RD429 - Increasing Integration of Children Receiving Special Education Private Day Treatment Services into their Home School Districts and Funding Educational Costs for Students Placed in Psychiatric or Residential Treatment Facilities for Non-Educational Reasons – November 1, 2016

Executive Summary:
The 2016 Appropriation Act required the State Executive Council (SEC) for Children’s Services to provide options to address two issues. First was to identify options to increase the integration of students with disabilities who are receiving educational services in private day educational programs into their home school districts. The SEC was also asked to address mechanisms for collecting and utilizing data to better inform the delivery of these private day educational services. This issue had not previously been addressed by the State Executive Council. Secondly, options were requested regarding funding of educational costs for students whose placement in or admittance to state or privately operated psychiatric or residential treatment facilities for non-educational reasons has been authorized by Medicaid. This issue was previously addressed and recommendations made and identified as RD241, submitted in September 2015. As the two sets of issues are distinct, the current report addresses them as such.

Private Day Educational Placements

With regard to private day educational placements, a representative group of stakeholders(*1) including the Virginia Association of School Superintendents (VASS), Virginia School Board Association (VSBA), the Virginia Association of Counties (VACo), the Virginia Municipal League (VML), the Virginia Council of Administrators of Special Education (VCASE), the Virginia Association of Independent Specialized Education Facilities (VAISEF), the Virginia Board for People With Disabilities (VBPD), and parents of students with disabilities met on three occasions. The group received presentations from the Virginia Department of Education (VDOE), the Office of Children’s Services (OCS) and VAISEF regarding the utilization and outcomes of private day educational placements and offered an array of options to the SEC. The SEC reviewed and modified these options which fall into four broad areas:

1. Restructuring the Children’s Services Act and Virginia Department of Education funding of special education services, specifically private educational services.

2. Defining and measuring outcomes for students in private special education settings.

3. Increasing attention to the successful transition/reintegration of students with disabilities from private settings to public school settings.

4. Supporting and enhancing the ability of public schools to serve students with disabilities in the least restrictive environment.

Specific options in each of these four areas are presented, along with a number of other considerations identified by the stakeholder group and the SEC.

Funding Educational Costs for Children Parentally Placed in Pyschiatric Treatment Facilities (PRTFs)

The circumstances leading to this situation have evolved over the past 15 years as the state Medicaid plan allowed for children with significant behavioral health difficulties to be placed in Level “C” psychiatric residential treatment facilities through authorization and reimbursement by Medicaid without involvement of local Children’s Services Act (CSA) structures and processes. The provision of educational services for children placed in these facilities is required by licensing regulations; however, Medicaid does not allow payment for educational services. A “disconnect” therefore exists between the required educational services and the availability of public funds to support such services. In FY2015-2016 an average of 575 children were placed in residential treatment through Medicaid outside of the CSA process and without any state or local funding for educational services.

This problem is complex and potential solutions have significant fiscal and administrative impacts on the state, but especially the local government level. Several task forces and work groups have attempted to address the issue over the past year. These efforts, in combination with extensive public comment resulted a report which was submitted to the General Assembly in 2015 (RD241). Recently the Department of Medical Assistance Services (DMAS) has indicated its intention to utilize its emergency regulatory authority to make significant changes to the process by which Medicaid-eligible children are reviewed for admission into a psychiatric residential treatment facility. While these planned changes do not have a certain and direct impact on the issue under consideration in this report, it is highly likely that these new regulations will result in changes to the landscape with regard to this issue and these changes should be carefully monitored.

In response to the current requirement, a stakeholder group was reconvened to consider and address funding the educational costs for children placed for non-educational reasons in psychiatric residential treatment facilities as authorized by Medicaid(*2).

The SEC reviewed the available alternatives and provides options which fall into three areas of responsibility:

1. Activities by Magellan and DMAS Managed Care Organizations (MCO)

2. Activities by local Children’s Services Act (CSA) Family Assessment and Planning (FAPT) and Community Policy and Management (CPMT) Teams)

3. Activities by local school divisions and/or the Virginia Department of Education

Specific options in each of these areas are presented, along with a number of other considerations identified by the stakeholder group and the SEC.
(*1) The full listing of participants in this stakeholder group is found in Appendix A.
(*2) The full listing of participants in this stakeholder group is found in Appendix B.