DHCS Releases Preliminary Guidance on Impact of Free Care-Focused Senate Bill

A recent bill signed into law by Governor Jerry Brown will require the Department of Health Care Services (DHCS) to seek federal financial participation for covered services regardless of whether an Individualized Education Plan (IEP) is in place. Additional language in the bill will require legally liable third party payers to either reimburse school-based health claims or issue a notice of denial of non-coverage.

In response to the passage of this bill, DHCS sent an email to all LEAs participating in the LEA Medi-Cal Billing Option Program stating that they will not be implementing the language in the bill until further notice:

On November 10, 2015, the Department of Health Care Services (DHCS) sent an e-blast to Local Educational Agency (LEA) providers participating in the LEA Medi-Cal Billing Option Program regarding the pending ‘free care’ policy changes. Specifically, the e-blast instructed: “Until further notice from DHCS, all LEAs must continue to use the current policy guidelines and billing practices referenced in the LEA Program Provider Manual.” This statement applies to all changes to program policy, including those that come as a result of State Plan Amendment (SPA) 15-021 and Senate Bill 276 (SB 276).
DHCS is currently in discussions with the Centers for Medicaid and Medicare Services (CMS) regarding implementing provisions of SB 276 related to the other health coverage (OHC)/45-day response requirement. Additionally, SB 276 specified that DHCS must obtain all necessary federal approvals prior to implementation.
As such, until notice from DHCS, LEAs may not implement or act upon any provisions of SB 276. In regard to free care, DHCS is in the process of revising the LEA Provider Manual to reflect the new free care policy and will issue new program policy guidance once completed. Following federal approval of SPA 15-021, we will again revise our Provider Manual to include program changes that are in the SPA. This may include the OHC/45-day response requirement. SPA 15-021 must be approved by CMS prior to the implementation of SB 276 provisions.
As such, California LEAs can expect to wait a bit longer before they will be able to start billing for otherwise eligible health services provided to their non-IEP/non-IFSP Medi-Cal student population.