BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: SB 123
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|Author: |Liu |
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|Version: |August 18, 2016 Hearing |
| |Date: August 26, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Lynn Lorber |
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Subject: Medi-Cal: school-based administrative activities
NOTE: This bill was amended in the Assembly to replace its
contents and this is the first time the bill is being heard by
this Committee in its current form.
SUMMARY
This bill establishes a revised process for school-based and
non-school-based administrative claiming, beginning January 1,
2018, authorizes the Department of Health Care Services (DHCS)
to administer or oversee a single statewide quarterly random
moment time survey, requires the DHCS and California Department
of Education to enter into an interagency agreement or
memorandum of understanding by July 1, 2018, and establishes a
workgroup to provide advice on issues related to the delivery of
school-based Medi-Cal services to students.
BACKGROUND
The School-Based Medi-Cal Administrative Activities (SMAA)
program provides federal reimbursements to local educational
agencies for the federal share (50%) of certain costs for
administering the Medi-Cal program. Those activities include:
outreach and referral, facilitating the Medi-Cal application,
arranging non-emergency/non-medical transportation, program
planning and policy development, and Medi-Cal administrative
activities claims coordination.
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The federal Centers for Medicare and Medicaid Services
administers the SMAA program at the federal level, and the DHCS
administers the SMAA program for the State.
Current law:
1) Authorizes DHCS to contract with each participating local
governmental agency (LGA) or each local educational
consortium (LEC) to assist with the performance of
administrative activities.
2) Requires DHCS to deny the claim if it determines that the
certification is not adequately supported, or does not
otherwise comply with federal requirements.
3) Authorizes each participating LGA or LEC to subcontract
with private or public entities to assist with the
performance of administrative activities.
(Welfare and Institutions Code § 14132.47)
ANALYSIS
This bill establishes a revised process for school-based and
non-school-based administrative claiming, beginning January 1,
2018, authorizes the Department of Health Care Services (DHCS)
to administer or oversee a single statewide quarterly random
moment time survey, requires the DHCS and California Department
of Education to enter into an interagency agreement or
memorandum of understanding by July 1, 2018, and establishes a
workgroup to provide advice on issues related to the delivery of
school-based Medi-Cal services to students. Specifically, this
bill:
Existing SMAA
1) Sunsets these provisions on January 1, 2018, and specifies
that these provisions are not applicable to Administrative
Claiming process activities performed on or after January
1, 2018.
Revised School-Based Administrative Claiming
2) Recasts and establishes as the School-Based Administrative
Claiming process, beginning January 1, 2018, the authority
for DHCS to contract with a participating local educational
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consortium (LEC) or local governmental agency (LGA) and if
a local educational agency (LEA) chooses and DHCS has
developed a process for direct contracting, to contract
with a LEA to perform school-based administrative
activities necessary for the proper and efficient
administration of the Medi-Cal program. This bill sets
forth contracting provisions, processes for the denial of
claims and appeals of denials, and other requirements for
participation.
3) Authorizes LEAs to contract directly with DHCS and submit
claims directly to DHCS (the existing structure provides
for contracting only between LECs or LGAs and DHCS, and for
LECs or LGAs to submit claims to DHCS).
4) Provides that LGAs and LECs shall only require LEAs to
contract for services that are actually provided and
necessary for the performance of oversight and monitoring
responsibilities, as specified. This bill specifically
authorizes county offices of education, LECs or LGAs to
provide services to LEAs to facilitate participation in
school-based health programs on a fee-for service basis.
This bill specifically authorizes county offices of
education to contract with private or public entities to
assist with the performance of administrative activities
necessary for the proper and efficient administer of the
Medi-Cal program.
Non-school-based Administrative Claiming
5) Establishes as the Administrative Claiming process,
beginning January 1, 2018, the existing authority for DHCS
to contract with each participating LGA to assist with the
performance of non-school-based administrative activities
necessary for the proper and efficient administration of
the Medi-Cal program. This bill sets forth contracting
provisions, processes for the denial of claims and appeals
of denials, and other requirements for participation.
Random moment time survey (RMTS)
6) Authorizes Department of Health Care Services (DHCS),
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beginning no later than July 1, 2018, based on the input of
the workgroup, to administer and oversee the administration
of a single statewide quarterly RMTS for the School-Based
Administrative Claiming process program, or a reduction in
the number of RMTSs conducted in the state.
7) Prohibits the statewide quarterly RMTS from applying to the
Los Angeles Unified School District, which shall conduct
its own RMTS.
Appeal
8) Requires DHCS to develop a process by which a local
educational agency (LEA) may appeal an action of the DHCS
with respect to the School-Based Administrative Claiming
process program and the LEA billing option.
9) Requires the appeals process to use the Office of
Administrative Hearings and Appeals or another neutral
third party acceptable to DHCS as the appeals authority and
requires the LEA to pay for the cost of the appeal.
Interagency agreement or MOU
10) Requires DHCS, by July 1, 2018, to enter into an
interagency agreement or memorandum of understanding (MOU)
with California Department of Education (CDE) to coordinate
the efforts of both departments with respect to the
School-Based Administrative Claiming process program and
the LEA Medi-Cal billing option. This bill requires the
interagency agreement or MOU to take into consideration the
recommendations of the workgroup.
11) Requires DHCS, in developing the interagency agreement or
MOU, to do all of the following:
a) Consult with relevant non-profit organizations
involved in facilitating information sharing among
state Medicaid and education agencies to identify, and
implement if feasible, best practices that accomplish
the coordination of efforts.
b) Consult with the workgroup regarding the role of
CDE and any changes to the MOU that the workgroup
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recommends.
c) Develop a schedule for the regular ongoing
meetings of the workgroup to provide feedback to DHCS
and CDE.
d) Ensure that the MOU components developed in
collaboration with CDE and the input of the workgroup
are severable.
State plan
12) Deletes the existing requirement that Department of Health
Care Services (DHCS) regularly consult with California
Department of Education (CDE), representatives of local
educational agencies (LEAs), and the local educational
consortium (LEC), in formulating the state plan amendments.
This bill instead requires the workgroup to assist DHCS in
formulating state plan amendments.
13) Requires an existing annual report to be included in the
annual school-based Medi-Cal report pursuant to #25.
Workgroup
14) Requires the DHCS and the CDE, by July 1, 2017, to
establish and jointly administer a School-Based Health
Program and Policy Workgroup (workgroup) to provide advice
on issues related to the delivery of school-based Medi-Cal
services to students.
15) Designates the Director of DHCS, or his or her designee, as
the chair of workgroup, and designates the Superintendent
of Public Instruction, or his or her designee, the vice
chair of the workgroup.
16) Requires the workgroup to develop recommendations for an
interagency agreement between DHCS and CDE, and assist DHCS
in formulating state plan amendments.
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17) Requires the scope of the workgroup to include but not be
limited to improving the operation of and participation in
the following school-based health programs:
a) The School-Based Administrative Claiming process.
b) The LEA Medi-Cal billing option.
18) Requires the workgroup to provide input to DHCS and CDE, by
January 1, 2018, on the development and continuing
operations of the interagency agreement or MOU pursuant to
#10-11. This bill requires the recommendations of the
workgroup to identify opportunities for effective
coordination between the state's health and education
systems at the state, regional, and local level, identify
ways DHCS can maximize its school-based Medicaid program
expertise, recommend an appeals process for the
School-Based Administrative Claiming process program and
the LEA billing option, and identify necessary legislation
or state plan amendments to support its recommendations.
19) Requires the workgroup to provide input to DHCS and CDE, on
a regular basis, on the degree to which the process and
implementation of the School-Based Administrative Claiming
process program and the LEA Medi-Cal billing option program
are meeting the needs of LEAs with respect to
cost-effectiveness, program structure, and operational
effectiveness, including the process of appeals and
balancing withheld funds and actual expenses.
20) Requires the workgroup to advise Department of Health Care
Services (DHCS) and California Department of Education
(CDE) on creating consistency across local educational
consortiums (LECs), local governmental agencies (LGAs), and
Department of Health Care Services (DHCS) with respect to
contracts and processes for the School-Based Administrative
Claiming process program.
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21) Requires the workgroup to make recommendations that include
but are not limited to determining the opportunities for
and the benefits, costs, and feasibility of the following:
a) Increasing LEA participation and maximizing
allowable federal financial participation in the
School-Based Administrative Claiming process program
and the LEA Medi-Cal billing option program.
b) Increasing contracting options for LEAs
participating in the School-Based Administrative
Claiming process program, such as allowing an LEA to
contract with an LEC or LGA outside of the LEA's
region.
c) Reducing the number of quarterly RMTS.
d) Identifying areas that may require a state
plan amendment.
e) Integrating and expanding other school-based
health and mental health programs with the
School-Based Administrative Claiming process program
and the LEA Medi-Cal billing option program, including
but not limited to those being implemented in
accordance with the LEA's local control and
accountability plan.
f) Improving and streamlining the annual
school-based Medi-Cal report pursuant to #25.
1) Requires the workgroup to be representative of the
diversity of LEAs with respect to size, type, and
geographic diversity and include representatives from
county offices of education, urban, suburban, and rural
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LEAs, and LECs and LGAs, and from Region IX of the federal
Centers for Medicare and Medicaid Services. This bill also
requires the workgroup to include representatives of the
existing LEA Ad Hoc Workgroup and members with expertise in
the school-based health and mental health programs.
2) Authorizes the workgroup to form technical advisory
subcommittees as necessary that must report back to the
workgroup on the development of plans and timelines to
implement the changes and expanded options described in
this bill.
3) Requires DHCS to make available to the workgroup staff any
information on other school-based dental, health, and
mental health programs, including but not limited to the
mental health programs and school-based health centers that
may receive Medi-Cal funding.
School-based Medi-Cal report
4) Requires Department of Health Care Services (DHCS),
beginning with the 2017-18 state fiscal year and annually
for each year thereafter, to publish the following
information in a single annual school-based Medi-Cal report
on a section of its website:
a) The costs to the state of operating the
School-Based Administrative Claiming process program
and any related fees passed on to local educational
agencies (LEAs).
b) A list of all participating LEAs.
c) The costs and fees being charged to LEAs as reported
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to DHCS by local educational consortiums (LECs) and local
governmental agencies (LGAs).
d) Comparisons of costs with other states,
summary of DHCS activities, workgroup recommendations
for program improvement, identifications of barriers
to reimbursement and actions taken to eliminate
barriers, and other information in the format required
for the existing LEA Medi-Cal billing option program
report.
e) The costs of operating the LEA Medi-Cal
billing option program, and a list of each LEA
participating in the LEA Medi-Cal billing option
program.
Miscellaneous
1) Authorizes DHCS and California Department of Education
(CDE) to use moneys collected as a result of a reduction in
federal Medicaid payments and withheld amounts agreed to by
LEAs related to the Medi-Cal billing option program
agreement, to meet the requirements of the interagency
agreement or MOU and the staffing needed to jointly
administer and chair the workgroup.
STAFF COMMENTS
1) Need for the bill. According to the author, "the SMAA
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 SMAA 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 School-based Medi-Cal programs issued last year.
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This bill provides more options and local control for
school districts, charters and other LEAs including
allowing for the option of local education agencies to
contract directly with DHCS 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. California currently does not have an
interagency agreement covering school-based health
programs. The bill establishes a stakeholder driven
School-Based Health Program and Policy Workgroup for the
purpose of advising DHCS and CDE on issues related to the
delivery of school-based Medi-Cal services, and a more
effective appeals process.
"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) State audit. In July 2014, Senator Liu requested the
Joint Legislative Audit Committee 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 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
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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.
3) Notable changes to administrative claiming. This bill
sunsets the existing SMAA claiming process and recasts that
process. Some notable changes in the new School-Based
Administrative Claiming process include:
a) Authorizes LEAs to contract directly with DHCS
and submit claims directly to DHCS (the existing
structure provides for contracting between LECs or
LGAs and DHCS, and for LECs or LGAs to submit claims
to DHCS).
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b) Requires DHCS and CDE to enter into an
interagency agreement or MOU.
c) Establishes a stakeholder workgroup administered
by DHCS and CDE.
d) Prohibits county offices of education, LECs or
LGAs from being kept from providing services to LEAs
to facilitate participation in school-based health
programs on a fee-for service basis.
e) Provides that LGAs and LECs shall only require
LEAs to contract for services that are actually
provided and necessary for the performance of
oversight and monitoring responsibilities, as
specified.
f) Specifies that county offices of education 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.
g) Requires additional reporting related to state
costs of operating the Medi-Cal program.
4) Assembly amendments. This bill, when it left the
Senate, required the Legislative Analyst to review and
prepare recommendations relative to the administration and
oversight of the School-Based Medi-Cal Administrative
Activities program. This bill was substantively amended in
the Assembly to recast its provisions. Specifically, this
bill now sunsets the existing SMAA process, recasts a new
School-Based Administrative Claiming process, moves the
existing non-school-based Administrative Claiming process
into a separate section, establishes a stakeholder
workgroup, and establishes an appeals process.
5) Fiscal impact. According to the Assembly Appropriations
Committee:
a) This bill requires DHCS to develop an appeals
process, staff a workgroup, and develop an MOU.
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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 million or more
ongoing, including informal and formal appeals, and
related legal services (LEA reimbursement
funds/federal).
b) Additional costs are possible if the workgroup
recommends and DHCS conducts activities that are
authorized (not required) under this bill, including
the following:
i) 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 costs, while the fund
source for the remainder and the ongoing costs
would be LEA reimbursement funds/federal funds).
ii) Making available direct contracting
with LEAs ($2.4 million ongoing in LEA
reimbursement funds/federal funds).
c) 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).
d) 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 General Fund).
SUPPORT
California School-Based Health Alliance
California School Boards Association
California Teachers Association
Los Angeles Unified School District
National Association of Social Workers, California Chapter
Teachers for Healthy Kids
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OPPOSITION
None received.
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