Figure 1

Figure 1 is a map of California’s counties showing the service areas for the 11 local educational consortia and the eight local governmental agencies. For the 11 local educational consortia:

• Region 1 includes five counties along the northwest coast, from Sonoma and Lake counties to Del Norte County
• Region 2 includes nine counties in the northeast part of the State, from Glenn County to Modoc County
• Region 3 includes 10 counties around Sacramento and east to the state line, from Colusa County to Alpine County
• Region 4 includes seven Bay Area counties, from Marin County to San Mateo County
• Region 5 includes four Central Coast counties: Santa Cruz, Santa Clara, San Benito, and Monterey
• Region 6 includes five counties in the northern part of San Joaquin Valley, from San Joaquin County to Tuolumne County
• Region 7 includes six counties in the southern part of the San Joaquin Valley, from Merced County to Tulare County
• Region 8 includes four counties above Los Angeles: San Luis Obispo, Kern, Santa Barbara, and Ventura
• Region 9 includes three southern counties: Orange, San Diego, and Imperial
• Region 10 includes four counties along the eastern side of the State: Mono, Inyo, San Bernardino, and Riverside
• Region 11 is Los Angeles County

The eight areas also served by local governmental agencies are the counties of Alameda, Riverside, Sacramento, San Diego, San Francisco, San Luis Obispo, and Tulare, and the city of Pasadena.

Figure 2

Figure 2 is a timeline of Health Care Services' time study methodologies and claims review processes.

Health Care Services used two time study methodologies. The worker log methodology was used for more than a decade until Health Care Services replaced it with the random moment time survey methodology, effective January 1, 2015.

Health Care Services used three claim review processes from August 2012 through August 2015: deferral certification, reasonableness test criteria, and the settlement agreement.

• The deferral certification process was used from August 2012 to January 2013. (The U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) placed the claim review process on hold from January 2013 to October 2013.)
• The reasonableness test criteria process was used from October 2013 to October 2014.
• The settlement agreement became effect in October 2014 and is still in place as of August 2015.

  Relevant dates and events along the timeline are:

• June 2012: As part of a federal financial management review, CMS informed Health Care Services that its claims did not meet applicable requirements. CMS deferred California's claims and required Health Care Services to revise its time study methodology.
• August 2012: As a result of the financial management review, Health Care Services implemented a deferral certification process that required claiming units to submit additional documents to support their claims. According to Health Care Services' website, CMS suspended this process in January 2013 and then directed Health Care Services to develop a reasonableness test to assist it in the review and approval of deferred claims.
• January 2013: The deferral certification process ended because, according to CMS, it was next to impossible for Health Care Services to evaluate the claims because there was no clear guidance regarding how much time school staff spent directly supporting California's Medicaid program. According to the assistant chief of Health Care Services' Safety Net Financing Division, CMS placed claims processing on hold until Health Care Services could develop and implement a new deferred claims resolution process.
• October 2013: Health Care Services implemented the reasonableness test criteria process, which included a set of benchmark percentages and other limits for certain components of the claims to help it determine whether a claim was reasonable. Health Care Services ended the reasonableness test criteria process in October 2014 after the process failed to result in the payment of many deferred claims. Health Care Services approved less than 10 percent of the claims submitted under the process.
• November 2013: CMS issues the final report of its federal financial management review for California.
• October 2014: Health Care Services and CMS agreed to implement a settlement to address all unpaid deferred claims. Health Care Services agreed to pay participating claiming units interim payments based on factors including the amounts of the original claim and final payments based on the results of random moment time surveys.

Figure 3

Figure 3 summarizes the payment provisions of the October 2014 settlement agreement between the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS)and the California Department of Health Care Services.

The X (horizontal) axis is based on the fiscal year for which claiming units submit their claims.

The Y (vertical) axis is based on the amounts of the submitted claims

1. For reimbursement claim amounts up to $25,000:

   For claims pertaining to quarters that ended before June 30, 2012, claiming units will receive a final payment of 100 percent of the claim amount.

   For claims pertaining to quarters during state fiscal years 2012-13 and 2013-14, claiming units will receive an interim payment of 90 percent of the claim amount, and a final payment based on backcasting results. Backcasting is a process that takes time survey percentages from the new time survey methodology and applies them to deferred claims.

2. For reimbursement claim amounts from $25,001 to $50,000:

   For claims pertaining to quarters that ended prior to June 30, 2012:

   • Claiming units still participating in the administrative activities program will receive the claiming unit’s choice of whichever is higher:
   • An interim payment of 75 percent of the claim amount, and a final payment based on backcasting results, or
   • No interim payment and a final payment of 75 percent of the claim amount or $25,000.
   • Claiming units no longer participating in the administrative activities program will receive no interim payment and a final payment of 70 percent of the claim amount.

   For claims pertaining to quarters during state fiscal years 2012-13 and 2013-14, claiming units will receive an interim payment of 75 percent of the claim amount and a final payment based on backcasting results.

3. For reimbursement claim amounts above $50,000:

   For claims pertaining to quarters that ended prior to June 30, 2012:

   • Claiming units still participating in the administrative activities program will receive an interim payment of 40 percent of the claim amount and a final payment based on backcasting results. Turlock Unified School District will receive an interim payment of only 25 percent of its claim amounts.
   • Claiming units no longer participation in the administrative activities program will receive no interim payment and a final payment of 35 percent of the claim amount.

   For claims pertaining to quarters during state fiscal years 2012-13 and 2013-14, claiming units will receive an interim payment of 40 percent of the claim amount and a final payment based on backcasting results.

4. For any claims pertaining to quarters during state fiscal year 2014-15, claiming units will receive an interim payment of 100 percent of the approved interim payment amount for the same quarter for state fiscal year 2013-14, and a final payment based on backcasting results.

Figure 4

Figure 4 depicts the current time survey structure for the School-Based Medi-Cal Administrative Activities program (administrative activities program) and describes a proposed revision to that structure.

The current time survey structure shows three levels: the California Department of Health Care Services (Health Care Services) at the top, administrative units in the middle, and claiming units at the bottom. Health Care Services has a direct relationship with eight administrative units that conduct quarterly time surveys around the State for the administrative activities program. The administrative units, which are local educational consortia or local governmental agencies, have direct relationships with the claiming units. Although the Los Angeles Unified School District (LA Unified), which is claiming unit, also conducts its own quarterly time survey, it has a direct relationship with its local educational consortium; it does not have a direct relationship with Health Care Services.

The quarterly time surveys are currently performed by the following nine administrative units:

1. Local educational consortia regions 1, 2, and 7
2. Local educational consortia regions 3, 4, 5, and 6
3. Local educational consortium Region 8
4. Local educational consortium Region 9
5. Local educational consortium Region 10
6. Local educational consortium Region 11
7. Local governmental agency consortium - which includes all local governmental agencies except San Diego County
8. San Diego County local governmental agency
9. LA Unified

Vendors assist the administrative units in performing the quarterly time surveys.

• Public Consulting Group provides a random moment time survey system to eight administrative units: the six local educational consortia administrative units and the two local governmental agency administrative units.
• Hansine Fisher provides coding services for the San Diego County local governmental agency.
• Fairbanks LLC provides coding services for the local governmental agency consortium.

The proposed structure for the administrative activities program would result in Health Care Services contracting directly with the claiming units, negating the need for the local educational consortium and local governmental agencies to be involved. A single vendor would supply software and coding for random moment time surveys.