BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 123


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          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:









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             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  








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               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  








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            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. 










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          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.










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          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  








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               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. 










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          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,









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             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:   








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          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.








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          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;










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             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, 








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             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:










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          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.  












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            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.








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             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  








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                 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.









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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'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  








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               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  








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               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








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          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  








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            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  








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               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  








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               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  








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               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








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          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








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          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