BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 276|
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                                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  








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          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:








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          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  








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            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;








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             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  








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            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  








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            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  








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          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









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