SF4604

Purpose

• Strengthen oversight of providers who offer medical and related services by adding mandatory compliance training, stricter enrollment and licensing procedures, and enhanced enforcement tools. The bill aims to ensure high-risk providers meet program rules, protect vulnerable populations, and improve accountability in how licenses are granted and renewed.

Key Provisions

• Expanded licensure requirements and due diligence

  • Applicants for licensure must be thoroughly evaluated, with the commissioner acting within 90 working days after a complete file is received.
  • Applications must identify all controlling individuals and designate an authorized agent; service on the authorized agent counts for all controlling individuals.
  • Applicants must disclose if they intend to receive public funding and may face monitoring or penalties if they do not comply with enrollment or licensing requirements.
  • Applications must include detailed information such as tax IDs, NPI/UMPI numbers, and, for organizations, governance documents and a full list of controlling individuals.
  • A program must have policies prohibiting abuse of prescription medications or impairment by chemicals, and must have a grievance procedure accessible to those served.

• Provider licensing hub and communication limits

  • The provider licensing and reporting hub will be used during licensing processes, and the commissioner may limit communications to the authorized agent or identified controlling individuals.

• Competence assessment and background checks

  • The commissioner may require applicants to demonstrate competence via a written examination (format to be determined by the commissioner).
  • Background studies will be required for controlling individuals, and there are specific disclosure requirements regarding background study status.

• High-risk provider enrollment training

  • Agencies applying to enroll as high-risk medical assistance providers must require all owners involved in day-to-day management and all managerial/supervisory employees to complete a mandatory compliance training before enrollment and before revalidation, with repeated training every three years.
  • New owners and new managerial staff must complete training within 30 days of taking on their roles.
  • Training topics include: program billing/documentation, enrollment requirements, provider program integrity (fraud prevention/detection/penalties), fair labor standards, workplace safety, and changes in service requirements. Format/content will be determined by the commissioner.

• Surety bonds for housing stabilization and recuperative care providers

  • Providers must furnish a surety bond for each business location as a condition of enrollment/reenrollment.
  • Bond amounts: $50,000 if annual MA revenue is $300,000 or less; $100,000 if MA revenue exceeds $300,000. Bonds are renewed annually and can be used to recover costs and fees.
  • Actions to recover on bonds must be brought within six years of the final agency decision.
  • Providers must ensure controlling individuals and employees complete annual vulnerable adult training and the required compliance training, and they must comply with habitability inspection requirements where applicable.

• Housing stabilization services and recuperative care reforms

  • Provider qualifications for housing stabilization services and recuperative care require pre-enrollment risk assessments, compliance with background study rules, and documentation of background study requests/results.
  • Providers must demonstrate housing stabilization service compliance and maintain surety bonds; the same annual training and habitability inspection requirements apply.

• Mandatory compliance training for currently enrolled high-risk providers

  • Providers enrolled before January 1, 2027 must complete initial compliance training by January 1, 2028.
  • Some providers (e.g., PCA and CFSS agencies with prior approved training) are exempt from the initial training deadline but must repeat training before revalidation.

• Licensing timeline and renewals

  • Licenses may be issued for up to two years if certain observations or conditions exist.
  • A license will include the holder’s name, address, license type, service, capacity, expiration date, and any special conditions.
  • The commissioner may suspend, revoke, or impose contingencies on licenses, including immediate removal orders for disqualified individuals.
  • Licenses generally expire at 12:01 a.m. on the day after the stated expiration date; programs must be reissued a license to continue operating.

• Denial, notice, and appeal

  • The commissioner can deny applications for various reasons (e.g., incomplete applications, noncompliance, disqualifications, or history of violations).
  • Denial notices must include reasons, and applicants have a right to a contested case hearing and to appeal within specified timeframes.

• Coordination and jurisdiction

  • The commissioner may coordinate data sharing with the department of Children, Youth, and Families, and respect tribal licensing jurisdiction when applicable.

• Repeals and appendices

  • Repeals are enacted for certain older housing stabilization and related enrollment sections, replacing them with the new enrollment, bond, and training requirements.
  • An appendix lists the repealed statutes.

Significant Changes to Existing Law

• Introduction of mandatory, board-approved compliance training for all high-risk providers and, for new owners/managers, within strict timeframes.
• Addition of a provider licensing hub as a central component of enrollment and licensing processes.
• Requirement of surety bonds for housing stabilization and recuperative care providers, with specific bond amounts based on annual MA revenue.
• Expanded background study and risk assessment requirements for controlling individuals and provider ownership.
• Clear, structured process for license denial, renewal, probation, and potential revocation, including immediate removal provisions when necessary.
• Repeal of some older housing stabilization enrollment provisions and incorporation of them into the new framework.

Implementation & Dates

• Effective enrollment/compliance requirements begin January 1, 2027.
• Initial mandatory compliance training deadlines for currently enrolled high-risk providers: January 1, 2028 (with certain exceptions for providers who previously completed related training).
• Ongoing training required every three years for owners/managers and supervisors.
• New owners/managers must complete training within 30 days of taking on their role.
• Repeals take effect as part of the overall update to housing stabilization and recuperative care sections.

Affected Entities

• Agencies applying for or currently enrolled as high-risk medical assistance providers.
• Housing stabilization services providers.
• Recuperative care providers.
• Administrators, owners, managing directors, and supervisory staff within affected agencies.
• Tribal licensing authorities (in relation to jurisdiction).
• The provider licensing and reporting hub users and administrators.

Relevant Terms - high-risk providers - compliance training - medical assistance provider - provider enrollment hub - background study - preenrollment risk assessment - authorized agent - controlling individuals - surety bond - housing stabilization services - recuperative care services - vulnerable adult training - habitability inspection - license renewal and revival - license denial and appeal - preauthorization/documentation requirements - NPI and UMPI numbers - DBA (doing business as) names - preenrollment risk assessment - provider program integrity - enrollment requirements - bonds and recovery of costs - licensing timeline and temporary licenses - tribal licensing jurisdiction