RD688 - Medicaid Reimbursement of School Health Services Outside of a Student’s Individualized Education Plan – December 15, 2020

Executive Summary:

In drafting this report DMAS worked with the Centers for Medicare and Medicaid Services (CMS), the Department of Education (DOE) and consulted with other state Medicaid programs to review their approaches for Medicaid school service coverage and for maximizing the total of federal financial participation (FFP) being distributed to local school districts. Federal law requires schools to provide a range of healthcare and related services deemed necessary to support a student’s participation in public education. Local school districts pay the majority of the costs related to these services. As part of their collaboration on this report, DOE provided a list of the most common services that local schools are providing pursuant to federal, state and local requirements outside of the Individualized Education Plan (IEP) process. Expanding Medicaid coverage of these non-IEP services would allow school divisions to receive additional federal resources to support the needs of schoolchildren. There are two distinct reimbursement models for schools providing these services – cost-based reimbursement (currently in use for school services), and payment of schools as fee-for-service providers. While cost-based reimbursement requires additional, federally required documentation and record keeping on the part of school staff, it nets local school districts approximately twice the amount of Medicaid dollars than the fee-for-service model would provide.