BILL ANALYSIS Ó
SB 123
Page 1
Date of Hearing: August 10, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 123
(Liu) - As Amended August 1, 2016
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| |Education | |5 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill revises claiming options for school-based activities
that qualify for federal reimbursement through the Medi-Cal
program, requires Department of Health Care Services (DHCS) and
the California Department of Education (CDE) to form a workgroup
and develop a memorandum of understanding (MOU), and requires
DHCS to annually report additional information about
school-based Medi-Cal claiming. Specifically, this bill:
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1)Requires DHCS and CDE to establish a School-Based Health
Program and Policy workgroup by July 1, 2017, and specifies
several workgroup tasks, including production of a report by
January 1, 2018, with recommendations for coordination between
state, local, and regional health and education systems.
2)Requires DHCS, beginning with the 2017-18 fiscal year and
annually thereafter, to publish a school-based Medi-Cal report
with specified information.
3)Subject to consultation with specified stakeholders and based
on input from the workgroup created in (1), requires an
interagency agreement or memorandum of understanding (MOU)
between DHCS and CDE to address the coordination of functions
between departments.
4)Requires DHCS to create an appeals process where LEAs can
challenge a determination by DHCS or CDE with respect to the
School-Based Administrative Claiming (SBAC) process and the
Local Educational Agency (LEA) Billing process.
5)Allows funds currently collected through the LEA Billing
process by proportionately reducing LEA reimbursement up to a
collective maximum of $1.5 million, to be used to administer
the MOU required in (3) or to staff the workgroup required in
(1).
6)With respect to claiming for Medi-Cal administrative
activities (commonly called MAA):
a) Carves out provisions related to schools from a more
broadly applicable section of current law that describes
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the claiming process whereby entities contract with DHCS
to receive federal Medicaid reimbursement through MAA.
b) Creates a new section specific to school-based
administrative claiming (SBAC, formerly school-based MAA),
and revises the SBAC process to:
i. Authorize DHCS to administer a single statewide
quarterly random moment time survey, or a reduction in
the number of such time surveys, for purposes of the
SBAC process. Specifies these provisions exclude the
Los Angeles Unified School District.
ii. Authorize LEAs to contract directly with DHCS
if the department makes available such an option, and
allows LEAs and other entities to appeal a
determination subject to a new appeals process created
in (4).
FISCAL EFFECT:
1)This bill requires DHCS to develop an appeals process, staff a
workgroup, and develop an MOU. Staffing the workgroup and
developing the MOU would be a one-time cost in the hundreds of
thousands. Costs for the appeals process could be in the range
of $1.5 million ongoing (LEA reimbursement funds/federal).
2)Additional, unknown costs are possible if the workgroup
recommends activities that are authorized under this bill,
including a statewide random moment time survey or direct
contracting with LEAs (LEA reimbursement funds/federal).
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3)Ongoing cost to CDE of $222,000 to jointly co-chair the
workgroup, assist in developing recommendations for the SBAC
and LEA Billing Option programs, provide consultation, and
develop an interagency agreement or MOU with DHCS (likely LEA
reimbursement funds/federal).
4)If the role and responsibilities of CDE increase upon
completion of the workgroup MOU, potential additional costs to
CDE (likely LEA reimbursement funds/federal/potentially GF).
COMMENTS:
1)Purpose. According to the author, this bill builds on the
recommendations of the State Audit of MAA programs issued last
year requested by the author. This bill provides more options
and local control for school districts, charters and other
LEAs to use technical support providers they feel meet their
needs, as opposed to the intermediary structure currently
mandated in statute. In addition, improving school-based
health services requires effective coordination between
California's health and education systems, and federal
requirements call for an interagency agreement between the
health and education agencies in states to operate these
programs. California currently does not have an interagency
agreement in place; this bill would mandate such an agreement.
2)School-based Medicaid billing options.
a) School-Based MAA. The School-based MAA program (renamed
SBAC by this bill) reimburses school districts for the
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federal share (50%) of the certain costs for administering
the Medi-Cal program. According to DHCS, such activities
include: outreach and referral, facilitating a Medi-Cal
application, arranging non-emergency/non-medical
transportation (such as transportation to a medical
clinic), program planning and policy development; and MAA
claims coordination.
b) LEA Billing Option Program. LEAs can be reimbursed for
providing certain Medi-Cal services on a fee-for-service
basis to Medi-Cal eligible children. Through the LEA
Billing Option Program, LEAs pay for the services with
local funds, then file claims for federal reimbursement.
Similarly to School-based MAA, LEAs are generally
reimbursed 50 cents for every dollar spent, minus funds
withheld for DHCS administrative costs. Thus, the program
is fully funded with a combination of local and federal
funds.
3)Recent audit and activities. Both the Centers for Medicare &
Medicaid Services (CMS) and the State Auditor have identified
deficiencies in the state's administration of these
school-based claiming processes. This bill addresses some of
the federal and audit findings as well as complaints of system
stakeholders about lack of coordination. Specifically:
a) In 2012, CMS informed DHCS that their implementation of
the school-based MAA did not comply with federal
requirements that costs claimed be limited to those that
are reasonable and necessary for the proper and efficient
administration of the Medi-Cal program. CMS put the
program on payment deferral until the department could
implement a revised claiming methodology, which means
school districts could not access federal matching funds
until a revised methodology was approved and implemented.
This has led to a multi-year process whereby prior claims
have been paid. The new process is based on a random
moment time study (RMTS), a sampling methodology to
determine accurate claiming amounts, which is codified in
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this bill.
b) Currently local government agencies and local
educational consortia are direct contractors with DHCS, and
they consolidate MAA claims provided by LEAs for a fee. A
2015 state audit noted DHCS ineffectively oversees these
entities, which were doing a poor job ensuring accurate
claims on behalf of LEAs. To address this issue, this bill
allows an LEA the option to contract with DHCS directly in
order to avoid being a subcontractor of an entity that may
not be adding value. The state audit also noted DHCS's
failure to produce statutorily required annual reports and
to adopt regulations. This bill attempts to establish
additional transparency by requiring more reports.
4)Related Legislation. SB 1113 (Beall), pending on the suspense
file of this committee, establishes a grant program to
incentivize partnerships between LEAs and county mental health
plans to maximize federal Medi-Cal reimbursement for mental
health services.
5)Prior Legislation. AB 1955 (Pan) of 2014, required DHCS and
CDE to cooperate and coordinate efforts in order to maximize
receipt of federal financial participation under the
Administrative Claiming process. AB 1955 was held on the
suspense file of this committee.
6)Suggested Amendments. Staff suggests the following amendments.
Amendment (a) is substantive, while (b) and (c) are technical
and conforming.
a) The Office of Administrative Hearings and Appeals is
an independent hearing office within DHCS that processes
appeals for providers and individuals who are dissatisfied
with actions taken by the department. The appeals process
created in section 14005.274 should be conducted by this
office, instead of the Office of Administrative Hearings.
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b) Section 14132.471 (l) refers to "the Medi-Cal
administrative activities program;" for consistency, this
should be amended to refer instead to the "School-Based
Administrative Claiming process."
c) Section 14132.471 (n)(1) should establish a definition
of "participating local government agency" instead of
"participating local educational agency."
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081