BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 276| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 276 Author: Wolk (D) Amended: 7/16/15 Vote: 21 SENATE HEALTH COMMITTEE: 8-0, 4/15/15 AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Pan, Roth, Wolk NO VOTE RECORDED: Nielsen SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15 AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen SENATE FLOOR: 40-0, 6/1/15 AYES: Allen, Anderson, Bates, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone, Vidak, Wieckowski, Wolk ASSEMBLY FLOOR: 78-0, 8/31/15 - See last page for vote SUBJECT: Medi-Cal: local educational agencies SOURCE: California School Nurses Organization DIGEST: This bill requires the Department of Health Care Services (DHCS) to seek federal financial participation for covered services that are provided by a local educational agency (LEA) to a child who is an eligible Medi-Cal beneficiary, regardless of whether the child has an individualized education plan (IEP) or an individualized family service plan (IFSP), or SB 276 Page 2 whether those same services are provided at no charge to the beneficiary or to the community at large, if the LEA takes all reasonable measures to ascertain and pursue claims for payment of covered services against legally liable third parties. Assembly Amendments prohibit the Senate-approved changes from being implemented until DHCS obtains any necessary approval, and expand the definition of an LEA to include the governing body of a charter school. ANALYSIS: Existing law: 1)Establishes the Medi-Cal program, administered by DHCS, under which qualified low-income persons receive health care benefits. 2)Requires that specified services provided by an 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 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 for children with an IEP or an IFSP. 4)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. This bill: SB 276 Page 3 1)Requires, subject to 2) below, DHCS to seek FFP for covered services that are provided by an LEA to a child who is an eligible Medi-Cal beneficiary, regardless of either of the following: a) Whether the child has an IEP or an IFSP; and, b) Whether those same services are provided at no charge to the beneficiary or to the community at large. 2)Implements the requirement in 1) above if the LEA takes all reasonable measures to ascertain and pursue claims for payment of covered services against legally liable third parties pursuant to a specified provision of federal Medicaid law that requires that states take all reasonable measures to ascertain and pursue claims for payment of health care items and services against legally liable third parties. 3)Requires, if a legally liable third party receives a claim submitted by an LEA pursuant to 2) above, the legally liable third party to either reimburse the claim or issue a notice of denial of non-coverage of services or benefits. 4)Permits the LEA, if there is no response to a claim submitted to a legally liable third party by an LEA within 45 days, to bill the Medi-Cal program. Requires the LEA to retain a copy of the claim submitted to the legally liable third party for a period of three years. 5)Prohibits the above-described provisions from being implemented until DHCS obtains any necessary federal approvals. 6)Expands the definition of an LEA to include the governing body of a charter school. 7)States legislative intent in enacting this bill to ensure that a school district or county office of education that is authorized as an LEA Medi-Cal provider is assured that all options for FFP are available, and the Legislature encourages SB 276 Page 4 LEAs to utilize reimbursed funds to hire credentialed school nurses to supplement, not supplant, existing LEA health services personnel. Comments 1)Author's statement. According to the author, "[T]his bill will allow LEAs to receive reimbursement for qualified services provided for all 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. This bill will allow schools to be reimbursed for all services provided to all Medi-Cal eligible students. 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. 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) 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 percent 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: a) Health and mental health evaluations and health and mental health education; b) Medical transportation; c) Nursing services; d) Occupational therapy; e) Physical therapy; f) Physician services; SB 276 Page 5 g) Mental health and counseling services; h) School health aide services; i) Speech pathology services; j) Audiology services; and, aa) 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 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: a) IEP or IFSP developed for the special education student; b) California Children's Services Program; c) Short-Doyle Program; d) Medi-Cal field office authorization; and, e) Prepaid health plan authorization (including Primary Care Case Management). 1)Recent federal guidance on Medicaid payments for "free care." In December 2014, the federal Centers for Medicare & Medicaid Services (CMS) issued a State Medicaid Director Letter regarding Medicaid payment for services covered under a state's Medicaid plan to an eligible Medicaid beneficiary that are available without charge to the beneficiary, including services that are available without charge to the community at large, or "free care." Historically, 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. 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 SB 276 Page 6 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. CMS states the goal of its new guidance is to facilitate and improve access to quality healthcare services and improve the health of communities. Prior to the CMS guidance in 2014, DHCS indicated there are two exceptions to the free care rule: (a) Medicaid covered services provided as part of an IEP or IFSP; and (b) services provided by Title V of the Social Security Act (the Maternal Child Health Services Block Grant). DHCS indicates services provided as part of an IEP/IFSP are exempt from the fee care rule, they are not exempt from the third-party liability (TPL) requirement. If any student has Other Health Coverage, those third party insurers must be billed prior to billing Medi-Cal for the service. The TPL requirement is based on the basic premise under federal Medicaid law and regulation that Medicaid is generally the payor of last resort. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Assembly Appropriations Committee: 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 SB 276 Page 7 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. SUPPORT: (Verified8/31/15) California School Nurses Organization (source) American Federation of State, County, and Municipal Employees American Nurses Association California Anaheim City School District California Black Health Network California Chapter National Association of Social Workers California Federation of Teachers California School-Based Health Alliance California School Boards Association Children Now California School Employees Association Emery Unified School District Hayward Unified School District Lawndale Elementary School District Magnolia School District Manteca Unified School District Nevada County Superintendent of Schools Holly Hermansen Nevada Joint Union High School District Ripon Unified School District Special Education Local Plan Area Administrators of California San Joaquin County Office of Education Sulphur Springs Unified School District OPPOSITION: (Verified 8/31/15) None received ARGUMENTS IN SUPPORT: This bill is sponsored by the California School Nurses Organization (CSNO), which writes that SB 276 Page 8 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 in December 2014, 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 it has been well documented 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 concludes enhanced LEA billing will augment the current system while providing care for children who require medical services to function in the least restrictive environment. ASSEMBLY FLOOR: 78-0, 8/31/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Gallagher, Holden Prepared by:Scott Bain / HEALTH / 8/31/15 19:58:20 SB 276 Page 9 **** END ****