Welfare and Institutions Code section 14016
(a)
The county in which the person resides, except as specified in subdivision (d), shall determine the eligibility of each person pursuant to Sections 14005.1, 14005.4, and 14005.7 and Article 4.4 (commencing with Section 14140), except that the department may contract with the federal Social Security Administration for the determination of Medi-Cal eligibility of persons eligible under Title XVI of the Social Security Act. Upon termination of such assistance, the county shall determine whether the person remains eligible for Medi-Cal coverage under one of these sections.(b)
The department shall institute an eligibility quality control program, to verify the eligibility determination of a sample of persons in each county granted Medi-Cal eligibility under Section 14005.4, 14005.7, or 14005.8 or Article 4. 4 (commencing with Section 14140).(c)
A review period shall be defined as one year and shall coincide with the federal fiscal year. The department shall draw a random sample of cases for each period. The random sample shall be drawn to ensure a minimum number of cases reviewed in each county in each review period according to the following:(1)
All cases shall be sampled in any county with less than 50 Medi-Cal cases.(2)
Fifty cases in any county with greater than 0.01 percent and less than or equal to .50 percent of the Medi-Cal cases.(3)
Seventy-five cases in any county with greater than .50 percent and less than or equal to 1 percent of the Medi-Cal cases.(4)
One hundred cases in any county with greater than 1 percent and less than or equal to 3 percent of the Medi-Cal cases.(5)
One hundred twenty-five cases in any county with greater than 3 percent and less than or equal to 10 percent of the Medi-Cal cases.(6)
Six hundred fifty cases in any county with greater than 10 percent of the Medi-Cal cases.(d)
When family members maintain separate residences, but eligibility is determined as a single unit because of the provisions of Section 14008, the county in which the parent or parents reside shall determine the eligibility for the entire unit.(e)
In administering the provisions of law and regulations related to eligibility determination the director shall impose such fiscal penalties as provided by this section to assure adequate county administrative performance.(f)
The director shall hold counties financially liable for payments made on behalf of ineligible persons or persons with an incorrect spend down of excess income. When a sample case is found to include an ineligible person or a person with an understated spend down of excess income, written notification shall be sent to the county department that describes the error and requests a written response within two weeks. The county shall indicate whether it agrees or disagrees with the findings. If the county disagrees, the department shall reevaluate the error findings, taking into consideration any additional facts contained in the county’s response. The department shall again notify the county of the department’s findings. If the county continues to disagree with the error findings, the county may appeal to the Chief of the Medi-Cal Policy Division, requesting that the department review the case and render a final decision. The director may reduce or waive the fiscal liability of a county if the department is unable to meet the minimum sample required, as defined in subdivision (c), or if an individual county experienced a natural disaster, job actions, or other occurrences that impacted the findings in an individual county as determined by the director.(g)
The department shall utilize the methodology detailed in this subdivision to establish counties’ fiscal penalties. The department shall determine each county’s case error rate for each review period by dividing the number of completed case reviews in that county found in error by the number of case reviews in that county. State caused errors shall be determined by the department and shall not be included in this calculation. Case error rates shall be arrayed from highest to lowest. From this array, the department shall determine the percentage of counties liable as follows:(1)
The 60 percent of counties with the highest case error rates shall be liable if the state’s dollar error rate exceeds the federal standard by 0.01 percent to 1 percent.(2)
The 70 percent of counties with the highest case error rates shall be liable if the state’s dollar error rate exceeds the federal standard by greater than 1 percent and less than or equal to 2 percent.(3)
The 80 percent of counties with the highest case error rates shall be liable if the state’s dollar error rate exceeds the federal standard by greater than 2 percent and less than or equal to 3 percent.(4)
The 90 percent of counties with the highest case error rates shall be liable if the state’s dollar error rate exceeds the federal standard by greater than 3 percent and less than or equal to 4 percent.(5)
All counties shall be liable if the state’s dollar error rate exceeds the federal standard by greater than 4 percent.(h)
When a county welfare department contravenes state eligibility processing regulations and written instructions in a way that produces increased program benefits or administrative expenses but doesn’t result in an increase in the eligibility dollar error rate, the director shall recoup from that county the additional administrative or program benefit costs above those that would have been incurred had that county not contravened the established state eligibility processing regulations and written instructions. This section shall not be construed to interfere with the rights of counties to out-station eligibility staff.(i)
Any penalties imposed under this system shall be collected through direct repayment from liable counties rather than through any reduction in funds otherwise due to counties.
Source:
Section 14016, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=WIC§ionNum=14016. (accessed Apr. 24, 2025).