BILL ANALYSIS Ó SB 123 Page 1 Date of Hearing: June 14, 2016 ASSEMBLY COMMITTEE ON HEALTH Jim Wood, Chair SB 123 (Liu) - As Amended May 16, 2016 SENATE VOTE: 39-0 SUBJECT: Medi-Cal: school-based administrative activities. SUMMARY: Recasts and revises the administrative claiming process for local educational agencies (LEAs) that conduct school-based administrative activities relating to the Medi-Cal program and authorizes the State Department of Health Care Services (DHCS) to withhold a percentage of funds to be reimbursed to LEAs for the purpose of defraying the cost of operating the School-Based Administrative Claiming process program (SBAC program), the LEA billing option, and the appeals process, as specified. Specifically, this bill: 1)Requires DHCS, in consultation with the California Department of Education (CDE), to establish a School-Based Health Program and Policy Workgroup (Workgroup), as specified for the purpose of advising DHCS on issues related to the delivery of school-based Medi-Cal services to students. Requires the scope of the workgroup to include, but not be limited to, improving the operation of and participation in all of the following school-based health programs: SB 123 Page 2 a) The SBAC program; b) The LEA billing option; c) The Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Program; and, d) Other school-based health and mental health programs, including school-based health centers which may receive Medi-Cal funding. 2)Requires DHCS, beginning the 2017-18 state fiscal year (FY), and annually thereafter, to publish the following reports on a section of its Internet Web site: a) A report that details the costs of operating the SBAC program, including the cost of conducting the random moment time survey (RMTS) and any vendor fees, lists each participating LEA, and cost savings realized through the restructuring and implantation of the SBAC program; b) A report that details the costs of operating the LEA Medi-Cal billing option program that lists each participating LEA; and, c) A report regarding the rate of participation of LEAs in SB 123 Page 3 the EPSDT Program. 3)Establishes that it is the intent of the Legislature to provide local governmental agencies (LGAs) with the option to participate in the Targeted Case Management (TCM) program and to provide LEAs with the option to participate in the SBAC program. 4)Requires, beginning no later than FY 2017-18, DHCS to administer, or oversee the administration of, a single statewide quarterly RMTS for the SBAC program. Exempts the Los Angeles Unified School District (LAUSD) from the statewide RMTS and permits LAUSD to conduct its own RMTS. Prohibits data from the RMTS conducted by LAUSD shall from being included in the statewide RMTS. 5)Requires DHCS to contract with each participating LEA to perform administrative activities necessary for the proper and efficient administration of the SBAC program. 6)Requires each participating LEA, as a condition of participation in the SBAC program for the purpose of claiming federal Medicaid reimbursement, to enter into a contract with DHCS and certify the total amount expended on allowable administrative activities. 7)Requires DHCS to deny a claim if it determines that the certification is not adequately supported, or otherwise does not comply with federal requirements, for purposes of claiming federal financial participation (FFP). Permits an LEA to SB 123 Page 4 request a reconsideration of a denied claim within 30 days after receipt of written notice of the denial and establishes a denial review process, as specified. Permits DHCS to recoup the cost of disallowed claims that have been paid to an LEA with interest. 8)Requires each SBAC program contract to include a requirement for each participating LEA to submit a claiming plan, as prescribed by DHCS in regulations developed in consultation with LEAs. 9)Requires each participating LEA to certify to DHCS that: a) the LEA expended funds from its general fund or from any other fund allowed under federal law and regulation to pay for 100% of the cost of performing SBAC program activities; and, b) for each FY, that the LEA's expenditures represent costs that are eligible for FFP for that FY. 10)Holds the state harmless from any federal audit disallowance and interest resulting from payments made to a participating LEA for a disallowed claim. If a federal audit disallowance results from a claim for a participating LEA that has already received reimbursement, allows DHCS to recoup the disallowed claim from the LEA, as specified. 11)Requires DHCS, in consultation with LEAs, to adopt regulations that prescribe the requirements for the submission and payment of claims for administrative activities performed by each participating LEA. SB 123 Page 5 12)Permits LEAs to claim the actual costs of nonemergency, nonmedical transportation of Medi-Cal eligibles to Medi-Cal covered services only through the Medi-Cal administrative activities program. 13)Requires LEAs participating in the SBAC program to pay an annual participation fee through a mechanism agreed to by the state and LEAs to be used to cover the cost of administering the SBAC program, including, but not limited to, claims processing, technical assistance, and monitoring. Requires the amount of the participation fee to be based upon the anticipated salaries, benefits, and operating expenses to administer the SBAC program and other costs related to that process. 14)Defines LEA as county offices of education, special education local plan areas, Healthy Start programs, any governing body of any school district or community college district, the county office of education, a charter school, a state special school, a California State University campus, or a University of California campus. 15)Requires each LEA to notify DHCS of its intent to participate in the SBAC program 90 days prior to the initial participation. 16)Requires each participating LEA to prepare and submit claims directly to DHCS. SB 123 Page 6 17)Requires DHCS, by July 1, 2017, to enter into an interagency agreement or memorandum of understanding (MOU) with CDE to coordinate the efforts of both CDE and DHCS with respect to the SBAC program and the LEA billing option. Requires the agreement or MOU to focus on the following: a) Maximizing DHCS's Medicaid program expertise; b) Coordinating functions and resources between DHCS and CDE, and building personnel capacity at CDE, to assist LEAs in implementing and meeting the requirements of the SBAC program and the LEA billing option at the local level, including an agreement of the use of funds provided for the administration of these programs; and, c) Developing a process by which an LEA may appeal an action of DHCS or CDE with respect to the SBAC program or the LEA billing option. Requires the appeals process to utilize the Office of Administrative Hearings, or another neutral third party acceptable to the DHCS and CDE, as the appeals authority. 18)Requires DHCS to do the following in developing the interagency agreement or MOU with CDE: a) Estimate the cost savings resulting from the restructuring of the SBAC program through implementation of the new SBAC program. Requires DHCS to provide the SB 123 Page 7 estimate of cost savings, data used to support the estimate, and a description of the methodology used to calculate the estimate to CDE; b) Consult with relevant nonprofit organizations involved in facilitating information sharing among state Medicaid and education agencies involved in the administration of Medicaid claiming for school-based services to identify, and implement if feasible, best practices that accomplish the coordination of efforts required; and, c) Consult with the Workgroup regarding the impact of the implementation of the SBAC program on operations at the local level. 19)Requires any savings resulting from the restructuring of the Administrative Claiming process program through implementation of the SBAC program and available to DHCS, to be directed toward implementation of the interagency agreement or MOU entered into pursuant to this section. 20)Requires DHCS, by July 1, 2017, in conjunction with CDE pursuant to the interagency agreement or MOU to provide technical assistance to all participating LEAs in order to maximize the allowable FFP in the SBAC program. 21)Specifies that county offices of education or LGAs are not prohibited from providing services to LEAs to facilitate participation in school-based health programs on a fee-for-service (FFS) basis. SB 123 Page 8 22)Specifies that county offices of education or a local educational consortium providing services to LEAs are not prohibited from contracting with private or public entities to assist with the performance of administrative activities necessary for the proper and efficient administration of the Medi-Cal program. 23)Requires any savings resulting from the restructuring of the SBAC program through implementation of the SBAC program and available to DHCS to be directed toward implementation of the interagency agreement or MOU. 24)Permits, commencing with FY 2017-18, and for each FY thereafter, DHCS to withhold up to 5% of the total funds to be reimbursed to LEAs pursuant to the SBAC program under the LEA Medi-Cal billing option program, for the following purposes: a) Defraying the costs of administering the SBAC program and the LEA billing option program; b) Implementing the interagency agreement or MOU; c) Providing necessary staff support to CDE; d) Providing necessary staff support to county offices of education and LEAs; and, SB 123 Page 9 e) Carrying out the duties and activities required by this bill. 25)Permits CDE to use funds from the withholding in 24) above to support an office of school-based health programs within CDE. 26)Permits DHCS to withhold an additional 1% of the total funds to be reimbursed to LEAs pursuant to the SBAC program under the LEA Medi-Cal billing option program for the purpose of defraying the costs of the development of an appeals process. 27)Specifies that the provisions of this bill be implemented only to the extent that FFP is not jeopardized and requires DHCS to seek any federal approvals necessary for the implementation of this section. EXISTING FEDERAL LAW: 1)Authorizes federal grants to states for a proportion of expenditures for medical assistance under the approved Medicaid state plan, and for expenditures necessary for administration of the state plan. 2)Requires that claims for FFP come directly from the single state Medicaid agency. 3)Authorizes FFP claims to be paid for health services and health-related administrative activities provided in a school setting through MAA. EXISTING STATE LAW: SB 123 Page 10 1)Establishes the Medi-Cal program, is administered by DHCS, under which qualified low-income individuals receive health care services. 2)Permits DHCS to contract with each participating LGA or each local education consortium (LEC) to assist with the performance of administrative activities necessary for the proper and efficient administration of the MAA program. 3)Requires DHCS to amend the Medicaid state plan with respect to the billing option for services by LEAs to ensure that schools are reimbursed for all eligible services that they provide that are not precluded by federal requirements and requires DHCS to eliminate and modify state plan and regulatory requirements that exceed federal requirements when they are unnecessary. 4)Requires DHCS to examine methodologies for increasing school participation in the Medi-Cal billing option for LEAs so that schools can meet the health care needs of their students and requires DHCS to simplify claiming processes for LEA billing. 5)Requires DHCS to regularly consult with CDE, representatives of urban, rural, large and small school districts, county offices of education, the LEC, and LEAs to assist in formulating the state plan amendments. 6)Requires DHCS to take whatever action is necessary to ensure that, to the extent there is capacity in its certified match, an LEA be reimbursed retroactively for the maximum period allowed by the federal government for any department change that results in an increase in reimbursement to LEA providers. SB 123 Page 11 7)Requires DHCS to file an annual report with the Legislature that includes at least all of the following: a) An annual comparison of the school-based Medicaid systems in comparable states; b) A state-by-state comparison of school-based Medicaid total and per eligible child claims and federal revenues. The comparison to include a review of the most recent two years for which completed data is available; c) A summary of department activities and an explanation of how each activity contributed toward narrowing the gap between California's per eligible student federal fund recovery and the per student recovery of the top three states; d) A listing of all school-based services, activities, and providers approved for reimbursement by the federal Centers for Medicare and Medicaid Services (CMS) in other state plans that are not yet approved for reimbursement in California's state plan and the service unit rates approved for reimbursement and a one-year timetable for state plan amendments and other actions necessary to obtain reimbursement for these items; SB 123 Page 12 e) The official recommendations made to DHCS by CDE, representatives of urban, rural, large, and small school districts, county offices of education, the LEC, and LEAs in order to assist in formulating the state plan amendments and the action taken by DHCS regarding each recommendation; and, f) Identification of 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 those barriers. 8)Requires DHCS to undergo the following: a) An annual comparison of the school-based Medicaid systems in comparable states; b) Efforts to improve communications with the federal government, CDE, and LEAs; c) The development and updating of written guidelines to LEAs regarding best practices to avoid audit exceptions, as needed; d) The establishment and maintenance of a LEA user-friendly, interactive Internet Website; and, SB 123 Page 13 e) Collaboration with CDE to help ensure LEA compliance with state and federal Medicaid requirements and to help improve LEA participation in the LEA billing option. 9)Requires the activities in 2) through 8) above to be funded by a reduction in federal Medicaid payments allocable to LEAs and to be deposited into the LEA Medi-Cal Recovery Fund, which shall not exceed $1.5 million. 10)Requires each LEA that elects to participate in the MAA program to submit claims through its LEC or LGA, but not both. 11)Requires each LEA participating as a subcontractor to a LEC to comply with all requirements of the MAA program established for LGAs. 12)Defines a LEA for purposes of the MAA program 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. 13)Permits an LGA or LEC to charge an administrative fee to any entity MAA program costs through that agency. FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee. COMMENTS: SB 123 Page 14 1)PURPOSE OF THIS BILL. According to the author, MAA program 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. The LEA Billing Option Program currently supports health services for special education students. These programs have been fraught with issues including the federal deferral of funds for the MAA program that resulted in hundreds of millions of dollars being owed to California schools going back to 2010. This bill builds on the recommendations of the State Audit of MAA programs issued last year which Senator Liu requested via the Joint Legislative Audit Committee (JLAC). This bill provides more options and local control for school districts, charters and other LEAs to utilize technical support providers they feel meet their needs rather than require them to use the intermediary structure currently mandated in statute by allowing local education agencies to contract directly with DHCS in a more streamlined, accountable, and cost effective structure as recommended by the state auditor. Improving school-based health services requires effective coordination between California's health and education systems. This bill requires development of an interagency agreement between DHCS and CDE to help ensure that collaboration is institutionalized and represents the best practices outlined in the recent federal guidance regarding high impact opportunities to support healthy students through inter-agency collaboration at the federal, state, and local level. Federal requirements call for an interagency agreement between the health and education agencies in states to operate these programs. California currently does not have that interagency agreement. SB 123 Page 15 The author concludes that improving school-based health services is a critical strategy to address the achievement gap in our schools and health and education equity issues in California. These vital programs must be operated at a level that meets the benchmark of national best practices in order to meet the needs of California's most vulnerable children. 2)BACKGROUND. a) LEA Billing Option vs. MAA. California established the LEA Medi-Cal Billing Option Program in 1993 and the MAA program in 1994. The LEA Medi-Cal Billing Option program is a FFS program which includes direct assessment and services to Medi-Cal eligible children. Claims which capture this direct service require the name of the student, the name of the provider, the date of service, and supporting documentation for the nature and extent of the services. Reimbursements for LEA direct services are returned to school districts as General Fund- Restricted funds. Funds are restricted by the oversight of a Collaborative Board as defined in the California education code. The SMAA program claims reimbursement for administrative activities, including outreach and enrollment, referral to Medi-Cal services, and other specific administrative activities that improve and support Medi-Cal services to children. The district is required to implement a quarterly time study methodology completed by district personnel in order to claim this revenue. LAUSD uses a time sampling methodology known as RMTS. Reimbursements for the MAA/RMTS program are returned to school districts as General Funds. SB 123 Page 16 b) MAA. MAA activities include: outreach and referral; facilitating the Medi-Cal application; arranging non-emergency/non-medical transportation; program planning and policy development; and, claims coordination. MAA funds were typically reimbursed directly to school districts for services already provided. In 2012-13, 825 LEAs were involved in the MAA program, a decrease from 836 in FY 2010-11. LEAs that elect to participate in MAA must submit claims through a LEC or LGA. As a condition of participation in MAA, each participating LGA and LEC is required to pay an annual fee to DHCS. The participation fee is used to cover the DHCS' cost of administering the MAA claiming process, including claims processing, technical assistance, and monitoring. Due to concerns regarding a lack of compliance and oversight, CMS has deferred reimbursements for claims through the MAA program since 2012. Approximately $0.5 billion in reimbursable funds has not been paid to California school districts in the last five years. i) MAA payment deferral. On June 26, 2012, the CMS informed DHCS that the MAA program was on payment deferral, because implementation of DHCS's approved MAA claiming plan did not comply with the requirements detailed in the 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 LAUSD, which uses a CMS-approved RMTS system (discussed below) and the Santa Barbara County Education Office - Special Education, which was found to SB 123 Page 17 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 MAA 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: (1) Claims under $25,000 will be paid in whole and backcasting will not be required; (2) Claims between $25,001 and $50,000 will require claiming units to choose one of the following options: (a) An interim payment of 75% and agree to backcasting; or, (b) A settlement payment of 75% of the claimed amount or $25,000, whichever is higher with no backcasting; and, (3) Claims greater than $50,001 will receive an interim payment of 40% and backcasting will be required. SB 123 Page 18 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's approval of the state's submission. ii) RMTS. The new RMTS claiming methodology will replace the worker log methodology that has been used in the MAA program. Under the worker log methodology, MAA 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. c) Definitions. A LEA is any school district or community college district, a county office of education, a state special school, a California State University campus, or a University of California campus. A LEC is a group of LEAs that are all in one same region out of the 11 service regions established by the California County Superintendent Educational Services Association. A LGA is a county, county agency, chartered city, Native American Indian tribe, tribal organization, or subgroup of a Native American Indian tribe or tribal organization. DHCS currently contracts with LGAs and LECs that consolidate SB 123 Page 19 claims provided by LEAs for a fee. d) Federal financial report on MAA. CMS performed a Financial Management Report of MAA 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 federal OMB Circular A-87. The review was critical of DHCS for its 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. e) 2015 State Auditor's Report. In July 2014, Senator Liu requested JLAC approve an audit of MAA 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. The State Auditor concluded that while the reasonableness test criteria process DHCS used to review SB 123 Page 20 reimbursement claims for the MAA program from October 2013 through October 2014 was reasonable and not inconsistent with federal requirements, DHCS approved fewer than 10% of the claims submitted under this process. The entities with which DHCS contracts to review reimbursement claims-LECs and LGAs-added little value during this review process; they approved and forwarded to DHCS claims that did not comply with the reasonableness test criteria benchmarks and other limits. The Audit noted that at the time, DHCS was behind in its required reviews of LECs and LGAs, which the Auditor noted increased the risk that these entities are not performing the administrative tasks for which they are responsible. DHCS also does not effectively oversee the contracts between the LECs or LGAs and the claiming units. The Auditor also found that DHCS missed an opportunity to cut costs through the implementation of a single statewide quarterly time survey when it implemented the RMTS methodology. The Audit estimated that the administrative activities program could save as much as $1.3 million annually in coding costs alone if DHCS conducted a single statewide quarterly time survey. However, if DHCS implemented its own single statewide quarterly survey and took over responsibility for overseeing the administrative activities program, thus eliminating the need to use the LECs and LGAs for these purposes, it would result in significant savings to the administrative activities program. The Auditor found that DHCS could increase federal funding by an estimated $10.2 million annually if more claiming units participated in the program and could have increased federal reimbursements by about $4.6 million from February 2009 through June 2015 if it increased the reimbursement rate for translation activities to the rate allowed by federal law. Additionally, DHCS has not complied with state law requiring the adoption of regulations for its administrative activities program and has failed to issue a required annual report for its billing option program SB 123 Page 21 3)SUPPORT. The California School-Based Health Alliance states that this bill will provide needed reform for School-based Medi-Cal programs. These programs provide a vital source of funding for school-based health services in California. Effective cross-agency collaboration is vital to deliver high-quality school-based health services to California students. This bill will build an essential link between California's healthcare and education systems to provide support services for our state's most vulnerable students. The California Teachers Association states that the current program has become too cumbersome with many districts dropping out of the program over the last several years even through it can provide a vital source of funding for school-based health services in California. What is missing is an active role for the education community where the school community can bring to the program its expertise and help to create an effective program. California should maximize all allowable federal funds and ensure that as many dollars as possible reach local schools to provide services to children. Creating a hub within CDE to oversee the various health programs operated by school districts would help to sharpen the focus on these programs that provide vital support to students and their families. 4)OPPOSITION. The California County Superintendent Educational Services Association states that there is merit in the priorities of this bill concerning the commitment to school-based health care centers and community schools, broad-based collaboration, and an improved appeals process. However, these potential positives are overwhelmed by the disruption that would occur by changing the organizational structure precisely when the program is beginning to stabilize again. The Kern County Superintendent of Schools states that while SB 123 Page 22 the bill purports to address a long history of confusion among governmental agencies in the federal MAA claiming process and attempts to implement recommendations that have been made by the State Auditor General designed to help LEAs better understand the claiming process, the bill replaces the current structure of LEC support and oversight of LEA reporting and claiming with a structure that requires LEAs to contract directly to CDE/DHCS. All LEAs, would be responsible for preparation and submission of claiming plans, training of staff and submission of detailed quarterly invoices. LEAs would now be required to pay for additional support and technical assistance in preparing claiming plans on a FFS basis. This bill will make it harder for LEAs to file accurate claims and may result in significant increased costs that school districts pay for claim filings by eliminating: a) the essential role that LECs play in assisting districts with their SMAA claims; and, b) assurances that claims are filed in a manner that is consistent with the requirements of federal law. This is particularly true for the small districts with less than 5,000 ADA. 5)RELATED LEGISLATION. a) AB 1133 (Achadjian) makes technical changes to existing law regarding grants to LEAs to pay the state share of costs of providing school-based early mental health intervention and prevention services to eligible students. AB 1133 was held in the Assembly Appropriations Committee. b) AB 1018 (Cooper) requires DHCS and CDE to convene a joint task force to examine the delivery of mental health SB 123 Page 23 services to children eligible for Early and Periodic Screening, Diagnosis, and Treatment services and for services required by the federal Individuals with Disabilities Education Act. AB 1018 is pending in the Senate Education Committee. 6)PREVIOUS LEGISLATION. AB 1955 (Pan) of 2014, would have required DHCS and CDE to cooperate and coordinate efforts in order to maximize receipt of FFP under the Administrative Claiming process. AB 1955 was held on the Assembly Appropriations Committee's suspense file. 7)DOUBLE REFERRAL. Upon passage in this Committee, this bill will be referred to the Assembly Education Committee. 8)COMMITTEE COMMENTS. a) LECs. The bill prohibits, beginning January 1, 2018, LECs from participating in the MAA program. While the Audit points out that some LECs "add little value" to the process, others provide complicated technical assistance to LEAs throughout the billing process. This holds true for smaller school districts that may not have the means to train staff properly and, should they be required to claim on their own, may disproportionately be affected by inaccurate and therefore disallowed claims. b) RMTS. Currently this bill creates one single state-wide SB 123 Page 24 RMTS survey, but exempts LAUSD and permits it to administer its own RMTS, creating two across the state. It is unclear why this exemption is necessary, and defacto creates two RMTS surveys across the state. c) Withhold. Currently the bill permits DHCS to withhold 5% of funds from reimbursed MAA claims and an additional 1% for purposes of administering appeals processes. Based on claims submitted between 2013-2014, this could be up to $11.5 million. Current statute permits $1.5 million to be withheld for DHCS to administer the program. This number is seemingly arbitrary, and it is not clear of transferring $10 million from schools to DHCS is necessary or appropriate. Additionally, it is not clear if the withholding of such a significant amount would meet CMS approval. 9)SUGGESTED AMENDMENTS. Currently this bill creates significant changes to the MAA program on a relatively short timeline. The intent, which is to ameliorate a long-standing problem that has resulted in schools not being reimbursed in a timely manner for health care services provided on school sites, is laudable. However, without input from DHCS on how these changes would be received or implemented, it is unclear if the administrative claiming program provided for in this bill actually fixes the many problems the current system faces. The Committee may wish to consider only the following provisions of the bill, until more collaboration and consideration can be had: a) Workgroup. Current law vaguely requires DHCS to consult with various stakeholders. The Committee may wish to consider formally establishing the Workgroup as provided for by this bill, and to add direction to the Workgroup SB 123 Page 25 including examining the cost effectiveness, program structure, and operational effectiveness, including the process of balancing withheld funds and actual expenses of the MAA and LEA billing option programs. b) Direct billing. The Committee may wish to permit, instead of require, LEAs to directly bill to DHCS and establish an appeal process for that purpose. c) MOU. The Committee may wish to consider requiring DHCS and CDE to formally establish a working relationship to provide input on whether the SBAC program and the LEA billing option program are meeting the needs of LEAs with respect to cost effectiveness, program structure, and operational effectiveness. d) Duplicative reporting. As currently drafted the bill requires DHCS to publish five different reports regarding the MAA program, LEA billing option and EPSDT program. The Committee may wish to consider combining these reporting requirements. REGISTERED SUPPORT / OPPOSITION: Support California School-Based Health Alliance SB 123 Page 26 California Teachers Association National Association of Social Workers Teachers for Healthy Kids American Federation of State, County, and Municipal Employees, AFL-CIO (previous version) California School Boards Association (previous version) California School Employees Association (previous version) Los Angeles Unified School District (previous version) Riverside County Superintendent of Schools (previous version) San Francisco Unified School District (previous version) Santa Clara County Office of Education (previous version) Small School Districts' Association (previous version) Opposition SB 123 Page 27 California County Superintendents Educational Services Association Kern County Superintendent of Schools Orange County Department of Education Sonoma County Office of Education Analysis Prepared by:Paula Villescaz / HEALTH / (916) 319-2097