BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2608| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 2608 Author: Bonilla (D) Amended: 6/28/12 in Senate Vote: 21 SENATE HEALTH COMMITTEE : 9-0, 6/20/12 AYES: Hernandez, Harman, Alquist, Anderson, Blakeslee, De León, DeSaulnier, Rubio, Wolk SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/6/12 AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price, Steinberg ASSEMBLY FLOOR : 74-0, 5/30/12 - See last page for vote SUBJECT : Medi-Cal: local educational agency billing option SOURCE : Los Angeles Unified School District DIGEST : This bill makes permanent and expands provisions relating to program improvement activities in the Medi-Cal Local Billing Option (LBO) program, through which Local Educational Agencies (LEA) can draw down federal funding for health care services provided to Medi-Cal-eligible students, and requires money collected for administrative activities for program improvement activities be proportionately reduced from federal Medicaid payments to all participating LEAs so that no one LEA loses a disproportionate share of its Medicaid payment. CONTINUED AB 2608 Page 2 ANALYSIS : Existing law: 1.Establishes the Medi-Cal program, administered by DHCS, under which qualified low-income persons receive health care benefits. 2.Requires specified services provided by a LEA are covered Medi-Cal benefits, to the extent federal financial participation is available, are subject to utilization controls and standards adopted by DHCS, and are consistent with Medi-Cal requirements for physician prescription, order, and supervision. 3.Requires DHCS to make various LEA program improvement activities, including: A. Amending the Medicaid state plan with respect to the LBO for services by LEAs to ensure that schools are reimbursed for all eligible services that they provide that are not precluded by federal requirements; B. Eliminating and modifying state plan and regulatory requirements that exceed federal requirements when they are unnecessary; C. Consulting regularly with the Department of Education (DOE); representatives of urban, rural, large and small school districts; county offices of education, the local education consortium; and LEAs in order to assist DHCS in formulating the Medicaid state plan amendments; and D. Filing an annual report with the Legislature. 1.Requires LEA program improvement-related activities to be funded and staffed by proportionately reducing federal Medicaid payments allocable to LEAs. Prohibits the annual amount funded for program improvement activities from exceeding $1.5 million dollars. Requires funding received under this provision to derive only from federal Medicaid funds that exceed the baseline amount of LEA Medicaid billing option revenues for the 2000-01 fiscal AB 2608 Page 3 year (FY). 2.Requires, as part of the LEA program improvement activities, DHCS to file an annual report with the Legislature regarding LEA that includes a state-by-state comparison of school-based Medicaid total and per child eligible claims and federal revenues; a summary of DHCS activities, a listing of all school-based services, activities, and providers approved for reimbursement by the federal government in other state plans that are not approved in California; any barriers to LEA reimbursement that are not imposed by federal requirements; and a description of the actions that have been and will be taken to eliminate them. 3.Authorizes DHCS to enter into a sole source contract to comply with these program improvement requirements. 4.Sunsets the LEA program improvement activity-related provisions January 1, 2013. This bill: 1.Makes the LEA program improvement provisions permanent by eliminating the January 1, 2013, sunset date. 2.Eliminates a requirement that LEAs receive a baseline Medicaid funding amount (the amount LEAs received in the 2000-01 fiscal year) before federal Medicaid moneys can fund administrative activities related to program improvements. 3.Requires money collected for administrative activities for program improvements be proportionately reduced from Medicaid payments to all participating LEAs so that no one LEA loses a disproportionate share of its federal Medicaid payments. 4.Requires, as part of an existing report to the Legislature, DHCS to include an accounting of funds collected from federal Medicaid payments allocable to LEAs. Requires the report to detail amounts withheld from federal Medicaid payments to each participating LEA for the year. AB 2608 Page 4 5.Requires DHCS to collaborate with DOE to help ensure LEA compliance with state and federal Medicaid requirements and to help improve LEA participation in the Medi-Cal billing option for LEAs. Background LEA. The LEA Medi-Cal LBO Program was established in 1993 to provide federal financial participation (FFP) through Medicaid reimbursement to LEAs (school districts, county offices of education, community colleges, and university campuses) for health-related services provided by qualified medical practitioners to students who are enrolled in Medi-Cal. DHCS indicates school-based health services reimbursed by the LEA Program are primarily provided to students with disabilities receiving special education services through an Individualized Education Plan or Individualized Family Service Plan. LEAs pay for health-related services and are reimbursed for 50 percent of their costs through Medicaid FFP. LEA services are delivered either through the LEAs (which employ practitioners who provide the services on site) or through local contracted practitioners. LEAs must annually certify that the public funds expended for LEA services provided are eligible for FFP. Subject to specified conditions, LEA covered services can include the following: Health and mental health evaluations and health and mental health education; Medical transportation; Nursing services; Occupational therapy; Physical therapy; Physician services; Mental health and counseling services; School health aide services; Speech pathology services; Audiology services; and Targeted case management services for children with an individualized education plan or an individualized family service plan. AB 2608 Page 5 In 2009-10, there were 391,919 LEA claims, total federal Medicaid reimbursement was $220 million and average reimbursement per claim was $122. Medi-Cal reimbursement in the LEA Program has increased by 84 percent, growing from $59.6 million in FY 2000-01 to $109.9 million in FY 2008-09. Funding for LBO administrative costs in LEA . Funding for DHCS administrative activities and contractor costs are currently governed by both law and practice through the DHCS Provider Participation Agreement. Administrative funding is as follows: DHCS administrative and processing services costs related to the management of the LEA Medi-Cal LBO, not to exceed one percent of the amount payable to the LEA submitting the claim. This fee is in the Provider Participation Agreement and is not codified. DHCS audit administration and associated audit resources costs to ensure fiscal accountability of LEA Medi-Cal LBO and to comply with the Medicaid State Plan, not to exceed one percent of the amount payable to the LEA submitting the claim. The total amount collected from this fee is capped at $650,000 through the 2010-11 Budget Act. DHCS costs required to fund and support the program improvement activities in existing law using a contractor, not to exceed a program wide amount of $1.5 million annually. Existing law specifies this fee is collected on amounts in excess of a 2000-01 baseline amount ($60 million in practice) received by LEAs. This fee is capped in statute at $1.5 million and is collected through a 2.5 percent fee against individual LEA paid claim amounts. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: LEAs: Millions of dollars in additional federal funds reimbursing LEAs for 50% of specified expenses they AB 2608 Page 6 mandatorily incur under existing law. SUPPORT : (Verified 8/8/12) Los Angeles Unified School District (source) ARGUMENTS IN SUPPORT : This bill is sponsored by the LAUSD to continue and improve the LEA Medi-Cal LBO program improvement activities set to expire in 2013. LAUSD states that almost $110 million in federal funds going to California schools to support essential health and mental health related services to students are provided through the LBO, and since 2001, LAUSD has received $120 million of federal funding through the program. LAUSD states this bill makes a number of improvements to the LBO to generate millions of dollars statewide for necessary school transportation for students with disabilities by requiring state rules and regulations that are overly restrictive be better aligned with federal rules that allow for reimbursement for transportation of students with disabilities. Additionally, LAUSD states greater transparency and accountability in the work performed by DHCS is needed, as DHCS is able to withhold certain amounts from the federal reimbursement dollars that go to schools in order to offset DHCS administrative costs. LAUSD argues proper accounting for these withhold amounts ensures that schools are receiving the federal money they are due. ASSEMBLY FLOOR : 74-0, 5/30/12 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Dickinson, Eng, Fong, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Wagner, Wieckowski, Williams, Yamada, John A. Pérez AB 2608 Page 7 NO VOTE RECORDED: Davis, Donnelly, Feuer, Fletcher, Fuentes, Valadao CTW:n 8/8/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****