Welf. & Inst. Code, § 11466.01

(a) Commencing January 1, 2017, a provisional rate shall be set for both of the following providers:

(1) A new short-term residential therapeutic program provider.

(2) A new foster family agency provider.

(b) (1) The provisional rate shall be subject to terms and conditions, including the duration of the provisional period, set by the department.

(2) For a provider described in subdivision (a), a provisional rate may be granted for a period of up to 24 months from the date the provider’s license was issued.

(c) In determining whether to grant, and upon what conditions to grant, a provisional rate, the department shall consider factors including all of the following:

(1) Any licensing history for any license with which the program, or its directors or officers, have been associated.

(2) Any financial, fiscal, or compliance audit history with which the program, or its directors or officers, have been associated.

(3) Outstanding civil penalties or overpayments with which the program, or its directors or officers, have been associated.

(4) Any violations of state or federal law.

(d) In determining whether to continue, and upon what conditions to continue, a provisional rate, the department shall consider those factors specified in subdivision (c), as well as compliance with the terms, conditions, and requirements during the provisional period.

(e) In determining whether, at the end of the provisional rate period or thereafter, to grant a rate and whether to impose or continue, and upon what conditions to impose or continue, a probationary rate the department shall consider the factors specified in subdivision (c).

(f) The department shall establish an administrative review process for determinations, including denial, rate reduction, probation, and termination of the provisional and probationary rates. This process shall include a departmental review, corrective action, and a protest with the department. Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), this process shall be disseminated by written directive pending the promulgation of regulations.

(g) (1) (A) For the purposes of this section, a “provisional rate” is a prospective rate given to a provider described in subdivision (a) based on an assurance to perform in accordance with terms and conditions attached to the granting of the provisional rate.

(B) For the purposes of this section, a “probationary rate” is a rate upon which limitations and conditions are imposed as a result of violations of terms, conditions, or state or federal law, including those set forth in subdivisions (c) and (d).

(2) (A) At the conclusion of a provisional rate, a probationary rate may be imposed, at the discretion of the department, if additional oversight is deemed necessary based on the provider’s performance during the provisional rate period.

(B) At any time, a rate may become a probationary rate if additional oversight is deemed necessary based on the provider’s performance in accordance with terms and conditions attached to the granting or maintenance of its rate.

(C) A probationary rate may be accompanied by a rate reduction.