BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: SB 276 --------------------------------------------------------------- |AUTHOR: |Wolk | |---------------+-----------------------------------------------| |VERSION: |March 26, 2015 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |April 15, 2015 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Scott Bain | --------------------------------------------------------------- SUBJECT : Medi-Cal: local educational agencies SUMMARY : Requires the Department of Health Care Services to seek federal financial participation for covered services that are provided by a local education agency (LEA) to a child who is an eligible Medi-Cal beneficiary, regardless of whether the child has an individualized education plan or an individualized family service plan, or whether those same services are provided at no charge to the beneficiary or to the community at large, if the LEA takes all reasonable measures to ascertain and pursue claims for payment of covered services against legally liable third parties. Existing law: 1.Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which qualified low-income persons receive health care benefits. 2.Requires that specified services provided by a LEA are covered Medi-Cal benefits, to the extent federal financial participation (FFP) is available, are subject to utilization controls and standards adopted by DHCS, and are consistent with Medi-Cal requirements for physician prescription, order, and supervision. 3.Defines the scope of covered services that an LEA may provide, which include targeted case management services (TCM) for children with an individualized education plan (IEP) or an individualized family service plan (IFSP). 4.Defines an LEA 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 SB 276 (Wolk) Page 2 of ? a University of California campus. This bill: 1.Requires, subject to 2) below, DHCS to seek FFP for covered services that are provided by a LEA to a child who is an eligible Medi-Cal beneficiary, regardless of either of the following: a. Whether the child has an IEP or an IFSP; and, b. Whether those same services are provided at no charge to the beneficiary or to the community at large. 2.Implements the requirement in 1) above if the LEA takes all reasonable measures to ascertain and pursue claims for payment of covered services against legally liable third parties pursuant to a specified provision of federal Medicaid law that requires that states take all reasonable measures to ascertain and pursue claims for payment of health care items and services against legally liable third parties. 3.Requires, if a legally liable third party denies a claim submitted by a LEA pursuant to 2) above, the legally liable third party to issue a notice of denial of non-coverage of services or benefits. 4.Makes legislative findings and declarations regarding this bill, including that: a. LEAs must have an approved provider participant agreement with DHCS through the federal Centers for Medicare and Medicaid Services to be eligible to provide services; b. To participate in the LEA Medi-Cal billing option program, LEAs must reinvest the federal reimbursement they receive under this program in health and social services for children and families, and develop and maintain a collaborative committee to assist them in decisions regarding the reinvestment of federal reimbursements. c. The providers and supervisors of staff for the assessment and medically necessary health services are school nurses; d. The LEA billing option facilitates reinvestment in health and social services for SB 276 (Wolk) Page 3 of ? students and their families so that schools can foster access to and provide comprehensive health services to eligible Medi-Cal students; and, e. The funds are reimbursement for services rendered and can be used as matching dollars to draw down FFP, and the funds are restricted in their use as they must supplement existing services, not supplant. 5.States legislative intent in enacting this bill to ensure that a school district or county office of education that is authorized as an LEA Medi-Cal provider is assured that all options for FFP are available, and the Legislature encourages LEAs to utilize reimbursed funds to hire credentialed school nurses to supplement, not supplant, existing LEA health services personnel. FISCAL EFFECT : This bill has not been analyzed by a fiscal committee. COMMENTS : 1.Author's statement. According to the author, this bill will allow LEAs to receive reimbursement for qualified services provided for all Medi-Cal eligible students regardless of whether the student has an IEP or IFSP or whether similar services are provided to regular education students at no cost. This bill will allow schools to be reimbursed for all services provided to all Medi-Cal eligible students. This increased funding would enable schools to be more active in managing the conditions affecting all students, may increase the services they provide and may result in the hiring of more school nurses. With school districts and county offices of education having the ability to be reimbursed for all covered services to Medi-Cal eligible students, FFP will increase. 2.LEA. The LEA Medi-Cal Billing Option Program was established in 1993 and provides Medicaid FFP to LEAs for health-related services provided by qualified medical practitioners. Reimbursement is based upon a fee-for-service (FFS) model, and school expenditures for qualified services rendered are reimbursed at 50 percent of cost using federal Medicaid matching funds. There is no state General Fund expense for the program. Under the program, LEAs bill Medi-Cal for the direct medical services they provide to Medi-Cal eligible students. LEAs pay for the services and are reimbursed the FFP rate relative to the cost of each individual service from federal SB 276 (Wolk) Page 4 of ? funds. Subject to specified conditions, LEA covered services can include the following: a. Health and mental health evaluations and health and mental health education; b. Medical transportation; c. Nursing services; d. Occupational therapy; e. Physical therapy; f. Physician services; g. Mental health and counseling services; h. School health aide services; i. Speech pathology services; j. Audiology services; and, aa. Targeted case management services for children with an IEP or an IFSP. Under the state's Medicaid State Plan, LEA services are limited to a maximum of 24 services per 12 month period for a beneficiary without prior authorization, provided that medical necessity criteria are met. LEAs may obtain authorization for LEA services beyond 24 services per 12-month period from the beneficiary's: a. IEP or IFSP developed for the special education student; b. California Childrens Services Program; c. Short-Doyle Program; d. Medi-Cal field office authorization (TAR); and, e. Prepaid health plan authorization (including Primary Care Case Management). 1.Recent federal guidance on Medicaid payment for "free care." In December 2014, the federal Centers for Medicare & Medicaid SB 276 (Wolk) Page 5 of ? Services (CMS) issued a State Medicaid Director Letter regarding Medicaid payment for services covered under a state's Medicaid plan to an eligible Medicaid beneficiary that are available without charge to the beneficiary, including services that are available without charge to the community at large, or "free care." Historically, CMS guidance on "free care" was that Medicaid payment was generally not allowable for services that were available without charge to the beneficiary, with some statutory and some policy exceptions (such as services provided as part of an IEP or IFSP.) The free care policy as previously applied effectively prevented the use of Medicaid funds to pay for covered services furnished to Medicaid eligible beneficiaries when the provider did not bill the beneficiary or any other individuals for the services. Under the new December 2014 guidance, Medicaid reimbursement is available for covered services under the approved state plan that are provided to Medicaid beneficiaries, regardless of whether there is any charge for the service to the beneficiary or the community at large. As a result, FFP is available for Medicaid payments for care provided through providers that do not charge individuals for the service, as long as all other Medicaid requirements are met. As is the case more generally, FFP for Medicaid payments is available only when all of the following elements are satisfied: a. The individual is a Medicaid beneficiary; b. The service is a covered Medicaid service, provided in accordance with the approved state plan methodologies, including coverage under the Early and Periodic Screening Diagnostic and Treatment (EPSDT) benefit provided to children; c. The provider is a Medicaid-participating provider and meets all federal and/or state provider qualification requirements; d. The state plan contains a payment methodology for determining rates that are consistent with efficiency, economy and quality of care; e. Third party liability (TPL) requirements are met; f. Medicaid payment does not duplicate other specific payments for the same service; g. The state and provider maintain auditable documentation to support claims for FFP; h. The state conducts appropriate financial oversight SB 276 (Wolk) Page 6 of ? of provider billing practices; and, i. All other program requirements (statutory, regulatory, policy) for the service, payment, and associated claiming are met. CMS states the goal of its new guidance is to facilitate and improve access to quality healthcare services and improve the health of communities. Prior to the CMS guidance in 2014, DHCS indicated there are two exceptions to the free care rule: (a) Medicaid covered services provided as part of an IEHP or IFSP; and (b) services provided by Title V of the Social Security Act (the Maternal Child Health Services Block Grant). DHCS indicates services provided as part of an IEP/IFSP are exempt from the fee care rule, they are not exempt from the TPL requirement. If any student has Other Health Coverage, those third party insurers must be billed prior to billing Medi-Cal for the service. The TPL requirement is based on the basic premise under federal Medicaid law and regulation that Medicaid is generally the payor of last resort. 1.Prior legislation. AB 2608 (Bonilla), Chapter 755, Statutes of 2012, made permanent and expanded provisions relating to program improvement activities in the Medi-Cal Local Billing Option (LBO) program, through which LEAs can draw down federal funding for health care services provided to Medi-Cal-eligible students. AB 2608 also expanded the scope of transportation services for which Medicaid reimbursements can receive reimbursement. SB 870 (Ducheny), Chapter 712, Statutes of 2010, (the 2010-11 Budget Bill) required DHCS to withhold one percent of LEA reimbursements, not to exceed $650,000, for the purpose of funding the work and related administrative costs associated with the audit resources approved in a specified budget change proposal to ensure fiscal accountability of the LEA Medi-Cal LBO and to comply with the Medi-Cal State Plan. AB 1540 (Committee on Health), Chapter 298, Statutes of 2009, extended the LEA LBO program improvement provision sunset date from January 1, 2010, to January 1, 2013. AB 131 (Committee on Budget), Chapter 80, Statutes of 2005, the 2005 health budget trailer bill, sunset the LEA program SB 276 (Wolk) Page 7 of ? improvement provisions January 1, 2010. SB 231 (Ortiz), Chapter 655, Statutes of 2001, enacted the LEA program improvement activities requirements, required DHCS to obtain a state plan amendment to accomplish various goals to enhance reimbursement for Medi-Cal services provided at school sites and student access to those services, and sunset various provisions of that bill January 1, 2006. SB 256 (Maddy), Chapter 654, Statutes of 1993, established the LEA LBO program by requiring that services provided by a LEA are a Medi-Cal-covered benefit. 2.Support. This bill is sponsored by the California School Nurses Organization (CSNO), which writes that schools nurses provide direct health care services that are medically necessary and ordered by the child's physician for all children in the schools. CSNO states the provision of these services allows the schools to meet the requirements under the federal Individuals with Disabilities Education Act (IDEA) for students who are in the special education category. With the revised guidance from CMS in December 2014, LEAs are now able to seek reimbursement for all health care provided to all Medi-Cal eligible students in both regular and special education. CSNO states it has been well documented that health care delivered in the schools is an economic and efficacious model. With this CMS change and the access to increased reimbursement, CSNO anticipates that LEAs will improve the coordination of students with chronic conditions some which impact their ability to be successful in school. CSNO believes this will be a value added, particularly to those schools with students less likely to have access to comprehensive care, and it believes the increased emphasis on prevention, early intervention and chronic disease management. CSNO conclude enhanced LEA billing will augment the current system while providing care for children who require medical services to function in the least restrictive environment. 3.Amendments. a. The findings and declarations in this bill state the providers and supervisors of staff for the assessment and medically necessary health services are school nurses. Staff recommends this language be broadened to include other types of providers who provide health care services in school who are not school nurses. SB 276 (Wolk) Page 8 of ? b. One of the existing problems an LEA experiences is not receiving a response on a claims submission to a third party. This bill requires, if a legally liable entity denies a claim, that entity to issue a notice of denial. A written denial could be used by the LEA as an attempt to pursue claims for payment from legally liable third parties. However, as drafted, if there is no response from the legally liable third party, the existing language does not solve this problem. Amendments are needed to clarify this provision. SUPPORT AND OPPOSITION : Support: California School Nurses Organization (sponsor) American Nurses Association California California Black Health Network California Chapter National Association of Social Workers California School Boards Association Children Now Lawndale Elementary School District Manteca Unified School District Nevada County Superintendent of Schools Holly Hermansen San Joaquin County Office of Education Sulphur Springs School District An individual Oppose: None received -- END --