Report Title:

Federal revenue maximization

Description:

Requires the DOE to establish and implement a federal revenue maximization program for all medicaid-eligible claims for school health services with the assistance of DHS. (HB695 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

695

TWENTY-THIRD LEGISLATURE, 2005

H.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO FEDERAL REVENUE MAXIMIZATION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The department of education (DOE) provides important health services to Hawaii's school-age children, including:

(1) Speech/language therapy;

(2) Occupational/physical therapy;

(3) Health-related transportation;

(4) Mental health and other behavioral services;

(5) Counseling;

(6) Diagnostic and assessment services; and

(7) Nursing and health aide services.

The federal government provides funding for these services through the medicaid program authorized by Title XIX of the Social Security Act and strongly encourages states to seek appropriate medicaid reimbursement. The federal Centers for Medicare and Medicaid Services (CMMS) has provided states with a blueprint that specifically outlines the procedure for claiming federal medicaid reimbursements in their publication, "Medicaid and School Health: A Technical Assistance Guide."

Currently, DOE does not submit any claims for federal reimbursement for medicaid-eligible services, many of which are covered by the Felix v. Cayetano consent decree. As a result, the taxpayers of Hawaii bear a heavy and unnecessary financial burden that strains the State's ability to fund a quality public school system.

To help relieve this burden, the University of Massachusetts (UMass) submitted to DOE a September 2002 proposal for the development and maintenance of a federal revenue maximization program, which included projections for federal revenue maximization for both DOE's administrative costs and medicaid-eligible school health services. UMass proposed a contingency-fee contract, with no up-front cost to the State.

UMass conservatively projected retroactive federal reimbursements totaling $21,000,000 from the eight preceding quarters, and a total federal reimbursement of $10,500,000 for every succeeding federal fiscal year.

UMass projected that each year, as much as $5,400,000 in federal dollars for administrative costs goes unclaimed by DOE.

UMass also projected that $6,370,230 in federal dollars is available to DOE for its medicaid-eligible school health services, assuming that all backup documentation is available to support claims. Assuming only eighty per cent of documentation is available to support claims, $5,089,915 in federal dollars would be available. After discussions with DOE, UMass found that DOE has difficulty obtaining the necessary backup documentation.

Federal reimbursement claims may be filed quarterly. However, CMMS allows retroactive claims only as far back as two years. Therefore, the longer DOE delays in implementing a federal revenue maximization program, the more money the State will lose each fiscal quarter in federal medicaid funds for administrative costs and school health services.

The purpose of this Act is to require DOE to establish and implement a federal revenue maximization program for all medicaid-eligible health services that it provides to Hawaii's school-aged children.

SECTION 2. (a) The department of education, in collaboration with the department of human services and the department of health, shall establish a federal revenue maximization program to:

(1) Identify medicaid-eligible health services being provided through the department of education to students, directly or through its contracted providers; and

(2) Submit claims for federal reimbursement for such services through the department of human services, the State's medicaid agency.

In establishing the federal revenue maximization program, the superintendent of education and the director of human services shall execute a memorandum of agreement to develop and implement a federal revenue maximization program for medicaid-eligible school health federal reimbursement.

The department of education shall contract with a third party to administer this program. The third-party contract shall be established either at no cost to the State or on a contingency-fee basis and with no up-front costs to the State, including but not limited to costs to train staff, adapt data collection systems, and comply with the Federal Health Insurance Portability and Accountability Act.

(b) The federal revenue maximization program shall identify, at a minimum:

(1) The service recipient and medicaid number;

(2) The service provider (either the department of education in total or by contracted provider);

(3) The services received, including when, where, and for what diagnosis; and

(4) Billing charges for the services provided.

(c) The department of health, in collaboration with the department of human services and the department of education, shall identify sources of funding including medicaid-eligible health services, including reimbursable health services, for the establishment and provision of school-based or school-linked health services at schools in federally designated underserved areas.

(d) The department of education shall implement this Act according to the following schedule:

(1) By no later than October 31, 2005, the department of education shall procure and contract for the development, implementation, and maintenance of the federal revenue maximization program, including any required information technology system or interfaces with the department of education's existing system;

(2) Beginning January 1, 2006, the department of education shall claim the maximum reimbursement allowable under medicaid for both administrative costs and school health services arising on and after January 1, 2006; and

(3) As soon as possible after October 31, 2005, but no later than January 1, 2006, the department of education shall file retroactive claims for the preceding eight quarters, as permitted by available documentation or other back-up information that can be reasonably obtained.

(e) The department of human services and the department of health shall provide technical assistance and support to the department of education in its efforts to obtain federal medicaid school-health reimbursements under this Act.

SECTION 3. The department of education shall submit to the legislature quarterly reports that include:

(1) The amount of medicaid federal reimbursement received for federal fiscal years 2004-2005 to 2009-2010;

(2) The amount of additional funding that has been secured;

(3) The amount of claims pending;

(4) The amount of additional federal funding that is projected to be secured over the next five years; and

(5) Plans for the reinvestment of additional federal funds to expand needed services to the state's children.

The department of education shall also submit an annual report to the legislature no later than twenty days prior to the convening of each of the regular sessions of 2006 to 2010.

SECTION 4. This Act shall take effect on July 1, 2020.