BILL NUMBER: SB 231 CHAPTERED 10/10/01 CHAPTER 655 FILED WITH SECRETARY OF STATE OCTOBER 10, 2001 APPROVED BY GOVERNOR OCTOBER 9, 2001 PASSED THE SENATE SEPTEMBER 13, 2001 PASSED THE ASSEMBLY SEPTEMBER 12, 2001 AMENDED IN ASSEMBLY SEPTEMBER 10, 2001 AMENDED IN ASSEMBLY AUGUST 30, 2001 AMENDED IN ASSEMBLY AUGUST 20, 2001 AMENDED IN ASSEMBLY JULY 14, 2001 AMENDED IN SENATE MAY 7, 2001 AMENDED IN SENATE APRIL 16, 2001 INTRODUCED BY Senator Ortiz (Coauthor: Assembly Member Goldberg) FEBRUARY 14, 2001 An act to add Section 14115.8 of the Welfare and Institutions Code, relating to Medi-Cal. LEGISLATIVE COUNSEL'S DIGEST SB 231, Ortiz. Medi-Cal: local education agency services. Existing law provides for the Medi-Cal program, administered by the State Department of Health Services, under which qualified low-income persons are provided with health care services. The Medi-Cal program is partially governed and funded as part of the federal medicaid program. Under existing law, one method by which services may be provided is through the provision of services on schoolsites. Local education agencies are permitted to bill the Medi-Cal program for these services. This bill would require the department to amend this state's medicaid plan to accomplish various goals aimed at enhancing Medi-Cal services provided on schoolsites, and access by students to these services. It would require the department to consult with specified entities to assist in formulating these state plan amendments. The bill would also, until January 1, 2006, require the department to compare annually school-based medicaid systems in comparable states and related activities, and to file an annual report with the Legislature on medicaid reimbursements for services for students. The bill, until January 1, 2006, would require money collected as a result of reduction in federal Medi-Cal payments allocable to local educational agencies to be deposited in the Local Agency Medi-Cal Recovery Account, which the bill would create, and used for the support of the department. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. It is the intent of the Legislature that the gap in per student recovery for medicaid reimbursements for services by local education agencies between California and the three states recovering the most per student from the federal government be reduced as rapidly as possible. In order to accomplish this intent, the Legislature finds that the activities of the State Department of Health Services, required by this act, are a state priority. Accordingly, to accomplish all of the tasks required by this act it is recognized that additional staff, contract or otherwise, may be needed initially. Nothing in this act shall be interpreted to affect the Medi-Cal Administrative Activities program. SEC. 2. Section 14115.8 is added to the Welfare and Institutions Code, to read: 14115.8. (a) (1) The department shall amend the medicaid state plan with respect to the billing option for services by local education agencies, to ensure that schools shall be reimbursed for all eligible services that they provide that are not precluded by federal requirements. (2) The department shall examine methodologies for increasing school participation in the Medi-Cal billing option for local education agencies so that schools can meet the health care needs of their students. (3) The department, to the extent possible shall simplify claiming processes for local education agency billing. (4) The department shall eliminate and modify state plan and regulatory requirements that exceed federal requirements when they are unnecessary. (b) If a rate study for the LEA Medi-Cal billing option is completed pursuant to Section 52 of Chapter 171 of the Statutes of 2001, the department, in consultation with the entities named in subdivision (c), shall implement the recommendations from the study, to the extent feasible and appropriate. (c) In order to assist the department in formulating the state plan amendments required by subdivisions (a) and (b), the department shall regularly consult with the State Department of Education, representatives of urban, rural, large and small school districts, and county offices of education, the local education consortium, local education agencies, and the local education agency technical assistance project. It is the intent of the Legislature that the department also consult with staff from Region IX of the federal Centers for Medicare and Medicaid Services, experts from the fields of both health and education, and state legislative staff. (d) Notwithstanding any other provision of law, or any other contrary state requirement, the department shall take whatever action is necessary to ensure that, to the extent there is capacity in its certified match, a local education agency shall be reimbursed retroactively for the maximum period allowed by the federal government for any department change that results in an increase in reimbursement to local education agency providers. (e) The department may undertake all necessary activities to recoup matching funds from the federal government for reimbursable services that have already been provided in the state's public schools. The department shall prepare and take whatever action is necessary to implement all regulations, policies, state plan amendments, and other requirements necessary to achieve this purpose. (f) The department shall file an annual report with the Legislature that shall include at least all of the following: (1) A copy of the annual comparison required by subdivision (i). (2) A state-by-state comparison of school-based medicaid total and per eligible child claims and federal revenues. The comparison shall include a review of the most recent two years for which completed data is available. (3) A summary of department activities and an explanation of how each activity contributed toward narrowing the gap between California' s per eligible student federal fund recovery and the per student recovery of the top three states. (4) A listing of all school-based services, activities, and providers approved for reimbursement by the federal Centers for Medicare and Medicaid Services in other state plans that are not yet approved for reimbursement in California's state plan and the service unit rates approved for reimbursement. (5) The official recommendations made to the department by the entities named in subdivision (c) and the action taken by the department regarding each recommendation. (6) A one-year timetable for state plan amendments and other actions necessary to obtain reimbursement for those items listed in paragraph (4). (7) Identify any barriers to local education agency reimbursement, including those specified by the entities named in subdivision (c), that are not imposed by federal requirements, and describe the actions that have been, and will be, taken to eliminate them. (g) (1) These activities shall be funded and staffed by proportionately reducing federal Medi-Cal payments allocable to local educational agencies for the provision of benefits funded by the federal Medi-Cal program under the billing option for services by local educational agencies specified in this section. Moneys collected as a result of the reduction in federal Medi-Cal payments allocable to local educational agencies shall be deposited into the Local Education Agency Medi-Cal Recovery Account, which is hereby established in the Special Deposit Fund established pursuant to Section 16370 of the Government Code. These funds shall be used only to support the department to meet all the requirements of this section. As of January 1, 2006, unless the Legislature enacts a new statute or extends the date beyond January 1, 2006, all funds in the Local Education Agency Medi-Cal Recovery Account shall be returned proportionally to all local educational agencies whose federal Medi-Cal funds were used to create this account. The annual amount funded shall not exceed one million five hundred thousand dollars ($1,500,000). (2) Commencing with the 2003-04 fiscal year, funding received pursuant to paragraph (1) shall derive only from federal medicaid funds that exceed the baseline amount of local educational agency medicaid billing option revenues for the 2000-01 fiscal year. (h) (1) The department may enter into a sole source contract to comply with the requirements of this section. (2) The level of additional staff to comply with the requirements of this section, including, but not limited to, staff for which the department has contracted for pursuant to paragraph (1), shall be limited to that level that can be funded with revenues derived pursuant to subdivision (g). (i) The activities of the department shall include all of the following: (1) An annual comparison of the school-based medicaid systems in comparable states. (2) Efforts to improve communications with the federal government, the State Department of Education, and local education agencies. (3) The development and updating of written guidelines to local education agencies regarding best practices to avoid audit exceptions, as needed. (4) The establishment and maintenance of a local education agency friendly interactive Web site. (j) Subdivisions (e) to (i), inclusive, shall become inoperative on January 1, 2006.