BILL ANALYSIS Ó SB 276 Page 1 Date of Hearing: August 19, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 276 (Wolk) - As Amended July 16, 2015 ----------------------------------------------------------------- |Policy |Health |Vote:|19 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Education | |7 - 0 | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- 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: SB 276 Page 2 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: SB 276 Page 3 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. SB 276 Page 4 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 SB 276 Page 5 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