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Schools reimbursed for student health care

Many districts miss out on this source of federal funding
Schools can bill Medicaid beyond special ed services, for various health assessments and treatments that school nurses or school-based clinics provide daily
Schools can bill Medicaid beyond special ed services, for various health assessments and treatments that school nurses or school-based clinics provide daily

Schools can be reimbursed for providing many general health services—a new benefit thanks to a change in federal law.

The Centers for Medicare & Medicaid Services announced the shift in December 2014, but many districts miss out on this source of federal funding that can lead to improvements in student health, experts say.

Schools traditionally access Medicaid dollars for special education services, says John Hill, executive director of the National Alliance for Medicaid in Education. Such services may include occupational, physical or speech therapy, and other medical services specified in a student’s IEP.

Last December’s policy change paves the way for schools to bill Medicaid beyond special ed services, for various health assessments and treatments that school nurses or school-based clinics provide daily to their general education student population. This may include early diagnostic screenings, such as dental and hearing checks, and mental and behavioral health care.

It will likely take time for schools to begin offering more health services, Hill says. “Schools have never been in a position where they typically bill for medical services,” he adds. “But in many places, especially in big cities or rural areas, schools are the only place where a kid gets a decent meal and access to health care. More schools are recognizing that.”

Varying state policies

Reimbursable services vary by state, Hill says. The biggest variance results from the two types of Medicaid programs in states: fee-for-service and cost-based.

In a fee-for-service state, every district gets the same amount of money for a given service—such as an hour of speech therapy.

In a cost-based state, the reimbursement is determined by what the district paid to provide the service. Therefore, a wealthier district that hired a more expensive speech therapist would receive more funding from the state Medicaid office.

Some districts bill Medicaid on their own, with a form that details student information, the date of service, the procedure and diagnosis codes. But most contract with a third party to file their claims, Hill says. “Administrators still have to recognize their responsibilities—if that entity makes an error in claiming, the school is responsible,” he adds.

Districts can look to New York City Public Schools as a warning: In the past three years, the district lost $356 million in federal Medicaid payments for special education services because city and state officials failed to properly apply for reimbursement, according to the New York Daily News.

Administrators also have to ensure their providers participate in Medicaid programs. And every Medicaid-eligible student must have parental consent for the district to submit a claim, Hill says.

Since districts must document all IEP services provided, it makes sense to use this information to bill Medicaid for extra funding, Hill says.