BILL ANALYSIS Ó SB 276 Page 1 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 SB 276 Page 2 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). SB 276 Page 3 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: SB 276 Page 4 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 SB 276 Page 5 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. SB 276 Page 6 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; SB 276 Page 7 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. SB 276 Page 8 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. SB 276 Page 9 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. SB 276 Page 10 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 SB 276 Page 11 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 SB 276 Page 12 Opposition None on file. Analysis Prepared by:Paula Villescaz / HEALTH / (916) 319-2097