BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 2608 (Bonilla) - Medi-Cal: Local Educational Agency Billing
Option.
Amended: June 28, 2012 Policy Vote: Health 9-0
Urgency: No Mandate: No
Hearing Date: August 6, 2012
Consultant: Jacqueline Wong-Hernandez
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 2608 expands, and makes permanent, provisions
relating to program improvement activities in the Medi-Cal Local
Billing Option (LBO) program, through which Local Educational
Agencies (LEAs) can receive federal funding for health care
services provided to Medi-Cal-eligible students, as specified.
Fiscal Impact:
LEAs: Millions of dollars in additional federal funds
reimbursing LEAs for 50% of specified expenses they
mandatorily incur under existing law.
Background: The LEA Medi-Cal LBO Program was established in 1993
to provide federal financial participation through Medicaid
reimbursement to LEAs for health-related services provided by
qualified medical practitioners to students who are enrolled in
Medi-Cal.
Funding for DHCS administrative activities and contractor costs
are currently governed by both law and practice through the DHCS
Provider Participation Agreement. Administrative funding is as
follows:
a. DHCS administrative and processing services costs
related to the management of the LEA Medi-Cal LBO, not to
exceed 1% of the amount payable to the LEA submitting the
claim.
b. DHCS audit administration and associated audit resources
costs to ensure fiscal accountability of LEA Medi-Cal LBO
and to comply with the Medicaid State Plan, not to exceed
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1% of the amount payable to the LEA submitting the claim.
c. DHCS costs required to fund and support the program
improvement activities in existing law using a contractor,
not to exceed a program wide amount of $1.5 million
annually. Current law specifies this fee is collected on
amounts in excess of a 2000-01 baseline amount ($60 million
in practice) received by LEAs. This fee is capped in
statute at $1.5 million and is collected through a 2.5% fee
against individual LEA paid claim amounts.
Existing law requires specified services provided by a LEA are
covered Medi-Cal benefits, to the extent federal financial
participation 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.
Existing law requires DHCS to make various LEA program
improvement activities, including:
a. Amending the Medicaid state plan with respect to the LBO
for services by LEAs to ensure that schools are reimbursed
for all eligible services that they provide that are not
precluded by federal requirements;
b. Eliminating and modifying state plan and regulatory
requirements that exceed federal requirements when they are
unnecessary;
c. Consulting regularly with the California Department of
Education; representatives of urban, rural, large and small
school districts; county offices of education, the local
education consortium; and LEAs in order to assist DHCS in
formulating the Medicaid state plan amendments; and
d. Filing an annual report with the Legislature.
Existing law further authorizes DHCS to enter into a sole source
contract to comply with these program improvement requirements.
Proposed Law: AB 2608 makes permanent and expands provisions
relating to program improvement activities in the Medi-Cal LBO
program, through which LEAs can receive federal funding
reimbursements for health care services provided to
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Medi-Cal-eligible students. The bill requires money collected
for administrative functions for program improvement activities
be proportionately reduced from federal Medicaid payments to all
participating LEAs so that no one LEA loses a disproportionate
share of its Medicaid payments. This bill also provides that the
federal regulations will govern LBO billing eligibility.
Related Legislation: SB 256 (Maddy) Ch. 654/1993, established
the LEA LBO program by requiring that services provided by a LEA
are a Medi-Cal-covered benefit.
SB 231 (Ortiz) Ch. 655/ 2001, enacted the LEA program
improvement activities requirements, required DHCS to obtain a
state plan amendment to accomplish various goals to enhance
reimbursement for Medi-Cal services provided at school sites and
student access to those services, and sunset various provisions
on January 1, 2006.
Staff Comments: School-based health services reimbursed by the
LEA LBO Program are primarily provided to students with
disabilities receiving special education services through an
Individualized Education Plan (IEP) or Individualized Family
Service Plan. Thus, absent federal reimbursement, the LEAs are
still required to provide (and pay for) these services.
Under this program, LEAs pay for health-related services and are
reimbursed for 50% of their costs through Medicaid FFP, for
students receiving these services who are also Medi-Cal
eligible. LEA services are delivered either through the LEAs
(which employ practitioners who provide the services on site) or
through local contracted practitioners. LEAs must annually
certify that the public funds expended for LEA services provided
are eligible for FFP. Subject to specified conditions, LEA
covered services can include: Health and mental health
evaluations and health and mental health education; medical
transportation; nursing services; occupational and physical
therapy; physician services; mental health and counseling
services; school health aide services; speech pathology
services; audiology services; and, targeted case management
services for children with an IEP or an individualized family
service plan.
This bill allows LEAs to continue to receive reimbursements for
50% of their eligible costs, and makes more of the LEAs
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activities (such as medical transportation) reimbursable by
using federal regulations instead of the more-restrictive state
regulations. Every additional dollar federal reimbursement
dollar received by an LEA frees up a revenue-limit (Proposition
98) dollar that the LEA can use for other educational purposes.
Absent this bill, the LEA would have to spend money out of its
budget to provide the required services.
In 2009-10, there were 391,919 LEA claims, total federal
Medicaid reimbursement was $220 million and average
reimbursement per claim was $122. Medi-Cal reimbursement in the
LEA Program has increased by 84 percent, growing from $59.6
million in FY 2000-01 to $109.9 million in FY 2008-09. Federal
funds also reimburse LEAs and DHCS for their costs to administer
the program.