BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 276


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          Date of Hearing:   June 23, 2015


                            ASSEMBLY COMMITTEE ON HEALTH


                                  Rob Bonta, Chair


          SB  
          276 (Wolk) - As Amended April 20, 2015


          SENATE VOTE:  40-0


          SUBJECT:  Medi-Cal: local educational agencies.


          SUMMARY:  Requires DHCS to seek federal financial participation  
          (FFP)  for covered services that are provided by a local  
          education agency (LEA) to a Medi-Cal eligible child regardless  
          of whether the child has an individualized education plan (IEP)  
          or an individualized family service plan (IFSP), or whether  
          those same services are provided at no charge to the child or to  
          the community at large, and authorizes an LEA to bill the  
          Medi-Cal program if there is no response to a claim for payment  
          of covered services submitted to a legally liable third party  
          within 45 days.  


          EXISTING LAW: 





          1)Establishes the Medi-Cal program, administered by the  
            Department of Health Care Services (DHCS), under which  








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            qualified low-income persons receive health care benefits.



          2)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  
            a University of California campus.


          3)Requires that specified services provided by a LEA are covered  
            Medi-Cal benefits, to the extent FFP is available. 





          4)Requires that specified services be subject to utilization  
            controls and standards adopted by DHCS, and are consistent  
            with Medi-Cal requirements for physician prescription, order,  
            and supervision. 



          5)Defines the scope of covered services that an LEA may provide,  
            which include targeted case management services (TCM) for  
            children with an IEP or an IFSP.



          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, one-time administrative costs of about $250,000 to  
          develop a state plan amendment and make system changes by DHCS  
          and unknown additional federal funding to LEAs to pay for  
          services to Medi-Cal beneficiaries (federal funds). 












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          COMMENTS:


          1)PURPOSE OF THIS BILL.  According to the author, this bill will  
            allow LEAs to receive reimbursement for services provided to  
            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.  The author states that  
            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.  The author concludes that 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)BACKGROUND.  



             a)   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 model, and school expenditures for  
               qualified services rendered are reimbursed at 50% 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 funds.   
               Subject to specified conditions, LEA covered services can  
               include the following: 










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               i)     Health and mental health evaluations and health and  
                 mental health education;
               ii)    Medical transportation;


               iii)   Nursing services;


               iv)    Occupational therapy;


               v)     Physical therapy;


               vi)    Physician services;


               vii)   Mental health and counseling services;


               viii)  School health aide services;


               ix)    Speech pathology services;


               x)     Audiology services; and,


               xi)    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  








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               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:





               i)     IEP or IFSP developed for the special education  
                 student;
               ii)    California Childrens Services Program;


               iii)   Short-Doyle Program;


               iv)    Medi-Cal field office authorization (TAR); and,


               v)     Prepaid health plan authorization (including Primary  
                 Care Case Management).





             b)   "Free Care Rule".  Historically, the Centers for  
               Medicare and Medicaid Services (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.









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               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: 





               i)     The individual is a Medicaid beneficiary; 
               ii)    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;


               iii)   The provider is a Medicaid-participating provider  
                 and meets all federal and/or state provider qualification  
                 requirements; 


               iv)    The state plan contains a payment methodology for  
                 determining rates that are consistent with efficiency,  
                 economy and quality of care; 


               v)     Third party liability (TPL) requirements are met;  










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               vi)    Medicaid payment does not duplicate other specific  
                 payments for the same service;  


               vii)   The state and provider maintain auditable  
                 documentation to support claims for FFP; 


               viii)  The state conducts appropriate financial oversight  
                 of provider billing practices; and, 


               ix)    All other program requirements (statutory,  
                 regulatory, policy) for the service, payment, and  
                 associated claiming are met. 





             c)   IEPs.  Pursuant to the federal Individuals with  
               Disabilities Education Act (IDEA), children with  
               disabilities are guaranteed the right to a free,  
               appropriate public education, including necessary services  
               for a child to benefit from his or her education.  An IEP  
               is a legally binding document that determines what special  
               education services a child will receive and why.  IEPs  
               include a child's classification, placement, specialized  
               services, academic and behavioral goals, a behavior plan if  
               needed, percentage of time in regular education, and  
               progress reports from teachers and therapists.  A child may  
               require any related services in order to benefit from  
               special education, including (but not limited to):  
               speech-language pathology and audiology services, early  
               identification and assessment of disabilities in children,  
               medical services, physical and occupational therapy,  
               orientation and mobility services; and psychological  
               services.  









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               According to the California Department of Education (CDE),  
               over 700,000, or approximately 11% of, California students  
               received Special Education services in the 2013-14 academic  
               year.





          3)SUPPORT.  This bill is sponsored by the California School  
            Nurses Organization (CSNO), which states 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 for  
            students who are in the special education category.  With the  
            revised guidance from CMS, 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 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.


          4)RELATED LEGISLATION.  










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             a)   SB 123 (Liu) requires the Legislative Analyst, in  
               consultation with CDE and DHCS, to make recommendations  
               relative to the administration and oversight of the SMAA  
               program.  SB 123 is pending in the Assembly Health  
               Committee.


             b)   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.





             c)   AB 1018 (Cooper) requires DHCS and CDE to convene a  
               joint task force to examine the delivery of mental health  
               services to children eligible for ESPDT services and for  
               services required by the federal Individuals with  
               Disabilities Education Act.  AB 1018 is pending in the  
               Senate Education Committee.



          5)PREVIOUS LEGISLATION.  



             a)   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. 









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             b)   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.



             c)   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.



          6)DOUBLE REFERRAL. This bill is double referred; upon passage in  
            this Committee, this bill will be referred to the Assembly  
            Education Committee.



          REGISTERED SUPPORT / OPPOSITION:




          Support


          California School Nurses Organization (sponsor)


          American Nurses Association California










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          Association of California School Administrators


          California Federation of Teachers


          California School Boards Association


          California School-Based Health Alliance


          California School Employees Association


          Children Now


          Emery Unified School District


          Lawndale Elementary School District


          Magnolia School District


          Manteca Unified School District


          National Association of Social Workers, California Chapter


          Nevada County Superintendent of Schools Holly Hermansen


          Sulphur Springs School District










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          Opposition





          None on file.




          Analysis Prepared by:Paula Villescaz / HEALTH / (916)  
          319-2097