue the summary
judgment procedure to the exclusion of any other collection
procedure.
14175. The director may release any lien imposed pursuant to
subdivision (a) of Section 14172 if he finds that the liability
represented by the lien, including any interest accrued thereon, has
been paid or is legally unenforceable.
14176. The director may recover a due and payable overpayment made
to a provider which is or has been participating under the provisions
of this chapter by means of a repayment agreement executed between
such provider and the director, and by any other means available at
law.
14176.5. Whenever it has been determined, pursuant to an audit
conducted by the department, that an overpayment for Medi-Cal
services has been made to a hospital for services rendered from
January 1, 1992, to December 31, 1997, the department may forgive all
or part of the debt arising from the overpayment, and interest, if
the hospital is all of the following:
(a) A disproportionate share hospital, as defined in Section
14105.98.
(b) Located in Kern County or Monterey County.
(c) A nonprofit hospital, as defined in Section 127050 of the
Health and Safety Code, or not affiliated with a hospital system.
14177. When it has been determined that a provider of health care
services participating under the provisions of this chapter has
received an overpayment which is due and payable, the director may
recover such overpayment by offset against any amount currently due
to a provider under the provisions of this chapter or Chapter 8
(commencing with Section 14200) of this part.
14178. (a) Counties shall be held harmless in accordance with the
provisions of this section for state funds to be recouped pursuant to
audit exceptions issued for acts performed prior to July 1, 1982.
(b) Audit exception for the purpose of this section shall be
defined as follows: Demands for recovery resulting from those audit
reports issued by the Department of Health Services in which no final
settlement or administrative decision adopted by the director has
been arrived at prior to the effective date of this section.
(c) Such forgiveness of audit exceptions shall apply only to the
state's share of payments made in support of the Medi-Cal program.
Counties shall retain liability for payment of the federal portion of
payments made for Medi-Cal services unless and until the federal
government agrees to waive their rights for repayment of federal
share.
(d) Audit exceptions regarding county claims related to nonprogram
benefits shall remain unaffected by the provisions of the section.
County claims for nonprogram benefits shall include claims for return
on equity, claims for bad debts, claims for uncompensated care, and
any other claims not compensable pursuant to Title XIX of the federal
Social Security Act.
(e) The amount of the recoupment of the federal portion of valid
audit exceptions pursuant to subdivision (c) shall be determined
pursuant to the existing administrative appeals process.
(f) No provision of this section shall apply to any audit report
issued by the Department of Health Services after the effective date
of this section relating to acts performed subsequent to July 1,
1982.
