BILL NUMBER: SB 123	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 12, 2015
	AMENDED IN SENATE  APRIL 6, 2015

INTRODUCED BY   Senator Liu

                        JANUARY 15, 2015

   An act to  add and repeal Section 33134 of the Education
Code, and to  amend Section 14132.47  of 
 of, and to a   dd and repeal Section 14132.465 of,
 the Welfare and Institutions Code, relating to Medi-Cal.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 123, as amended, Liu.  Superintendent of Public
Instruction: report:   Report:  School-Based
Medi-Cal Administrative Activities program.
   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 an
administrative claiming process under which local governmental
agencies and local educational consortia contract with the department
for the purpose of obtaining federal matching funds to assist with
the performance of administrative activities relating to the Medi-Cal
program. Existing law defines a local educational agency for these
purposes as a local educational agency that participates under the
process as a subcontractor to the local educational consortium in its
service region.
   This bill would require the  Superintendent of Public
Instruction   Legislative Analyst, in consultation with
the State Department of Education and the State Department of Health
Care Services,  to review and prepare specific recommendations
relative to the administration and oversight of the School-Based
Medi-Cal Administrative Activities program. The bill would require
the  Superintendent   Legislative Analyst 
to submit a report containing the specific recommendations to the
Legislature and the Governor by July 1, 2016, and would require the
report to include, but not necessarily be limited to, an evaluation
of specified entities, administrative structures, and information.
   Existing law authorizes a participating local governmental agency
or a local educational consortium to charge an administrative fee to
any entity claiming Administrative Claiming through that agency.
   This bill would require the  department  
State Department of Health Care Services  to annually post on
its Internet Web site the administrative fee percentage charged by
each local governmental agency or local educational consortium.
   This bill also would make various technical and nonsubstantive
changes.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 33134 is added to the
Education Code, to read:
   33134.  
   SECTION 1.    Section 14132.465 is added to the 
 Welfare and Institutions Code   ,  immediately
following Section 14132.46  , to read: 
    14132.465.   (a) The  Superintendent 
 Legislative Analyst, in consultation with the State Department
of Education and the State Department of Health Care Services, 
shall review and prepare specific recommendations relative to the
administration and oversight of the School-Based Medi-Cal
Administrative Activities program. A report containing the specific
recommendations shall be submitted to the Legislature and the
Governor by July 1, 2016. The  Superintendent's 
report shall consider the report on the School-Based Medi-Cal
Administrative Activities program issued by the California State
Auditor in 2015, and shall include, but not necessarily be limited
to, an evaluation of all of the following:
   (1) The appropriate state agency or agencies to administer the
program.
   (2) Oversight of the administration of the program, including
oversight of the state agency, local governmental agencies, and local
educational consortia.
   (3) The structure of the program and role of each entity,
including the local governmental agencies and local educational
consortia, how the structures and roles vary across the state, and
the efficiency of those structures and roles in providing funds to
local educational agencies.
   (4) The relationships, interactions, and communications state
agencies have with the federal Centers for Medicare and Medicaid
Services, and the process used to disseminate information from the
federal Centers for Medicare and Medicaid Services to local
educational agencies.
   (5) The process for reimbursing claims submitted by local
educational agencies, including the amount reimbursed compared to the
amount claimed, the time between submission of a claim and the
reimbursement of that claim, and how the claim and reimbursement
process varies across the state.
   (6) The purposes for which local educational agencies use program
funds.
   (7) The relationship between local governmental agencies or local
educational consortia and the private or public entities that have
been subcontracted to assist with the performance of administrative
activities.
   (8) The rates charged by the local governmental agency and local
educational consortia, how those rates vary across the state, and how
rates are determined.
   (9) The ability of a local educational agency to contract with a
local governmental agency or a local educational consortium of its
choosing.
   (10) The feasibility of convening a local educational agency
advisory body for the purposes of providing technical assistance to
local educational agencies and communicating with the administering
state agency.
   (11) The extent to which the state is maximizing federal funds
available for the program.
   (12) How capacity to operate the program can be built within local
educational agencies.
   (b) For purposes of this section, "local governmental agency"
shall have the same meaning as specified in subdivision (n) of
Section 14132.47 of the Welfare and Institutions Code, "local
educational agency" shall have the same meaning as specified in
subdivision (o) of Section 14132.47 of the Welfare and Institutions
Code, and "local educational consortium" shall have the same meaning
as specified in subdivision (p) of Section 14132.47 of the Welfare
and Institutions Code.
   (c) (1) A report to be submitted to the Legislature pursuant to
subdivision (a) shall be submitted in compliance with Section 9795 of
the Government Code.
   (2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on January 1, 2021.
  SEC. 2.  Section 14132.47 of the Welfare and Institutions Code is
amended to read:
   14132.47.  (a) It is the intent of the Legislature to provide
local governmental agencies the choice of participating in either or
both of the Targeted Case Management (TCM) and Administrative
Claiming process programs at their option, subject to the
requirements of this section and Section 14132.44.
   (b) The department may contract with each participating local
governmental agency or each local educational consortium to assist
with the performance of administrative activities necessary for the
proper and efficient administration of the Medi-Cal program, pursuant
to Section 1903(a) of the federal Social Security Act (42 U.S.C.
Sec. 1396b(a)), and this activity shall be known as the
Administrative Claiming process.
   (c) (1) Subject to the requirements of paragraph (2) of
subdivision (f), as a condition for participation in the
Administrative Claiming process, each participating local
governmental agency or each local educational consortium shall, for
the purpose of claiming federal Medicaid reimbursement, enter into a
contract with the department and shall certify to the department the
total amount the local governmental agency or each local educational
consortium expended on the allowable administrative activities.
   (2) The department shall deny the claim if it determines that the
certification is not adequately supported, or does not otherwise
comply with federal requirements, for purposes of claiming federal
financial participation.
   (d) Each participating local governmental agency or local
educational consortium may subcontract with private or public
entities to assist with the performance of administrative activities
necessary for the proper and efficient administration of the Medi-Cal
program under the conditions specified by the department in
regulations.
   (e) Each Administrative Claiming process contract shall include a
requirement that each participating local governmental agency or each
local educational consortium submit a claiming plan in a manner that
shall be prescribed by the department in regulations developed in
consultation with local governmental agencies.
   (f) (1) The department shall require that each participating local
governmental agency or each local educational consortium certify to
the department both of the following:
   (A)  The expenditure of 100 percent of the cost of performing
Administrative Claiming process activities. The funds expended for
this purpose shall be from the local governmental agency's general
fund or the general funds of local educational consortia or from any
other funds allowed under federal law and regulation.
   (B) In each fiscal year that its expenditures represent costs that
are eligible for federal financial participation for that fiscal
year. The department shall deny the claim if it determines that the
certification is not adequately supported for purposes of federal
financial participation.
   (2) (A) (i) A city that is not a participating local governmental
agency, or any other local public entity, that contracts with a local
governmental agency pursuant to subdivision (d) and that is located
within a county that is a participating local governmental agency
pursuant to this section, may submit certification to the local
governmental agency of amounts expended for Administrative Claiming
services in accordance with Section 433.51 of Title 42 of the Code of
Federal Regulations.
   (ii) A city or other local public entity that submits
certification pursuant to this paragraph shall comply with the
requirements of paragraph (1), with other requirements applicable to
local governmental agencies that the department determines, by
regulation, to be applicable, and with all applicable federal
requirements.
   (iii) The local governmental agency shall forward the city's or
local public entity's certification to the department for the
purposes of claiming federal financial participation.
   (iv) As applicable, the local governmental agency shall obtain and
retain appropriate certifications from the expending city or local
public entity, together with documentation of the underlying
expenditures, as required by the department.
   (B) A tribe or tribal organization, as defined in subdivision (n),
that is not participating in Administrative Claiming process
activities as a local governmental agency, may contract with, and
submit to a tribe or tribal organization that is contracting with,
the department pursuant to subdivision (b) amounts expended for
Administrative Claiming process activities that it is certifying in
accordance with Section 433.51 of Title 42 of the Code of Federal
Regulations and other applicable federal law and regulations. The
tribe or tribal organization receiving the certification shall
forward it to the department for purposes of claiming federal
financial participation. The certification shall comply with all of
the requirements for certification set forth in subparagraph (A).
   (g) (1) Notwithstanding any other provision of this section, in
accordance with paragraphs (2) and (3), the state shall be held
harmless from any federal audit disallowance and interest resulting
from payments made to a participating local governmental agency or
local educational consortium pursuant to this section, for the
disallowed claim.
   (2) To the extent that a federal audit disallowance and interest
results from a claim or claims for which any participating local
governmental agency or local educational consortium has received
reimbursement for Administrative Claiming process activities, the
department shall recoup from the local governmental agency or local
educational consortium that submitted the disallowed claim, through
offsets or by a direct billing, amounts equal to the amount of the
disallowance and interest, in that fiscal year, for the disallowed
claim. All subsequent claims submitted to the department applicable
to any previously disallowed administrative activity or claim, may be
held in abeyance, with no payment made, until the federal
disallowance issue is resolved.
   (3) Notwithstanding paragraph (2), to the extent that a federal
audit disallowance and interest results from a claim or claims for
which the participating local governmental agency or local
educational consortium has received reimbursement for Administrative
Claiming process activities performed by an entity under contract
with, and on behalf of, the participating local governmental agency
or local educational consortium, the department shall be held
harmless by that particular participating local governmental agency
or local educational consortium for 100 percent of the amount of the
federal audit disallowance and interest, for the disallowed claim.
   (h) The use of local funds required by this section shall not
create, lead to, or expand the health care funding obligations or
service obligations for current or future years for any participating
local governmental agency or local educational consortium, except as
required by this section or as may be required by federal law.
   (i) The department shall deny any claim from a participating local
governmental agency or local educational consortium if the
department determines that the claim is not adequately supported in
accordance with criteria established pursuant to this subdivision and
implementing regulations before it forwards the claim for
reimbursement to the federal Medicaid Program. In consultation with
local governmental agencies and local educational consortia, the
department shall adopt regulations that prescribe the requirements
for the submission and payment of claims for administrative
activities performed by each participating local governmental agency
and local educational consortium.
   (j) Administrative activities shall be those determined by the
department to be necessary for the proper and efficient
administration of the state's Medicaid plan and shall be defined in
regulation.
   (k) If the department denies any claim submitted under this
section, the affected participating local governmental agency or
local educational consortium may, within 30 days after receipt of
written notice of the denial, request that the department reconsider
its action. The participating local governmental agency or local
educational consortium may request a meeting with the director or his
or her designee within 30 days to present its concerns to the
department after the request is filed. If the director or his or her
designee cannot meet, the department shall respond in writing
indicating the specific reasons for which the claim is out of
compliance to the participating local governmental agency or local
educational consortium in response to its appeal. Thereafter, the
decision of the director shall be final.
   (l) To the extent consistent with federal law and regulation,
participating local governmental agencies or local educational
consortium may claim the actual costs of nonemergency, nonmedical
transportation of Medi-Cal eligibles to Medi-Cal covered services,
under guidelines established by the department, to the extent that
these costs are actually borne by the participating local
governmental agency or local educational consortium. A local
educational consortium may only claim for nonemergency, nonmedical
transportation of Medi-Cal eligibles for Medi-Cal covered services,
through the Medi-Cal administrative activities program. Medi-Cal
medical transportation services shall be claimed under the local
educational agency Medi-Cal billing option, pursuant to Section
14132.06.
   (m) As a condition of participation in the Administrative Claiming
process and in recognition of revenue generated to each
participating local governmental agency and each local educational
consortium in the Administrative Claiming process, each participating
local governmental agency and each local educational consortium
shall pay an annual participation fee through a mechanism agreed to
by the state and local governmental agencies and local educational
consortia, or, if no agreement is reached by August 1 of each year,
directly to the state. The participation fee shall be used to cover
the cost of administering the Administrative Claiming process,
including, but not limited to, claims processing, technical
assistance, and monitoring. The department shall determine and report
staffing requirements upon which projected costs will be based. The
amount of the participation fee shall be based upon the anticipated
salaries, benefits, and operating expenses, to administer the
Administrative Claiming process and other costs related to that
process.
   (n) (1) For the purposes of this section, "participating local
governmental agency" means a county, chartered city, Native American
Indian tribe, tribal organization, or subgroup of a Native American
Indian tribe or tribal organization, under contract with the
department pursuant to subdivision (b).
   (2) Each participating Native American Indian tribe, tribal
organization, or subgroup of a Native American Indian tribe or tribal
organization may claim, as a Medi-Cal Administrative Activity,
facilitating Medi-Cal applications, which includes, but is not
limited to, using the California Healthcare Eligibility, Enrollment,
and Retention System.
   (o) For purposes of this section, "local educational agency" means
a local educational agency, as defined in subdivision (h) of Section
14132.06, that participates under the Administrative Claiming
process as a subcontractor to the local educational consortium in its
service region.
   (p) (1) For purposes of this section, "local educational
consortium" means a local agency that is one of the service regions
of the California County Superintendent Educational Services
Association.
   (2) Each local educational consortium shall contract with the
department pursuant to paragraph (1) of subdivision (c).
   (q) (1) Each participating local educational consortium shall be
responsible for the local educational agencies in its service region
that participate in the Administrative Claiming process. This
responsibility includes, but is not limited to, the preparation and
submission of all administrative claiming plans, training of local
educational agency staff, overseeing the local educational agency
time survey process, and the submission of detailed quarterly
invoices on behalf of any participating local educational agency.
   (2) Each participating local educational consortium shall ensure
local educational agency compliance with all requirements of the
Administrative Claiming process established for local governmental
agencies.
   (3) Ninety days prior to the initial participation in the
Administrative Claiming process, each local educational consortium
shall notify the department of its intent to participate in the
process, and shall identify each local educational agency that will
be participating as its subcontractor.
   (r) (1) Each local educational agency that elects to participate
in the Administrative Claiming process shall submit claims either
through its local educational consortium or through the local
governmental agency, but not both.
   (2) Each local educational agency participating as a subcontractor
to a local educational consortium shall comply with all requirements
of the Administrative Claiming process established for local
governmental agencies.
   (s) A participating local governmental agency or a local
educational consortium may charge an administrative fee to any entity
claiming Administrative Claiming through that agency. The department
shall annually post on its Internet Web site the administrative fee
percentage charged by each local governmental agency or local
educational consortium.
   (t) The department shall continue to administer the Administrative
Claiming process in conformity with federal requirements.
   (u) The department shall provide technical assistance to all
participating local governmental agencies and local educational
consortia in order to maximize federal financial participation in the
Administrative Claiming process.
   (v) This section shall be applicable to Administrative Claiming
process activities performed, and to moneys paid to participating
local governmental agencies for those activities in the 1994-95
fiscal year and thereafter, and to local educational consortia in the
1998-99 fiscal year and thereafter.
   (w) This section or Section 14132.44 shall not be construed to
prevent any state agency from participating in the Administrative
Claiming process or from contracting with others to engage in these
activities.