BILL ANALYSIS �
AB 2608
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Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2608 (Bonilla) - As Amended: March 29, 2012
SUBJECT : Medi-Cal: local educational agency billing option.
SUMMARY : Eliminates the sunset clause and revises existing
provisions implementing the Medicaid local billing option (LBO)
that allows local educational agencies (LEAs) to obtain federal
matching funds for health care services provided by schools to
Medi-Cal eligible students. Specifically, this bill :
1)Requires the Department of Health Care Services (DHCS) to seek
a state plan amendment (SPA) and to revise applicable
regulatory requirements pertaining to medical transportation
services provided by LEAs so that LEAs may seek reimbursement
for services as allowed under federal law.
2)Specifies that the existing $1.5 million limit on the amount
of funds that may be withheld by DHCS is for the purpose of
supporting DHCS required activities, adds an additional amount
up to 1% for funding administrative and processing service
costs and an additional 1% to be withheld to fund work and
related administrative costs associated with audit
requirements.
3)Requires funds withheld from the federal matching funds due to
each LEA be collected by reducing payments to all
participating LEAs proportionately and deletes the requirement
that these funds derive only from an amount that exceeds the
baseline amount as set by LEA billing revenues for the 2000-01
fiscal year (FY).
4)Adds a requirement that DHCS include, in the annual report
filed with the Legislature, an accounting of funds that are
withheld from federal matching funds and used by DHCS to fund
staff and administer the LEA billing option. Requires the
report to detail the amounts withheld from funds that would
otherwise be due to each participating LEA.
5)Adds a requirement that the activities of DHCS include
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collaboration with the California Department of Education
(CDE) in order to ensure LEA compliance with state and federal
requirements and to help improve LEA participation.
EXISTING LAW :
1)Establishes the Medi-Cal program, administered by DHCS, to
provide comprehensive health care services to low-income,
aged, blind, and disabled individuals and families.
2)Requires DHCS to amend the Medicaid state plan with respect to
the LBO for services by LEAs to ensure that schools are
reimbursed for all eligible services they provide.
3)Requires DHCS to regularly consult with specified entities to
assist in the formulating of the SPAs.
4)Permits DHCS to enter into a sole source contract to undertake
all necessary activities to recoup matching funds from the
federal government for reimbursable services provided in the
State's public schools.
5)Requires these activities to be funded and staffed by
proportionately reducing federal Medi-Cal payments allocable
to LEAs that exceed a baseline amount. Requires these funds
to be used only to support DHCS administrative activities in
order to meeting federal and state requirements and caps the
amount at $1.5 million annually.
6)Requires DHCS to file an annual report with the Legislature
that includes, among other items, a state-by-state comparison
of school-based Medicaid total and per eligible child claims
and federal revenues. Requires the comparison to include a
review of the most recent two years for which completed data
is available, a summary of DHCS activities and an explanation
of how each activity contributed toward narrowing the gap
between California's per eligible student federal fund
recovery and the per student recovery of the top three states.
7)Sunsets the provisions of 2) through 6) above on January 1,
2013.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
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committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
necessary to prevent school districts from losing federal
funds for health services that school districts are required
to provide. In addition, the author points out, existing
state policies prevent school districts from seeking federal
reimbursement for certain school transportation that is
otherwise reimbursable under federal guidelines. The author
states that despite the efforts made under SB 231 (Ortiz),
Chapter 655, Statutes of 2001, the LBO program needs further
improvement in order to maximize the amount of money school
districts are eligible to receive. In light of the current
budget proposal to eliminate funding for home-to-school
transportation, overly restrictive state rules and regulations
need to be better aligned with federal rules to allow for
reimbursement for transportation of students with
disabilities. The author argues that expanding the LBO
program in this fashion would generate millions of dollars
statewide for necessary school transportation for students
with disabilities. For example, Los Angeles Unified School
District (LAUSD) currently spends $77 million on
transportation for 13,000 students with disabilities.
However, under the current State rules, LAUSD is only able to
receive $2 million in federal reimbursement. Currently, State
rules do not allow reimbursement for a child who requires
transportation in a vehicle adapted to serve the needs of the
disabled such as a specially adapted school bus unless the
child is in a wheel chair or a gurney. According to the
author, federal rules are not so restrictive.
The author also states that greater transparency and
accountability in the work performed by DHCS is also needed.
DHCS is able to withhold certain amounts from the federal
reimbursement dollars that go to schools in order to offset
the costs to DHCS for administering the LBO program. The
author argues that protecting and properly accounting for
these withheld amounts ensures that schools are receiving the
federal money they are due.
2)BACKGROUND . California established the LBO program in 1993 to
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allow school districts to claim federal reimbursement for, and
match local education dollars already being spent on, health
services for Medi-Cal children. DHCS and CDE, along with a
consortium of private foundations, collaborated to develop the
LBO program which allows LEAs to generate more funds for
services provided to California's children. DHCS works
directly with the LEA Ad Hoc Workgroup Advisory Committee (LEA
Committee) that was organized in 2001 to identify barriers for
existing and potential LEA providers and to recommend new LBO
program services. LEA Committee members represent urban,
rural, large and small school districts, county offices of
education, the local education consortium, local educational
agencies, and CDE. According to DHCS, nationwide, federal
Medicaid reimbursements provide crucial revenues allowing
schools to provide needed health services.
In April 2000, the United States Government Accountability
Office ranked California in the bottom quartile among states
that have school-based Medicaid programs with respect to the
amount of its LEA claims per Medicaid-eligible child. In
2001, SB 231 created methods to increase the per-student
amount of Medicaid reimbursements received by the State of
California to simplify the claiming process, provided funds
for the state administrative activities, and authorized a sole
source contract to assist with compliance. These provisions
are due to sunset January 1, 2013.
3)DHCS PROPOSED BUDGET TRAILER BILL . DHCS is also proposing to
delete the January 1, 2013 LBO program sunset date. However
the DHCS proposal is through the Budget as Budget trailer bill
language (TBL). The TBL also eliminates the requirement that
a baseline LBO funding amount must be met prior to funding LBO
contractor costs, and removes the maximum annual funding
amount of $1.5 million for DHCS administrative and contractor
costs. According to DHCS, eliminating the baseline
requirement prior to funding the LBO administrative costs
would allow DHCS to reduce federal Medicaid payments to fund
contractor costs without delay. Not acting could potentially
restrict DHCS from generating sufficient funds to cover all
necessary contractor costs. The LBO program baseline funding
level for FY 2000-01 was approximately $60 million. DHCS must
monitor reimbursements to the LEAs to ensure the baseline
requirement is met prior to funding contractor costs required
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for the LBO program.
However, unlike this bill the TBL makes the annual funding an
amount agreed upon between DHCS and the LEA Committee. DHCS
also states that eliminating the maximum annual funding amount
of $1.5 million for contractor costs and making the annual
funding an amount agreed upon between DHCS and the LEA
Committee would allow sufficient flexibility to accommodate
reasonable cost increases associated with contract services.
The current amount has remained static since 2001. For FY
2012-13, DHCS is proposing to use $820,000 of the federal
funds from the LBO funding to pay for 14 positions.
4)SUPPORT . LAUSD, sponsor of this bill writes in support that
the LBO program allows school districts to claim federal
reimbursement for health services provided to Medi-Cal
eligible children. According to LAUSD, for FY 2008-09, the
LBO program provided almost $110 million federal dollars to
California schools. The sponsor points out that this money is
used to support essential health and mental health related
services to student such as school nurses, counseling, speech
therapy, physical therapy, and specialized transportation, as
well as funds to assist with outreach and enrollment in
Medi-Cal insurance for low income students. Since 2001, LAUSD
reports receiving $120 million in federal funding. LAUSD, in
further support states the DHCS plays an important role in
coordinating the LBO program and helping to maximize the
federal money school districts receive through the program.
According to LAUSD, many of the responsibilities of DHCS
related to the LBO program are set to expire in 2013. This
bill is needed to continue DHCS efforts to increase the amount
of Medicaid reimbursement received by California schools. In
addition, LAUSD argues, this bill seeks a number of
improvements to the LBO Program. LAUSD also argues, in
support, that greater transparency and accountability in the
work performed by DHCS is needed. According to LAUSD, DHCS is
able to withhold certain amounts from the federal
reimbursement dollars that go to schools in order to offset
the costs to DHCS for administering the LBO program. LAUSD
states that protecting and properly accounting for these
withhold amounts ensures that schools are receiving the
federal money they are due.
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5)PREVIOUS LEGISLATION .
a) SB 270 (Ducheny), Chapter 712, Statutes of 2010, the
2010-11 Budget Bill required DHCS to withhold 1% of LEA
reimbursements, not to exceed $650,000, to fund audit costs
and to make public, quarterly accountings of expenditures.
b) AB 1540 (Committee on Health), Chapter 298, Statutes of
2009, extended the LBO program from January 1, 2010, to
January 1, 2013, and allowed DHCS to continue a sole source
contract to assist with program enhancements.
c) AB 2950 (Daucher), Chapter 131, Statutes of 2006,
eliminated reductions in Medi-Cal payments for late claims
submissions in programs for which there is no state general
fund match, including the LBO and the Targeted Case
Management program.
d) AB 131 (Committee on Budget), Chapter 80, Statutes of
2005, the 2005 health trailer bill, extended the sunset
date enacted in SB 231, from January 1, 2006 to January 1,
2010.
e) SB 231 required DHCS to obtain a SPA to accomplish
various goals to enhance reimbursement for Medi-Cal
services provided at school sites and access by students to
those services.
f) AB 430 (Cardenas), Chapter 171, Statutes of 2001,
allowed LEAs participating in the LBO program to contribute
funds to DHCS to fund a contract for a rate study for the
LBO program.
g) AB 2780 (Gallegos), Chapter 310, Statutes of 1998.
established the LEA Medi-Cal technical assistance project
through CDE. The project supported technical assistance
and focused on group training to teach school district
personnel how to maximize reimbursement of federal funds
for Medi-Cal services and case management.
h) AB 911 (Vasconcellos), Chapter 305, Statutes of 1995,
required DHCS to adopt emergency regulations to authorize
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LEAs to bill the Medi-Cal program or services provided by
credentialed professionals.
i) SB 256 (Maddy), Chapter 654, Statutes of 1993,
authorized and mandated the establishment of the LBO
program.
REGISTERED SUPPORT / OPPOSITION :
Support
Los Angeles Unified School District
Opposition
None on file
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097