BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 123
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|AUTHOR: |Liu |
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|VERSION: |April 6, 2015 |
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|HEARING DATE: |April 29, 2015 | | |
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|CONSULTANT: |Scott Bain |
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SUBJECT : Superintendent of Public Instruction: report:
School-Based Medi-Cal Administrative Activities program
SUMMARY :
Requires the Superintendent of Public Instruction to review and
prepare specific recommendations relative to the administration
and oversight of the School-Based Medi-Cal Administrative
Activities program, and requires the Superintendent to submit a
report containing the specific recommendations to the
Legislature and the Governor by July 1, 2016. Requires the
Department of Health Care Services to annually post on its
Internet Web site the administrative fee percentage charged by
each local governmental agency or local educational consortium.
Existing law:
1.Establishes the Medi-Cal program, which is administered by the
Department of Health Care Services (DHCS), under which
qualified low-income individuals receive health care services.
2.Permits DHCS to contract with each participating local
governmental agency (LGAs) or each local educational consortia
(LECs) to assist with the performance of administrative
activities necessary for the proper and efficient
administration of the Medi-Cal program. This activity is known
as the Administrative Claiming process or School-Based
Medi-Cal Administrative Activities Program (SMAA), under which
LGAs and LECs certify to DHCS the total amount the LGA or LEC
expended on allowable administrative activities.
3.Requires each LEA agency that elects to participate in SMAA to
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submit claims through its LEC or LGA, but not both.
4.Requires each LEA participating as a subcontractor to a LEC to
comply with all requirements of the SMAA claiming process
established for LGAs.
5.Defines a LEA for purposes of SMAA 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 in the Administrative Claiming process as a
subcontractor to the LEC in its service region.
6.Permits a LGA or LEC to charge an administrative fee to any
entity claiming Administrative Claiming through that agency.
This bill:
1.Requires DHCS to annually post on its Internet Web site the
administrative fee percentage charged by each LGA or LEC.
2.Requires the Superintendent of Public Instruction to review
and prepare specific recommendations relative to the
administration and oversight of SMAA program. Requires a
report containing the specific recommendations to be submitted
to the Legislature and the Governor by July 1, 2016.
3.Requires the Superintendent's report to consider the
forthcoming report on SMAA program issued by the California
State Auditor in 2015, and to include, but not necessarily be
limited to, an evaluation of all of the following:
a. The appropriate state agency or agencies to
administer the SMAA program;
b. Oversight of the administration of the SMAA
program, including oversight of the state agency, LGA,
and LECs;
c. The structure of the SMAA program and role of
each entity, including the LGAs and LECs, how the
structures and roles vary across the state, and the
efficiency of those structures and roles in providing
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funds to LEAs;
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
federal CMS to LEAs;
e. The process for reimbursing claims submitted
by LEAs, 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 LEAs use program funds;
g. The relationship between LGAs or 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 LGAs and LECs, how
those rates vary across the state, and how rates are
determined;
i. The ability of a LEA to contract with a LGA or
a LEC of its choosing;
j. The feasibility of convening a LEA 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; and,
bb. How capacity to operate the program can be
built within LEAs.
4.Sunsets the report-related provisions of this bill on January
1, 2021.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, SMAA typically
supports school nurses, psychologists, health aides, family
resource centers and other activities ensuring that
California's neediest students are accessing and receiving
health and mental health services. Improving school-based
health services requires effective coordination between
California's health and education systems. This bill will
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require the State Superintendent of Public Instruction to
develop recommendations on the efficient administration of
this federal funding source. Based on significant issues with
the administration of the program by DHCS, highlighted in a
2012 federal audit, over 800 school districts and charter
schools are owed hundreds of millions in federal funds going
as far back as 2010. In August 2014 Senator Liu's request for
a state audit of the SMAA program was granted by the Joint
Legislative Audit Committee. That audit is currently underway.
This bill will have the State Superintendent, utilizing
information from the audit, produce recommendations on
improving the structure and administration of the program
through coordination with LEAs. To increase transparency the
bill also requires DHCS to annually post administrative fee
information charged to school districts by intermediary
agencies.
2.Background on SMAA. SMAA allows LEAs to be reimbursed through
federal Medicaid matching funds for some of their
administrative costs associated with school-based health and
outreach activities that are not claimable under the LEA
Medi-Cal Billing Option or under Medi-Cal generally. In
general, the cost of school-based health and outreach
activities reimbursed under SMAA consist of referring
students/families for Medi-Cal eligibility determinations,
providing health care information and referral, coordinating
and monitoring health services, and coordinating services
between agencies.
In 2012-13, 825 LEAs were involved in the SMAA program, a
decrease from 836 from 2010-11. LEAs that elect to participate
in SMAA must submit its claims through its LEC or an LGA. For
2014-15, each area of the state was covered by one of 11 LECs
and there are eight LGAs that participated in SMAA in specific
areas of state. LGAs and LECs must have a signed contract with
DHCS to claim federal reimbursement and an approved claiming
plan. As a condition of participation in SMAA, each
participating LGA and LEC is required to pay an annual
participation fee to DHCS. The participation fee is used to
cover the DHCS' cost of administering the SMAA claiming
process, including claims processing, technical assistance,
and monitoring.
3.Administrative fee disclosure provision. In addition to the
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state participation fee paid by LECs and LGAs, LGAs and LECs
charge LEAs an administrative fee for SMAA claiming. These
fees vary by each LEC and LGA but are typically expressed as a
percentage of the federal funds claimed from invoices
submitted by LEAs to their LEC or LGA. This bill would require
that amount to be disclosed on the DHCS website. The author
indicates these fees are not currently publicly posted, and
that many of the LECs and LGAs are asking for significant fee
increases in the range of 50 percent or more. The author
argues requiring the posting of this information helps both
with the overall transparency of the SMAA program, and
increases the ability of LEAs to have adequate information and
context when they develop contracts with LECs and LGAs. The
author states, in some cases, there are multiple LECs or LGAs
for districts to contract with, and requiring the posting of
administrative fee information is important to LEAs as they
seek to make the best local decisions on developing agreements
with LECs and LGAs.
4.Federal financial report on SMAA. CMS performed a Financial
Management Report of SMAA for the period July 2010 through
June 2011, during which time California claimed $188.9 million
in federal Medicaid matching funds. The purpose of the review
was to determine if California properly claimed federal
Medicaid reimbursement for administrative costs in accordance
with federal regulations and California's approved School
Based Administrative Claiming Guide. CMS' review found serious
deficiencies within the program.
The CMS review included visiting Turlock Unified School District
(Turlock), Tulare County Office of Education - Special
Services Division (Tulare) and Santa Barbara County Education
Office - Special Education (Santa Barbara). The review found
two (Turlock and Tulare) of the three entities did not comply
with federal regulations or the OMB Circular A-87 (described
below). The review was critical of DHCS for a lack of
oversight and monitoring of invoices submitted, and
inconsistency across school districts over the oversight that
each individual LEC/LGA performs in a review over the amounts
claimed. CMS found a lack of internal controls, operating
procedures and financial oversight to ensure compliance with
federal regulation and the OMB circular, and the approved
claiming plan did not comply with federal regulation and the
OMB circular.
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5.SMAA payment deferral. On June 26, 2012, the CMS informed DHCS
that the SMAA program was on payment deferral, because
implementation of DHCS's approved SMAA claiming plan did not
comply with the requirements detailed in the federal Office of
Management and Budget (OMB) Circular A-87. OMB Circular A-87
requires that any costs claimed be limited to those that are
reasonable and necessary for the proper and efficient
administration of the Medi-Cal program. Exceptions to the CMS
payment deferral include Los Angeles Unified School District,
which uses a CMS-approved Random Moment Time Study (RMTS)
system (discussed below) and the Santa Barbara County
Education Office - Special Education, which was found to be
compliant with OMB Circular A-87. The CMS payment deferral
applies retroactively to claims submitted. To lift the
deferral, CMS required DHCS to implement a revised claiming
plan that is in compliance with OMB Circular A-87. CMS also
informed DHCS that any invoices submitted for quarters after
July 1, 2012, using the currently approved methodology, may be
subject to deferral.
On April 1, 2015, DHCS submitted a backcasting methodology for
all deferred invoice claims submitted to the SMAA program
based on an October 7, 2014 CMS deferral settlement agreement.
Under that agreement, DHCS would apply the following criteria
to each unresolved deferred invoice:
a. Claims under $25,000 will be paid in whole and
backcasting will not be required;
b. Claims between $25,001 and $50,000 will require
claiming units to choose one of the following options:
o An interim payment of 75 percent and agree
to backcasting or,
o A settlement payment of 75 percent of the
claimed amount or $25,000, whichever is higher with
no backcasting; and,
a. Claims greater than $50,001 will receive an interim
payment of 40 percent and backcasting will be required.
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In February 2015, DHCS indicated $216 million in deferred
current placeholder claims that have yet to be paid to date,
and $122 million is the total deferred claims that have been
paid.
DHCS indicates all interim payments for under $25,000 have
been made, and DHCS hopes to have the interim payments made in
this fiscal year. The final reconciliation amounts will depend
upon CMS approval of the state's submission.
1.RMTS. The new RMTS claiming methodology will replace the
worker log methodology that has been used in the SMAA program.
Under the worker log methodology, SMAA participants fill out
paper time surveys in which they state the amount of time they
spent on MAA and non-MAA activities. Under the RMTS method of
time surveying, participants will receive an email
questionnaire that asks what they are doing at a specified
time. That information will be sent to the LECs and LGAs, who
will code the answer to MAA billable or MAA non-billable
codes. The RMTS method provides means of determining what
portion of a participant's workload is spent performing
activities which are reimbursable by Medicaid, and will be the
basis for claiming federal Medicaid matching funds.
2.Bureau of State Audits. In July 2014, Senator Liu requested
the Joint Legislative Audit Committee approve an audit of SMAA
and the LEA Billing Option, the effectiveness of the LECs and
LGAs associated with administering the program, the extent to
which the necessary administrative controls and structures are
in place to ensure schools receive the allowed Medicaid
funding. BSA indicates the target date for completion of that
audit is August 2015.
3.Double referral. This bill was heard in the Senate Education
Committee on April 22, 2015 and passed on consent on a 9-0
vote.
4.Support. This bill is sponsored by school districts, school
administrators and the California Teachers Association.
Proponents argue this bill will provided needed direction and
reform for the SMAA program, which plays a critical role in
ensuring that students have access to health insurance and
health services and it is a vital source of funding for
school-based health programs in California. Supporters argue
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it is essential that this program be run efficiently to
maximize all allowable federal funds, and to ensure that as
many dollars as possible reach locals schools to provide
services to California's students. Supporters state the delays
in funding and administrative inefficiencies on the part of
DHCS have jeopardized the continued operations of the SMAA
program and health services in hundreds of California school
districts and charter schools. Supporters conclude this bill
will help to ensure that this funding source remains viable
and reliable for school districts in California.
SUPPORT AND OPPOSITION :
Support: Association of California School Administrators
California Chapter of the National Association of
Social Workers
California School-Based Health Alliance
California Teachers Association
Los Angeles Unified School District
Riverside County Superintendent of Schools
San Diego Unified School District
Oppose: None received
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