BILL ANALYSIS Ó
SB 276
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Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON EDUCATION
Patrick O'Donnell, Chair
SB
276 (Wolk) - As Amended July 7, 2015
[This bill was double referred to the Assembly Health Committee
on and was heard as it relates to issues in its jurisdiction.]
SENATE VOTE: 40-0
SUBJECT: Medi-Cal: local educational agencies
SUMMARY: Requires the Department of Health Care Services (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.
Specifically, this bill:
1.Requires 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 whether 1) the child has an IEP or
an IFSP, and 2) whether those same services are provided at no
charge to the beneficiary or to the community at large.
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2.Requires LEAs to take all reasonable measures to ascertain and
pursue claims for payment of covered services against legally
liable third parties pursuant to federal law.
3.Requires, if a legally liable third party receives a claim
submitted by an LEA, requires that party to either reimburse
the claim or issue a notice of denial of coverage of services.
4.States that there is no response to a claim within 45 days,
the LEA may bill the Medi-Cal program.
5.Requires the LEA to retain a copy of the claim for a period of
three years.
6.States that these provisions shall not be implemented until
any necessary federal approvals have been obtained by DCHS.
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
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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 local educational agency, for the purpose of this
option, to include school districts, county offices of
education, state special schools, and California State
University and a University of California campuses.
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.
COMMENTS:
Need for the bill. The author's office states, "SB 276 will
allow Local Educational Agencies (LEA) to receive reimbursement
for services provided to Medi-Cal eligible students regardless
of whether the student has an Individual Education Plan (IEP) or
Individualized Family Service Plan (IFSP) or whether similar
services are provided to regular education students at no cost.
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 and other qualified health care providers. With
school districts and county offices of education having the
ability to be reimbursed for all covered services to Medi-cal
eligible students, federal financial participation will
increase."
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California historically poor at drawing down Medicaid funding
through LEA billing. For many years California drawn down a low
share of Medicaid funding through the LEA billing option
relative to the number of eligible students in the state. A
2000 report by the U.S. General Accounting Office found that
California ranked in the bottom quartile of states by funding
received through this option. The amount claimed has been
increasing in recent years: a 2012 report from the DHCS on the
LEA billing option found that statewide reimbursement increased
from $60 million in 2000-01 and to $130 million in 2009-10.
But while California receives the largest total share of federal
funds, the amount the state receives per eligible student is low
relative to other states. In 2009-10, California served 240,000
of its 3.3 million eligible students, resulting in an average of
$159 per eligible student. The average among the 32 states
surveyed was $544 per eligible student. Nebraska (with 103,000
eligible students) received $796 per eligible student, Vermont
received $694 per eligible student, and Rhode Island received
$635 per eligible student (all figures include Medicaid
administrative funds).
Recent change in federal policy will expand services to many
more students. The LEA Medi-Cal Billing Option Program was
established in 1993 and has provided Medicaid funds to LEAs for
health-related services provided to students who have IEPs or
IFSPs. 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.
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.
In December, 2014, the Centers for Medicare and Medicaid
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Services (CMS) issued new guidance which will allow LEAs to
serve all Medical-eligible students, whether or not they have an
IEP or an IFSP. It is anticipated that this will result in
higher levels of claiming for services including:
Health and mental health evaluations
Health and mental health education
Medical transportation
Nursing services
Occupational therapy
Physical therapy
Physician services
Mental health and counseling services
School health aide services
Speech pathology services
Audiology services
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Targeted case management services for children with an
IEP or an IFSP
"Free Care Rule" eliminated. Under long-standing policy known
as the "free care rule," LEAs could not receive payment for
services which they made available without charge to Medi-Cal
eligible students or to the community at large unless all
students were billed for the service.
For example, if all children in a school received hearing
evaluations, Medi-Cal could not be billed for the hearing
evaluations provided to Medi-Cal recipients unless all students,
regardless of insurance status, were billed for the services as
well. This meant that before being able to bill, schools had to
bill a variety of private insurers as well as Medi-Cal. This
was an administrative burden that many LEAs found prohibitive.
In 2004 the state of Oklahoma won a legal challenge to the rule,
but the CMS continued to apply the rule to all other states. A
subsequent challenge to the rule by San Francisco Unified School
District in 2013 was also successful, but the policy did not
change until December of 2014.
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
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whether there is any charge for the service to the beneficiary
or the community at large. As a result, funding 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.
Denial by default after 45 days. Under current law, LEAs may
bill the Medi-Cal program for services on behalf of a student
who has other coverage only if that student's insurance company
has denied the claim. According to the author, LEAs have had
difficulty obtaining "denial of coverage" letters from insurance
companies. In order to prevent LEAs from being unable to bill
Medi-Cal due to a circumstance beyond their control, this bill
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. After 45 days the
claim is considered denied, and billing may proceed.
Charter schools and LEA billing option. The current law
definition of LEA used for purposes of the LEA billing option
includes the governing boards of school districts, county
offices of education, state special schools, and CSU and UC
campuses. It does not mention charter schools. According to
DCHS, some charter schools bill through school districts. It is
unclear if any charter schools currently bill independently,
though this does occur in other states. With changes in federal
guidance expected to result in significant expansion of
eligibility and elimination of administrative barriers to LEA
billing, and in recognition of the growing number of public
school students attending charter schools, staff recommends that
this bill be amended to add "a charter school" to the definition
of LEA.
Related legislation. SB 123 (Liu) of this Session requires the
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Legislative Analyst, in consultation with CDE and DHCS, to make
recommendations relative to the administration and oversight of
the School Medi-Cal Administrative Activities program.
AB 1133 (Achadjian) of this Session would have established a
4-year pilot program, the School-Based Early Mental Health
Intervention and Prevention Services Support Program, to provide
outreach, free regional training, and technical assistance for
local educational agencies in providing mental health services
at schoolsites. AB 1133 was approved by this Committee and held
in the Assembly Appropriations Committee.
AB 1018 (Cooper) of this Session 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.
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.
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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.
The Budget Act of 1998 provided $3 million in one-time
Proposition 98 funding to support technical assistance to school
districts in LEA billing through a consortium of county offices
of education. Related supplemental report language required the
consortium to report to the JLBC and the appropriate fiscal and
policy committees of the Legislature on the amount of Medi-Cal
LEA billing generated by this program in each fiscal year of the
program and on barriers to LEA billing and recommendations on
improving rates of LEA billing in the future.
REGISTERED SUPPORT / OPPOSITION:
Support
California School Nurses Organization (sponsor)
American Federation of State, County, and Municipal Employees
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American Nurses Association/California
Anaheim City School District
Association of California School Administrators
California Federation of Teachers
California School Boards Association
California School Employees Association
California School-Based Health Alliance
Children Now
Emery Unified School District
Lawndale Elementary School District
Magnolia School District
National Association of Social Workers - California Chapter
Nevada Joint Union High School District
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Special Education Local Plan Area Administrators of California
Sulphur Springs Union School District
Several individuals
Opposition
None on file
Analysis Prepared by:Tanya Lieberman / ED. / (916)
319-2087