BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: SB 123
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|Author: |Liu |
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|Version: |April 6, 2015 Hearing |
| |Date: April 22, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Lynn Lorber |
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Subject: Superintendent of Public Instruction: report:
School-Based Medi-Cal ????..Administrative Activities program
NOTE: This bill has been referred to the Committees on
Education and Health. A "do
pass" motion should include referral to the
Committee on Health.
SUMMARY
This bill requires the Superintendent of Public Instruction to
review and prepare recommendations relative to the
administration and oversight of the School-Based Medi-Cal
Administrative Activities program.
BACKGROUND
The School-Based Medi-Cal Administrative Activities (SMAA)
program provides federal reimbursements to local educational
agencies for the federal share (50%) of certain costs for
administering the Medi-Cal program. Those activities include:
outreach and referral, facilitating the Medi-Cal application,
arranging non-emergency/non-medical transportation, program
planning and policy development, and Medi-Cal administrative
activities claims coordination.
The federal Centers for Medicare and Medicaid Services
administers the SMAA program at the federal level, and the
California Department of Health Care Services (DHCS) administers
the SMAA program for the State.
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Current law:
1. Authorizes DHCS to contract with each participating
local governmental agency (LGA) or each local educational
consortium (LEC) to assist with the performance of
administrative activities.
2. Requires DHCS to deny the claim if it determines that
the certification is not adequately supported, or does not
otherwise comply with federal requirements.
3. Authorizes each participating LGA or LEC to subcontract
with private or public entities to assist with the
performance of administrative activities.
(Welfare and Institutions Code § 14132.47)
ANALYSIS
This bill requires the Superintendent of Public Instruction
(SPI) to review and prepare specific recommendations relative to
the administration and oversight of the School-Based Medi-Cal
Administrative Activities program. Specifically, this bill:
1. Requires the SPI to review and prepare specific
recommendations relative to the administration and
oversight of the School-Based Medi-Cal Administrative
Activities (SMAA) program.
2. Requires a report containing the recommendations to be
submitted to the Legislature and the Governor by July 1,
2016.
3. Requires the SPI's report to consider the report that is
expected to be issued by the State Auditor in 2015, and
requires the report to include but not be limited to, an
evaluation of all of the following:
A. The appropriate state agency or agencies to
administer the SMAA program.
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B. Oversight of the administration of the
program, including oversight of the state agency,
local governmental agencies, and local educational
consortia.
C. The structure of the SMAA program and the role
of each entity, including the local governmental
agencies and local educational consortia, how the
structures and roles vary across the state, and the
efficiency of those structures and roles in providing
funds to local educational agencies.
D. The relationships, interactions, and
communications state agencies have with the federal
Centers for Medicare and Medicaid Services (CMS), and
the process used to disseminate information from the
CMS to local educational agencies.
E. The process for reimbursing claims submitted
by local educational agencies, including the amount
reimbursed compared to the amount claimed, the time
between submission of a claim and the reimbursement of
that claim, and how the claim and reimbursement
process varies across the state.
F. The purposes for which local educational
agencies use SMAA program funds.
G. The relationship between local governmental
agencies (LGAs) or local educational consortia (LECs)
and the private or public entities that have been
subcontracted to assist with the performance of
administrative activities.
H. The rates charged by the local governmental
agency (LGA) and local educational consortium (LEC),
how those rates vary across the state, and how rates
are determined.
I. The ability of a local educational agency to
contract with a LGA or a LEC of its choosing.
J. The feasibility of convening a local
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educational agency advisory body for the purposes of
providing technical assistance to local educational
agencies and communicating with the administering
state agency.
AA. The extent to which the state is maximizing
federal funds available for the SMAA program.
BB. How capacity to operate the SMAA program can
be built within local educational agencies.
1. Requires the Department of Health Care Services to
annually post on its website the administrative fee
percentage charged by each LGA or LEC.
2. Uses existing definitions of "local governmental
agency," "local educational agency," and "local educational
consortia" in Welfare and Institutions Code provisions
relative to the School-Based Medi-Cal Administrative
Activities (SMAA) program, as follows:
A. "Local educational agency" as the governing
body of any school district or community college
district, the county office of education, a state
special school, a California State University campus,
or a University of California campus, that
participates under the Administrative Claiming process
as a subcontractor to the local educational consortium
in its service region.
B. "Local educational consortium" means a local
agency that is one of the service regions of the
California County Superintendent Educational Services
Association.
C. "Local governmental agency" as a county,
chartered city, Native American Indian tribe, tribal
organization, or subgroup of a Native American Indian
tribe or tribal organization, under contract with the
department
STAFF COMMENTS
1. Need for the bill. According to the author, "The federal
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Centers for Medicare and Medicaid Services (CMS) conducted
audits of California's School-Based Medi-Cal Administrative
Activities (SMAA) program in recent years. Two of the
three local educational agencies audited were found out of
compliance, yet lax oversight and guidance by the
Department of Health Care Services (DHCS) seem to have led
to the school district level issues. A letter from CMS to
DHCS dated June 2012 and a CMS Financial Management Report
dated April 2013 found the DHCS and the local educational
consortia and the local governmental agencies had not
provided appropriate SMAA program oversight and had
inadequate internal controls. As a result, Centers for
Medicare and Medicaid Services (CMS) began deferring
payments in 2012 for nearly all local educational agencies.
Currently over 800 local educational agencies are owed
hundreds of millions of dollars on unpaid invoices going
back as far as 2009."
2. The rules keep changing. The audit of three local
educational agencies conducted by CMS determined that the
entire State's School-Based Medi-Cal Administrative
Activities (SMAA) claims did not comply with the claiming
plan approved by CMS. CMS deferred California's SMAA
claims until additional documentation was provided,
including the requirement that local educational agencies
provide certification of activities performed to support
submitted invoices. In addition, CMS required Department
of Health Care Services (DHCS) to submit a revised time
study methodology and statewide claiming plan.
http://www.medicaidforeducation.org/filelibrary-name/webcomm
ittee/PDF/SMAA_Ltr_to_CA_Final.pdf
A. Accounting methodologies were subsequently
implemented as follows:
A new Reasonableness Test Criteria was instituted by DHCS
in October 2013.
B. A new settlement and Random Moment in Time Survey
was offered by CMS October 7, 2014.
http://www.dhcs.ca.gov/provgovpart/Documents/ACLSS/SMAA
/SMAA_Deferral_Resolution_CMS.pdf
C. The DHCS agreed to the settlement on October 14,
2014.
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http://www.dhcs.ca.gov/provgovpart/Documents/ACLSS/SMAA
/SMAA_SettlementProposal.pdf
D. Revisions resulting in a February 20 settlement
proposal.
http://www.dhcs.ca.gov/provgovpart/Documents/ACLSS/SMAA
/CMCS_letter_to_California_0315_2.pdf
3. Current status. Beginning April 1, 2015, the structure of
reimbursing claims is as follows:
A. Claims under $25,000 will be reimbursed at 90% of
the invoice.
B. Claims between $25,001-$50,000, a choice of:
(1) Accepting reimbursement at 75% of the
claimed amount with backcasting, or:
(2) Accepting reimbursement of either 75%
of the claimed amount or a flat $25,000,
whichever is higher.
C. Claims over $50,000 will be reimbursed at 40% of
the claimed amount with backcasting.
Backcasting involves the application of the current
reimbursement structure to prior claims that were submitted
using a different reimbursement structure.
4. Audit request. The author requested an audit of the
School-Based Medi-Cal Administrative Activities (SMAA)
program, which was approved by the Joint Legislative Audit
Committee in August 2014. This bill requires an evaluation
of additional and current information; there is marginal
overlap between the scope of the audit and the evaluation
required by this bill. For example, the audit requested
information relative to how other states administer this
program and information specific to the accounting
methodology that is no longer utilized, as well as
information specific to the local educational agency
Medi-Cal billing option. This bill seeks an evaluation of
the local governmental agency (LGA) and local educational
consortium (LEC) structure, addressing concerns of local
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educational agencies regarding the ability for LGAs and
LECs to change accounting codes and claim amounts, and deny
claims, submitted by local educational agencies, the lack
of a prohibition against individuals serving on an LGA or
LEC and being employed by the subcontractor hired by the
LGA or LEC, and the lack of clear rationale for
administrative rates charged by LGAs and LECs.
5. Related and prior legislation.
PRIOR LEGISLATION
AB 1955 (Pan, 2014), among other things, required DHCS and
the California Department of Education (CDE) to cooperate
and coordinate efforts in order to maximize receipt of
federal financial participation under the Administrative
Claiming process, and required DHCS, through an interagency
agreement with the CDE, to provide technical advice and
consultation to local educational agencies participating in
a demonstration project established by the bill, in order
to meet requirements to certify and bill valid claims for
allowable activities under the Administrative Claiming
process. AB 1955 was held on the Assembly Appropriations
Committee's suspense file.
SUPPORT
California School-Based Health Alliance
National Association of Social Workers, California Chapter
Riverside County Superintendent of Schools
OPPOSITION
None received.
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