BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 2608|
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                                 THIRD READING


          Bill No:  AB 2608
          Author:   Bonilla (D)
          Amended:  8/23/12 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 accounted for 
          reduced from federal Medicaid payments to all participating 
          LEAs so that no one LEA loses a disproportionate share of 
          its Medicaid payment.
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           Senate Floor Amendments  of 8/23/12 sunset the statutory LEA 
          transportation provisions made by the bill on January 1, 
          2018, or when regulations have been done, whichever is 
          later, and modify the requirements relating to an 
          accounting of funds.

           ANALYSIS  :    Existing law:

          1.Establishes the Medi-Cal program, administered by the 
            Department of Health Care Services (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 

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            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 
            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.

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          4.Exempts medical transportation for those eligible to be 
            billed under the LEA billing option from the following 
            specified Medi-Cal regulations:

             A.   The requirement that patients be transported in a 
               prone or supine position because the patient is 
               incapable of sitting for the period of time needed to 
               transport.

             B.   The requirement that the patient be transported in 
               a wheelchair or assisted to and from residence, 
               vehicle and place of treatment because of a disabling 
               physical or mental limitation.

             C.   The requirement that all litter van patients be 
               secured to a gurney by restraining belts while being 
               loaded, unloaded and transported, for students whose 
               medical or physician condition does not require the 
               use of a gurney.

             D.   The requirement that all wheelchair van patients be 
               secured to wheelchairs while being loaded, unloaded or 
               transported, for students whose medical or physical 
               condition does not require the use of a wheelchair.

          1.Sunset the transportation provisions of the bill on 
            January 1, 2018, or on the date the director of DHCS 
            executives make a declaration stating that regulations 
            implementing the provision described above have been 
            updated, whichever is later.

          2.Require, no later than July 1, 2013, and annually 
            thereafter, DHCS to make publicly accessible an annual 
            accounting of all funds collected by DHCS from federal 
            Medicaid payments allocable to LEAs, including but not 
            limited to, the funds withheld under a specified 
            provision of law that allows up to $1.5 million to be 
            withheld. Require the accounting to detail amounts 
            withheld from federal Medicaid payments to each 
            participating LEA for that year. Caps one-time costs for 
            the development of this accounting from exceeding 
            $250,000.


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          3.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.


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          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 
            mandatorily incur under existing law.

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           SUPPORT  :   (Verified  8/24/12)

          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
          NO VOTE RECORDED:  Davis, Donnelly, Feuer, Fletcher, 
            Fuentes, Valadao

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          CTW:n  8/24/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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