California Medi-Cal Enrollment Appeals: An Uphill Battle but an Essential Tool

In our practices, we are seeing an increasing number of denials or de facto denials of Medi-Cal provider enrollments. The consequences of a Medi-Cal enrollment denial can be quite serious. First, a provider may not receive reimbursement for services provided to Medi-Cal beneficiaries when it is not an enrolled provider. Second, it takes a long time to advance applications through the California Department of Health Care Services (“DHCS”) enrollment application review process (in some instances nine months or even longer), so re-filing can mean an extended period of no reimbursement. Third, a provider or other providers that are affiliated with the denied provider may have to disclose the denial, however innocuous, on enrollment applications in the Medicare and Medicaid programs forever. Failure to do so may itself cause additional denials in the future, so it is also important to keep track of the denial.

Furthermore, it is true that while some denials are legitimate, others occur due to mistakes by DHCS during the review process, particularly when the matter is referred for comprehensive review and the provider is subject to a site visit. In our experience, the team that conducts the site visits has a discrete list of items to request, and if things are unclear after that list is responded to, a denial may occur.  Interestingly, Assembly Member Baines introduced AB 1122 this year in the California legislature to try to make the enrollment process more objective in its application. This bill is still pending in the California legislature.

Medi-Cal Enrollment Appeals

There is a Medi-Cal enrollment appeal process available to try to correct errors in the Medi-Cal provider enrollment process. When this process is available, it can have a strategic advantage of being quicker than re-submitting an enrollment application. In addition, if the appeal is successful, the provider would avoid needing to forever track the denial for reporting purposes in the future, because the denial could be “undone.” 

The enrollment appeals process is governed by California’s Welfare and Institutions Code, as well as Title 22, Division 3 of California’s Code of Regulations. Upon denial, applicants receive written notice from DHCS, as well as information about filing an appeal. Applicants then have sixty (60) days from the notice to file a written appeal that includes all pertinent documents and relevant appeals. From there, DHCS has 90 days to issue a final decision about whether the denial will be upheld, continued, or reversed, in whole or in part. (Welfare and Institutions Code section 14043.65.)

It is critically important for applicants to put forward the strongest possible appeal package at this stage, because DHCS’s decision on the appeal is final in nearly all respects. Unlike other agency decisions, there is no additional level of agency review, there is no opportunity to apply for a hearing on the merits, and judicial review through the courts is only available in extremely narrow circumstances.

In our experience, the appeals process favors DHCS because it is essentially calls for the agency to review its own decision making. Nevertheless, there may be good reasons that a provider may want to use this tool to right some of the wrongs in the Medi-Cal provider enrollment process, especially where there is strong evidence of a procedural error in the denial.