BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 123|
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THIRD READING
Bill No: SB 123
Author: Liu (D)
Amended: 5/12/15
Vote: 21
SENATE EDUCATION COMMITTEE: 9-0, 4/22/15
AYES: Liu, Runner, Block, Hancock, Leyva, Mendoza, Monning,
Pan, Vidak
SENATE HEALTH COMMITTEE: 9-0, 4/29/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Report: School-Based Medi-Cal Administrative
Activities program
SOURCE: Author
DIGEST: This bill requires the Legislative Analyst to review
and prepare recommendations relative to the administration and
oversight of the School-Based Medi-Cal Administrative Activities
program.
ANALYSIS:
Existing law:
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1)Authorizes the California Department of Health Care Services
(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)
This bill:
1)Requires the Legislative Analyst, in consultation with the
Department of Education (CDE) and DHCS, 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 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.
b) Oversight of the administration of the program,
including oversight of the state agency, LGAs, and local
educational consortia.
c) The structure of the SMAA program and the role of each
entity, including the LGAs 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 (LEAs).
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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 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 SMAA 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 LGA and LEC, how those rates
vary across the state, and how rates are determined.
i) The ability of an LEA to contract with an LGA or an LEC
of its choosing.
j) The feasibility of convening an LEA advisory body for
the purposes of providing technical assistance to LEAs 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 LEAs.
1)Requires the DHCS to annually post on its Web site 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
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
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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 DHCS.
Background
The SMAA program provides federal reimbursements to LEAs 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 CMS administers the SMAA program at the federal
level, and DHCS administers the SMAA program for the State.
Comments
1)The rules keep changing. The audit of three LEAs conducted by
CMS determined that the entire State's 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 LEAs provide
certification of activities performed to support submitted
invoices. In addition, CMS required DHCS to submit a revised
time study methodology and statewide claiming plan.
[http://www.medicaidfor
education.org/filelibrary-name/webcommittee/PDF/SMAA_Ltr_to_CA_
Final.pdf]
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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 on October 7, 2014.
[http://www.dhcs.ca.gov/provgovpart/
Documents/ACLSS/SMAA/SMAA_Deferral_Resolution_CMS.pdf]
c) DHCS agreed to the settlement on October 14, 2014.
[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/CMC
S_letter_to_California_0315_2.pdf]
2)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:
i) Accepting reimbursement at 75% of the claimed amount
with backcasting, or:
ii) 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.
3)Audit request. The author requested an audit of the SMAA
program, which was approved by the Joint Legislative Audit
Committee in August 2014. This bill requires an evaluation of
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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 LEA
Medi-Cal billing option. This bill seeks an evaluation of the
LGA and LEC structure, addressing concerns of LEAs regarding
the ability for LGAs and LECs to change accounting codes and
claim amounts, and deny claims, submitted by LEAs, 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
The Legislative Analyst's Office (LAO) indicates that it would
need at least $150,000 to complete the report required by this
bill.
DHCS expresses the need for one limited-term position (about
$100,000 General Fund) to provide the necessary support to LAO
with regard to compiling data.
DHCS and CDE indicate other workload required by this bill to
be minor and absorbable.
This bill also creates a potentially significant cost pressure
to implement the LAO's recommendations.
SUPPORT: (Verified5/29/15)
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Auburndale Intermediate School
California Pan-Ethnic Health Network
California School-Based Health Alliance
California School Boards Association
California Teachers Association
Compton Unified School District
Los Angeles Trust for Children's Health
Los Angeles Unified School District
Mental Health America of California
National Association of Social Workers, California Chapter
Planned Parenthood Affiliates of California
Riverside County Superintendent of Schools
San Diego Unified School District
San Francisco Unified School District
Santa Clara County Office of Education
Small School Districts' Association
OPPOSITION: (Verified5/28/15)
None received
ARGUMENTS IN SUPPORT: According to the California School
Boards Association, the federal funding that supports a
significant number of health services for California's neediest
students has been stopped based on inadequate internal controls
and program oversight. Due to issues with the administration of
the program, California school districts have not been
reimbursed for services they provided under the SMAA program for
years and are now owed hundreds of millions of dollars.
Prepared by:Lynn Lorber / ED. / (916) 651-4105
5/31/15 12:45:19
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