CA Welf & Inst Code § 14040.5 (2021)
2021 California Code|Welfare and Institutions Code - WIC|DIVISION 9 - PUBLIC SOCIAL SERVICES|PART 3 - AID AND MEDICAL ASSISTANCE|CHAPTER 7 - Basic Health Care|ARTICLE 1 - General Provisions|Section 14040.5.

14040.5.  (a) A provider may, by written contract, do either of the following:(1) Authorize a billing agent to submit claims, including electronic claims, on behalf of the provider for reimbursement for services, goods, supplies, or merchandise provided by the provider to the Medi-Cal program or a Medi-Cal beneficiary.(2) Assign signature authority for transmission of the claims by the authorized billing agent.(b) If a contract as described in subdivision (a) is entered into, the contract shall meet the requirements of Section 447.10 of Title 42 of the Code of Federal Regulations or shall have been approved by the federal Health Care Financing Administration for purposes of the Medicare program.(c) Any provider intending to use a billing agent to submit claims for reimbursements to the Medi-Cal program shall provide, at least 30 days prior to the submission of any claims for reimbursement by the billing agent, written notification to the director of the name, including known legal and any known fictitious or “doing business as” names used by the billing agent, the address, and the telephone number of the billing agent.(d) Billing agents shall register with the director and shall obtain a unique identifier prior to submitting any claims for reimbursement. This unique identifier shall be part of each claim for reimbursement submitted by the billing agent.(e) (1) Any Medi-Cal claim submitted by a billing agent or provider failing to comply with the requirements of this section or Section 14040 or 14040.1, or the regulations adopted pursuant to these sections, shall be subject to denial by the director.(2) The director may deny, suspend, or revoke the registration or continued registration of a billing agent based upon any of the following grounds:(A) Failure of the billing agent to comply with this section or Section 14040.1 or the regulations adopted under these sections.(B) Involvement of a billing agent in illegal submission of claims.(C) The billing agent is under investigation for fraud or abuse, as defined in Section 14043.1, by the department or any federal, state, or local law enforcement agency.(3) The director may immediately revoke or suspend the registration or continued registration of a billing agent upon the involvement of that billing agent in the filing of false or misleading information on claims submitted for services allegedly rendered, or when a billing agent has demonstrated a pattern of filing claims that are not technically complete claims as defined in subdivision (c) of Section 14040. The director shall not take action to revoke or suspend a billing agent’s registration or continued registration when the falsity or misleading nature of the information was the result of the provider’s actions and not the billing agent’s.(4) Proceedings for suspension or revocation of the registration or continued registration of a billing agent pursuant to this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, except that hearings may be conducted by departmental hearing officers appointed by the director. The director may periodically contract with the Office of Administrative Hearings to conduct these hearings.(5) The director shall provide written notification outlining the reasons for the proposed action to the billing agent 30 days in advance of a proposed suspension or revocation and shall allow the billing agent to demonstrate within those 30 days by comment why the suspension or revocation notice should not be issued.(6) If after consideration of the billing agent’s comment, the director determines that the suspension or revocation is nonetheless warranted, the director shall notify the billing agent of the suspension or revocation and the effective date thereof and at the same time shall serve the billing agent with an accusation. In addition, the director shall send each provider utilizing the services of the billing agent written notice of the suspension or revocation of the billing agent. The suspension or revocation of the billing agent shall take effect 15 days from the date of the notification of the billing agent and service of the accusation. To the extent allowed by federal law, the director may waive any claims submission requirement to assist a provider in submitting or resubmitting claims to the Medi-Cal program when they are delayed because of a billing agent’s suspension or revocation. Upon receipt of a notice of defense by the billing agent, the director shall set the matter for hearing within 30 days of the receipt of the notice. The suspension or revocation shall remain in effect until the hearing is completed and the director has made a final determination on the merits. The suspension or revocation shall, however, be deemed vacated if the director fails to make a final determination on the merits within 60 days of the completion of the original hearing.(7) Paragraph (4) of this subdivision shall not apply where the suspension or revocation of a billing agent is based upon the conviction for any crime involving fraud, abuse of the Medi-Cal program, or suspension from the federal Medicare or medicaid programs, or where the billing agent has entered into a settlement in lieu of conviction for fraud or abuse in any government program, within the previous 10 years. In those instances, suspension or revocation shall be automatic and not subject to administrative appeal or hearing. In those instances, the director shall send each provider utilizing the services of the billing agent written notice of the automatic suspension or revocation of the billing agent. To the extent allowed by federal law, the director may waive any claims submission requirement to assist a provider in submitting or resubmitting claims to the Medi-Cal program when they are delayed because of a billing agent’s automatic suspension or revocation.(8) Notwithstanding Section 100171 of the Health and Safety Code, proceedings for the denial of the registration of a billing agent pursuant to this section shall be conducted in accordance with Section 14043.65. This subdivision shall not apply where the denial is based upon conviction of any crime involving fraud or abuse of the Medi-Cal program or the federal medicaid or Medicare programs, or exclusion by the federal government from the medicaid or Medicare programs. In this case, the denial shall be automatic and not subject to administrative appeal or hearing.(f) For purposes of this section, “billing agent” has the same meaning as defined in Section 14040.1.(g) As used in this section “provider” has the same meaning as defined in Section 14043.1.(Amended by Stats. 2000, Ch. 322, Sec. 15. Effective January 1, 2001.)