Bill Text: CA AB2034 | 2021-2022 | Regular Session | Amended

California Assembly Bill 2034 (Prior Session Legislation)

CA State Legislature page for AB2034

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Local educational agency: Medi-Cal billing option.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Engrossed - Dead) 2022-06-29 - In committee: Hearing postponed by committee. [AB2034 Detail]

Download: California-2021-AB2034-Amended.html

Amended IN Assembly March 21, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 2034

Introduced by Assembly Member O’Donnell
(Coauthor: Senator Cortese)

February 14, 2022

An act to amend Section 14115.8 of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL'S DIGEST

AB 2034, as amended, O’Donnell. Local education agency: Medi-Cal billing option.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed by, and funded pursuant to, federal Medicaid program provisions. Existing law establishes the Administrative Claiming process under which the department is authorized to contract with local governmental agencies and local educational consortia for the purpose of obtaining federal matching funds to assist with the performance of administrative activities relating to the Medi-Cal program that are provided by a local governmental agency or local educational agency (LEA). Existing law also provides that specified services provided by LEAs are covered Medi-Cal benefits and are reimbursable on a fee-for-service basis under the LEA Medi-Cal Billing Option.

Existing law requires the department to engage in specified activities relating to the LEA Medi-Cal Billing Option, including amending the Medicaid state plan to ensure that schools are reimbursed for all eligible services, consulting with specified entities in formulating state plan amendments, examining methodologies for increasing school participation in the LEA Medi-Cal Billing Option, and conducting an audit of a Medi-Cal Billing Option claim consistent with prescribed requirements, such as generally accepted accounting principles. Existing law requires the department to file an annual report with the Legislature that includes, among other things, a summary of department activities.

This bill would require the department to revise the state plan amendment to establish a revised audit process for Medi-Cal Billing Option claims submitted for dates of service on or after January 1, 2024, pursuant to specified requirements. The bill would require the department to provide ~~either~~ technical assistance to the LEA or to ~~expedite~~ complete appeals by the LEA within 180 days if an audit disallows a specified percentage of an LEA’s total value of claims. The bill would require, in an appeal of an audit disallowance related to insufficient documentation, medical necessity, or reasonableness, the burden of proof to be on the auditor to demonstrate by a preponderance that the claim falls outside of the usual and customary prohibit an auditor’s determination from superseding the standards of practice of the practitioner, as specified. The bill would require the department’s summary of activities in the above-described report to also include training for LEAs and a summary of the number of audits conducted of Medi-Cal Billing Option claims, as specified. The bill would require the department to ensure, for those claims, that “medical necessity” for a beneficiary under 20 years of age has a specified meaning. The bill would make other technical, nonsubstantive changes to these provisions.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 14115.8 of the Welfare and Institutions Code is amended to read:

14115.8.

(a) (1) The department shall amend the Medicaid state plan with respect to the billing option for services by local educational agencies (LEAs), to ensure that schools shall be reimbursed for all eligible services that they provide that are not precluded by federal requirements.

(2) The department shall examine methodologies for increasing school participation in the Medi-Cal Billing Option for LEAs so that schools can meet the health care needs of their students.

(3) The department, to the extent possible, shall simplify claiming processes for LEA billing.

(4) The department shall eliminate and modify state plan and regulatory requirements that exceed federal requirements when they are unnecessary.

(5) (A) The department shall, in consultation with the LEA Ad Hoc Workgroup established pursuant to subdivision (c), and consistent with any applicable federal requirements, issue and regularly maintain a program guide for the LEA Medi-Cal Billing Option program. The program guide shall contain fiscal and programmatic compliance information regarding processes, documentation, and guidance necessary for the proper submission of claims, and auditing of LEAs, charter schools, and community colleges, as required under the LEA Medi-Cal Billing Option program.

(B) The program guide described in subparagraph (A) shall include, but not be limited to, state plan amendments, Frequently Asked Questions, policy and procedure letters, trainings, provider manuals, and all other types of instructional materials relevant to the LEA Medi-Cal Billing Option program.

(C) The department shall distribute the program guide to all participating LEAs, charter schools, and community colleges by January 1, 2020. Distribution of the program guide may occur by electronic mail or by notification by electronic mail of the posting of the guide on the department’s internet website.

(D) The department shall only adopt a revision of the program guide after providing 30 calendar days’ written notification of the revision, including a statement of justification, to the LEA Ad Hoc Workgroup and all other participating LEAs, charter schools, and community colleges. The department may provide written notice by electronic mail. Under extraordinary circumstances, when revisions are necessary to reflect changes required by state or federal law or otherwise mandated by the federal Centers for Medicare and Medicaid Services and those changes require immediate action, the department may provide less than 30 calendar days’ written notice.

(b) The department shall conduct an audit of a Medi-Cal Billing Option claim consistent with, but not limited to, all of the following:

(1) (A) The program guide and any revisions made pursuant to paragraph (5) of subdivision (a), including any revisions that are necessary to reflect changes required by state or federal law or otherwise mandated by the federal Centers for Medicare and Medicaid Services, that are in effect at the time the service was provided.

(B) Generally accepted accounting principles.

(C) Federal audit regulations, as set forth in Part 200 (commencing with Section 200.0) of Title 2 of the Code of Federal Regulations (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), or its successor.

(D) Reasonable cost principles under the federal Medicare Program, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.

(E) The federal Centers for Medicare and Medicaid Services Provider Reimbursement Manual Part 1 (CMS Publication 15-1).

(F) Any and all applicable federal or state statutes and regulations.

(2) The department shall revise the state plan amendment to establish a revised audit process for a Medi-Cal Billing Option claim submitted for dates of service on or after January 1, 2024, as follows:

(A)The department shall transition to targeted risk assessment audits, as prescribed in the department’s audit plan, in which no more than 10 percent of LEA claims are audited each year. The department’s annual selection of targeted risk assessment audits shall be based upon factors including, but not limited to, the per student amount claimed, the number of students with individualized education programs, the average cost to serve a particular category of disability, and the relevant cost of living in the geographic area.
~~(B)For purposes of these claims, the department shall clarify that “medical necessity” has the same meaning as that term is defined in paragraph (1) of subdivision (b) of Section 14059.5.~~
(A) The department’s audit plan shall include a risk assessment of LEAs using paid claim data to determine the appropriate level of oversight, including the percentage of LEA claims to be audited in a given year to ensure that audits conducted are primarily focused on potential instances of fraud, waste, or abuse of LEA services and Medi-Cal funds.
(B) The department’s audit plan shall make reimbursement fraud, waste, and abuse the primary focus of recoupment.

(C) (i) The department shall complete an audit and notify a an LEA of the audit findings within 12 months of the date that the Cost and Reimbursement Comparison Schedule (CRCS) is due.

(ii) The department shall perform final settlement on a claim, including completion of the appeals process, as defined in Section 14171, within three years from the date the CRCS is submitted.

(iii) In the event that a an LEA’s audit appeal is not fully and finally resolved by the department within 300 days after the date a notice of appeal is filed, the LEA may elect to seek immediate relief in superior court in the same manner as if the department’s appeal process had been concluded.

(D) If an audit disallows more than 25 percent of a an LEA’s total value of claims in a given year, the department shall provide technical assistance to the LEA that is specific to the reasons that claims were disallowed, and shall assist with the preparation of a corrective action plan that outlines the actions needed to avoid future disallowances.

(E) For appeals of audits disallowing 50 percent or more of a an LEA’s total value of claims in a given year, those appeals shall be ~~expedited, as prescribed by the department, and the LEA shall be authorized to opt out of the departmental prescribed informal conference as described in Section 14171.~~ completed within 180 days.

(F) Recognizing that schools shall be reimbursed for all eligible services that they provide that are not precluded by federal requirements, an auditor’s determination shall not supersede the ~~usual and customary practices~~ standards of practice of the practitioner submitting the claim or the standards of the California School Accounting Manual. In an appeal of an audit disallowance related to insufficient documentation, medical necessity, or reasonableness, the burden of proof shall be on the auditor to demonstrate by a preponderance of the evidence that the claim falls outside of the usual and customary practice of the practitioner and the California School Accounting Manual. claim.

(3) For purposes of this subdivision, an audit shall refer to the audit and cost recovery process described in Section 14170.

(c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may issue and regularly maintain the program guide described in this section without taking regulatory action.

(d) If a rate study for the LEA Medi-Cal Billing Option is completed pursuant to Section 52 of Chapter 171 of the Statutes of 2001, the department, in consultation with the entities named in paragraph (1) of subdivision (e), shall implement the recommendations from the study, to the extent feasible and appropriate.

(e) (1) In order to assist the department in formulating the state plan amendments required to implement this section, the department shall regularly consult with the LEA Ad Hoc Workgroup, consisting of, but not limited to, representatives of the State Department of Education, urban, rural, large and small school districts, and county offices of education, local education consortia, and LEAs. It is the intent of the Legislature that the department also consult with staff from Region IX of the federal Centers for Medicare and Medicaid Services, experts from the fields of both health and education, and state legislative staff.

(2) The department shall ensure that any LEA participating in the Medi-Cal Billing Option program may participate virtually in any trainings or stakeholder meetings, including those meetings conducted pursuant to paragraph (1).

(f) Notwithstanding any other law, or any other contrary state requirement, the department shall take whatever action is necessary to ensure that, to the extent there is capacity in its certified match, an LEA shall be reimbursed retroactively for the maximum period allowed by the federal government for any department change that results in an increase in reimbursement to LEA providers.

(g) The department may undertake all necessary activities to recoup matching funds from the federal government for reimbursable services that have already been provided in the state’s public schools. The department shall prepare and take whatever action is necessary to implement all regulations, policies, state plan amendments, and other requirements necessary to achieve this purpose.

(h) The department shall file an annual report with the Legislature that shall include at least all of the following:

(1) A copy of the annual comparison required by subdivision (k).

(2) A state-by-state comparison of school-based Medicaid total and per eligible child claims and federal revenues. The comparison shall include a review of the most recent two years for which completed data is available.

(3) A summary of department activities, including training for LEAs, 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.

(4) A listing of all school-based services, activities, and providers approved for reimbursement by the federal Centers for Medicare and Medicaid Services in other state plans that are not yet approved for reimbursement in California’s state plan and the service unit rates approved for reimbursement.

(5) The official recommendations made to the department by the entities named in subdivision (e) and the action taken by the department regarding each recommendation.

(6) A one-year timetable for state plan amendments and other actions necessary to obtain reimbursement for those items listed in paragraph (4).

(7) Identification of any barriers to LEA reimbursement, including those specified by the entities named in subdivision (e), that are not imposed by federal requirements, and a description of the actions that have been, and will be, taken to eliminate them.

(8) A summary of the number of audits conducted of Medi-Cal Billing Option program claims, the amount of funds disallowed per LEA, as well as efforts made to provide technical assistance and develop corrective action plans, pursuant to subparagraph (D) of paragraph (2) of subdivision (b).

(i) (1) These activities shall be funded and staffed by proportionately reducing federal Medicaid payments allocable to LEAs for the provision of benefits funded by the federal Medicaid program under the billing option for services by LEAs specified in this section. Moneys collected as a result of the reduction in federal Medicaid payments allocable to LEAs shall be deposited into the Local Educational Agency Medi-Cal Recovery Fund, which is hereby established in the Special Deposit Fund established pursuant to Section 16370 of the Government Code. These funds shall be used, upon appropriation by the Legislature, only to support the department to meet all the requirements of this section. If at any time this section is repealed, it is the intent of the Legislature that all funds in the Local Educational Agency Medi-Cal Recovery Fund be returned proportionally to all LEAs whose federal Medicaid funds were used to create this fund. The annual amount funded pursuant to this paragraph shall not exceed one million five hundred thousand dollars ($1,500,000).

(2) Moneys collected under paragraph (1) shall be proportionately reduced from federal Medicaid payments to all participating LEAs so that no one LEA loses a disproportionate share of its federal Medicaid payments.

(j) (1) The department may enter into a sole source contract to comply with the requirements of this section.

(2) The level of additional staff to comply with the requirements of this section, including, but not limited to, staff for which the department has contracted for pursuant to paragraph (1), shall be limited to that level that can be funded with revenues derived pursuant to subdivision (i).

(k) The activities of the department shall include all of the following:

(1) An annual comparison of the school-based Medicaid systems in comparable states.

(2) Efforts to improve communications with the federal government, the State Department of Education, and LEAs.

(3) The development and updating of written guidelines to LEAs regarding best practices to avoid audit exceptions, as needed.

(4) The establishment and maintenance of a an LEA user-friendly, interactive internet website.

(5) Collaboration with the State Department of Education to help ensure LEA compliance with state and federal Medicaid requirements and to help improve LEA participation in the Medi-Cal Billing Option for LEAs.

(l) For purposes of these claims, the department shall ensure that for a beneficiary under 20 years of age, “medical necessity” has the same meaning as that term is defined in paragraph (1) of subdivision (b) of Section 14059.5.