BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 276  


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          Date of Hearing:  August 19, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 276  
          (Wolk) - As Amended July 16, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill updates code relating to the local educational agency  
          (LEA) Medi-Cal billing program to conform to recent federal  
          guidance that expands the services for which LEAs can bill  
          Medi-Cal. Specifically, this bill: 








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          1)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.


          2)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.  


          FISCAL EFFECT:


          1)Unknown, significant ongoing increased expenditures in the  
            Medi-Cal program from non GF-sources (local and federal  
            funds).  LEAs also reimburse DHCS's administrative costs.   
            Certain administrative cost reimbursements are subject to a  
            cap.     


          2)One-time costs of $250,000 (local/federal) for the fiscal  
            intermediary to adjust information technology systems. 


          3)The California Department of Justice notes an unquantifiable,  
            but potentially significant GF impact based on a potential for  
            lawsuits challenging whether DHCS adequately confirmed that  
            the LEA took reasonable measures to ascertain legally liable  
            third parties.  These lawsuits would be related to audits by  
            the federal government regarding FFP grants.   


          COMMENTS:








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          1)Purpose. 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 FFP will increase by  
            allowing school districts and county offices of education to  
            be reimbursed for all covered services to Medi-cal eligible  
            students. 


          2)Background. Historically, federal guidance on "free care"  
            stated Medicaid payment was not available for services  
            provided for free to the public, with some limited 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 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. 


            In addition, schools note another barrier to reimbursement  
            occurs when they seek private third-party reimbursement and  
            receive no response.  This bill allows LEAs to receive  
            reimbursement based on documentation that they submitted  
            claims for reimbursement by third parties and did not receive  
            a response within 45 days.  










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          3)Comments. As noted, it is unknown to what extent this bill and  
            new federal guidance will expand school-based health care  
            services. Although likely beneficial overall, staff notes any  
            significant expansion of the LEA billing option program poses  
            some concern about public dollars paying twice for services.   
            School-based services reimbursed through LEA billing are  
            generally services provided in a fee-for-service environment,  
            outside the "management" of managed care.  From a school's  
            perspective, it may seem an obvious way to receive more in  
            federal dollars.  However, it begs the question of why a  
            school is in a position of providing needed health care  
            services to students, on whose behalf the state is already  
            paying a monthly rate to Medi-Cal managed care plans to  
            comprehensively manage their health care needs.  School-based  
            health care has obvious advantages, and perhaps some services  
            are appropriately provided on a population basis at a school  
            site.  However, ideally, school-based care should be  
            integrated with the care provided and paid for through managed  
            care plans to prevent duplication of services and payment. 


            Consider the case of immunization. It may make sense and be  
            convenient for families for schools to offer immunizations to  
            students. However, to do this in an effective way, schools  
            need also to have the ability to communicate with the state's  
            immunization registry and/or providers at a student's medical  
            home, to ensure vaccination status is recorded and to ensure  
            vaccinations are not provided to a student who has already  
            received them.  For managed care plans, vaccination status of  
            their enrollees needs to be documented in order for plans to  
            receive quality ratings. One way to ensure no duplication is  
            for managed care plans to contract with schools or  
            school-based providers outside of the LEA billing process,  
            something that has, according to schools, been slow to occur.   
             


            Perhaps this bill is not the place for a wholesale  
            reexamination of the relationship between school-based care  








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            and managed care.  However, if school-based care grows  
            significantly, some additional oversight seems warranted to  
            assess the level of coordination or potential duplication of  
            services and payment. 


            Finally, DHCS notes certain administrative reimbursements are  
            subject to a cap, specifically audit and contract staff  
            functions.  Because the fiscal impact is unknown and this  
            change could result in significantly more utilization of the  
            LEA billing option, reexamination of these caps seem  
            appropriate to ensure the caps can be adjusted based on  
            program growth.


          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081