California LEAs Waiting for Guidance on Medi-Cal Provider Screening and Enrollment

The Provider Enrollment Division (PED) of the California Department of Health Care Services (DHCS) held stakeholder meetings on March 28 and 29 to discuss changes to screening and enrollment requirements for Medi-Cal providers. The department’s Safety Net Financing Division (SNFD) was in attendance, as was Paradigm, to highlight the unique needs of the state’s school health providers that are reimbursed through the Local Educational Agency (LEA) Billing Option program.

During the next year, California’s health policy makers will be implementing their interpretation of new federal requirements for Medicaid provider screening and enrollment. The requirements come from the Affordable Care Act (ACA), and of primary concern to schools are potential changes in the use of National Provider Identification (NPI) numbers.

Currently schools bill Medi-Cal for services through an organizational NPI number that is assigned to their LEA. The state has not yet announced whether next year each eligible school practitioner will also be required to individually register for an NPI.

The final Centers for Medicare and Medicaid Services (CMS) rule, as posted in the Federal Register, states, “State Medicaid agencies may delegate to State or local governmental agencies, such as public school districts, the responsibility to . . . assign unique provider identification numbers for claims identification” (CMS 6028-FC, page 5905). This stipulation appears to support the use of a unique practitioner identifier other than an NPI for claiming by schools.

Last week’s stakeholder meetings included a discussion of the unique position of school health practitioners within the broader spectrum of Medi-Cal providers. The following obstacles and possible solutions regarding the use of individual NPIs at schools were discussed at the stakeholder meetings.

Obstacle Solution(s) Discussed
For providers who do not bill for services who not bill for services but only order and refer, there will be a separate enrollment process for obtaining and NPI. The PED will strive to make this process as streamlined as possible, but the current method used a manual process.
Some school-based providers (such as health aides) are not eligible for NPIs. The PED reported that staff would look into the use of other identifiers for those individuals or possibly expand the list of providers eligible to apply for the ordering and referring NPI to include health aides, teachers, and other nonlicensed individuals
Some billable services in the LEA Billing Option program do not require an official order or referral from a licensed practitioner (e.g., nursing services and assessments). These services, which may be requested by a parent, teacher, or nurse, may nevertheless be described as being referredordered within the LEA program. A DHCS legal representative suggested that in the case of LEAs, this may be a terminology issue — what is traditionally considered ‘referring’ or ‘referrals’ in the LEA Billing Option program (which may be more akin to a ‘request of services’ and therefore not subject to the new regulations).


Additional topics covered at the stakeholder meetings included provider application fees and screening providers for different levels of fraud and abuse risk. The following issues were discussed or clarified during the meetings.

  • LEAs may be excluded from having to pay the provider application fee because they are considered nonphysician practitioners. When asked about school nurses, however, who are considered neither physicians nor nonphysicians, a PED representative stated that the application fee could apply to individual providers. PED will look further into this matter.
  • The categorical risk levels for providers are limited, moderate, and high, and the state, rather than individual organizational providers or clinics, is responsible for tracking the status of providers. The state is also responsible for alerting the appropriate organizations if a false claim or allegation of fraud has been made.
  • The discussion of risk levels included several points of interest for schools. Nonphysician practitioners (a category that does not include nurses) are designated as having limited categorical risk. Screening procedures for this risk level include license verifications and database checks.
  • Physical Therapists (individuals and groups) are designated as having moderate categorical risk, although individual PTs practicing in a school environment may be assigned a limited categorical risk association. Screening procedures for moderate risk include on-site inspections in addition to license verifications and database checks.
  • The high-risk criterion of having an “existing Medicaid overpayment” requires a credible allegation of fraud that has been acted upon by the DHCS or a finding of liability by a superior court. For example, this measure would not include Medicaid overpayments resulting from the Cost and Reimbursement Comparison Schedule (CRCS) process. The PED will specify this exception in its final regulation. Additionally, criminal background checks, including fingerprinting, which is required for high-risk practitioners, are not likely to be required for LEA providers.

Once changes for Medi-Cal provider screening and enrollment have been finalized, California’s Department of Health Care Services (DHCS) plans to codify them through two measures: 1) issuing an amendment to California’s state Medicaid plan and 2) proposed legislation (SB 1529, Alquist) to be amended and take effect by January 2013.

Paradigm continues to keep in touch with the Provider Enrollment Division, whose staff have expressed their intention to follow up the stakeholder meetings with subgroup meetings to address specific provider issues. To date, no further meetings have been scheduled.

Related Information

Read the proposed text of SB 1529, Alquist…

Read the final federal regulation, CMS 6028-FC…



As part of the implementation of the provider integrity and anti-fraud provisions of health care reform, regulations establishing new state guidelines for screening and enrolling Medicaid providers were put into effect following the publication of CMS Rule 6028 in February 2011.

States had been given until March 2012 to interpret and implement changes to policies relating to existing Medicaid providers such as LEAs that had already been participating in the LEA Billing Option program. The deadline for implementing guidelines for screening and enrolling new providers was March 25, 2011.