BILL ANALYSIS Ó
SB 123
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SENATE THIRD READING
SB
123 (Liu)
As Amended August 15, 2016
Majority vote
SENATE VOTE: 39-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Health |11-0 |Wood, Bonilla, Burke, | |
| | |Campos, Chiu, Roger | |
| | |Hernández, Lackey, | |
| | |Nazarian, | |
| | | | |
| | | | |
| | |Ridley-Thomas, | |
| | |Rodriguez, Thurmond | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Education |5-0 |O'Donnell, McCarty, | |
| | |Santiago, Thurmond, | |
| | |Weber | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
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| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood, | |
| | |McCarty | |
| | | | |
| | | | |
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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 Administrative Claiming process and School-Based
Administrative Claiming process programs, and the appeals
process, as specified. Specifically, this bill:
1)Requires, no later than July 1, 2017, DHCS and the California
Department of Education (CDE) to establish and jointly
administer and chair a School-Based Health Program and Policy
Workgroup (workgroup) for the purpose of advising on issues
related to the delivery of school-based Medi-Cal services to
students in the state. Requires the workgroup to develop
recommendations for an interagency agreement between DHCS and
CDE, assist DHCS in formulating state plan amendments, and
establishes the scope and membership of the workgroup, as
specified.
2)Permits moneys collected and withheld as agreed to by LEAs as
a part of an LEA Medi-Cal billing option program provider
participation agreement administered by the DHCS to be used by
DHCS and CDE to fulfill the requirements of the interagency
agreement or memorandum of understanding (MOU) required in 23)
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through 25) below, and the staffing needed to jointly
administer and chair the workgroup.
3)Requires DHCS, beginning the 2017-18 state fiscal year, and
annually thereafter, to publish a single annual school-based
Medi-Cal report on a section of its Internet Web site that
includes the costs to the state of operating the School-Based
Administrative Claiming process program and any related fees
passed on to LEAs, a list of all participating LEAs, the costs
of operating the LEA Medi-Cal billing option program, a list
of each LEA participating in the LEA Medi-Cal billing option
program and other information as specified.
4)Permits DHCS to contract with each participating local
governmental agency (LGA) to assist with the performance of
nonschool-based administrative activities necessary for the
proper and efficient administration of the Medi-Cal program,
known as the Administrative Claiming process.
5)Permits DHCS to contract with a participating local
educational consortium (LEC) or LGA, and requires, if a LEA
chooses and DHCS has developed a process for direct
contracting, contract with a LEA to perform school-based
administrative activities necessary for the proper and
efficient administration of the Medi-Cal program, known as the
School-Based Administrative Claiming process.
6)Establishes that it is the intent of the Legislature to
provide LGAs with the option to participate in the Targeted
Case Management program and to provide LEAs with the option to
participate in the Administrative Claiming process program.
7)Permits, commencing July 1, 2018, DHCS to contract with each
participating LGA to assist with the performance of
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nonschool-based administrative activities necessary for the
proper and efficient administration of the Administrative
Claiming process and sets out contracting provisions,
processes for the denial of claims, processes for the appeals
of denials, and other requirements of participation, as
specified.
8)Permits, commencing July 1, 2018, DHCS to administer, or
oversee the administration of, a single statewide quarterly
random moment time survey (RMTS) for the School-Based
Administrative Claiming process program, or a reduction in the
number of random moment time surveys conducted in the state.
9)Exempts the Los Angeles Unified School District (LAUSD) from
the statewide quarterly RMTS and requires LAUSD to conduct its
own RMTS. Requires data from the RMTS conducted by LAUSD to
be excluded included in the statewide RMTS data collection.
10)Permits an LEA that contracts with DHCS to contract with an
LEC or LGA to perform some or all of the services required by
the School-Based Administrative Claiming process.
11)Requires, as condition of participation in the School-Based
Administrative Claiming process program, each participating
LEA, LEC or LGA to enter into a contract with DHCS and to
certify the total amount expended on the allowable
administrative activities. Permits an LEA to certify the
amount expended on allowable administrative activities either
directly to DHCS or through an LEC or LGA.
12)Requires DHCS to deny a claim if it not adequately supported,
or otherwise does not comply with federal requirements, for
purposes of claiming federal financial participation (FFP).
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13)Requires each School-Based Administrative Claiming process
contract to include a requirement for each participating LEA,
LEC, or LGA to submit a claiming plan as required by DHCS in
regulations developed in consultation with LEAs, LECs, and
LGAs.
14)Requires each participating LEA, LEC or LGA to certify to
DHCS that the participant claiming federal Medicaid
reimbursement expended funds appropriately and that the
reimbursement represents costs that are FFP eligible.
15)Requires that the state be held harmless from any federal
audit disallowance and interest resulting from payments made
to a participating LEA, LEC or LGA for a disallowed claim and
requires DHCS to recoup from the participant that submitted
the disallowed claim the amount of the disallowance and
interest as specified.
16)Permits DHCS to adopt regulations that prescribe the
requirements for the submission and payment of claims for
administrative activities performed by each LEA, LEC or LGA.
17)Specifies that administrative activities be those determined
by DHCS to be necessary for the proper and efficient
administration of the state's Medicaid plan and be defined in
regulation.
18)Requires DHCS to establish provisions for an LEA, LEC or LGA
to appeal a denied claim to DHCS, as specified.
19)Requires, as a condition in the School-Based Administrative
Claiming process, each participating LEA, LEC, or LGA to pay
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an annual participation fee through a mechanism agreed to by
the state and the participant to cover the cost of
administering the School-Based Administrative Claiming
process. Requires DHCS to determine and report staffing
requirements upon which projected costs will be based and
requires the amount of the participation fee to be based upon
the anticipated salaries, benefits, and operating expenses to
administer the School-Based Administrative Claiming process
and other costs related to that process.
20)Requires each participating LEA, LEC, or LGA that contracts
with DHCS to be responsible for the preparation and submission
of all administrative claiming plans, training of local
educational agency staff, and the submission of detailed
quarterly invoices.
21)Requires a participating LEC to be responsible for a LEA with
which it contracts that participates in the School-Based
Administrative Claiming process program solely as a
subcontractor to the LEC, including, but not limited to, the
preparation and submission of all administrative claiming
plans, training of local educational agency staff, overseeing
the local educational agency time survey process, the
submission of detailed quarterly invoices on behalf of any
participating LEA, and ensuring that the LEA complies with all
requirements of the School-Based Administrative Claiming
process program.
22)Permits DHCS to seek any state plan amendments necessary,
specifies that the School-Based Administrative Claiming
process program only be implemented to the extent that FFP is
available and permits DHCS to implement or interpret any
provisions necessary by means of all-county letters, provider
bulletins, or similar instructions.
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23)Requires DHCS, by July 1, 2018, to enter into an interagency
agreement or MOU with CDE to coordinate the efforts of both
departments with respect to the School-Based Administrative
Claiming process program and the LEA billing option.
24)Establishes similar provisions for each LGA contracting with
DHCS to provide nonschool-based administrative activities
necessary for the proper and efficient administration of the
Administrative Claiming process.
25)Requires DHCS to do the following in developing the
interagency agreement or MOU with CDE:
a) 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.
b) Consult with the workgroup regarding the impact of the
implementation of the School-Based Administrative Claiming
process program on operations at the local level and
develop a schedule for the regular ongoing meetings of the
workgroup.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
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 of $600,000.
Costs for the appeals process could be in the range of $2
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million or more ongoing, including informal and formal
appeals, and related legal services (LEA reimbursement
funds/federal).
2)Additional costs are possible if the workgroup recommends and
DHCS conducts activities that are authorized (not required)
under this bill, including the following:
a) A statewide random moment time survey (cost of $9
million in year-one costs and $6 million ongoing. One-time
costs would include $3 million in General Fund (GF) costs,
while the fund source for the remainder and the ongoing
costs would be LEA reimbursement funds/federal funds).
b) Making available direct contracting with LEAs ($2.4
million ongoing in LEA reimbursement funds/federal funds).
3)Ongoing cost to CDE of $222,000 to jointly co-chair the
workgroup, assist in developing recommendations for the
Smarter Balanced Assessment Consortium (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: According to the author, the Medi-Cal Administrative
Activities (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
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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. 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.
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.
The California School-Based Health Alliance states that this
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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.
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 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
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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: 1) the essential role that LECs play in assisting
districts with their School-based Medi-Cal Administrative
Activities (SMAA) claims; and, 2) 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 average daily attendance.
Analysis Prepared by:
Paula Villescaz / HEALTH / (916) 319-2097 FN:
0004144