In final regulations published in the Federal Register December 28, the federal Centers for Medicare and Medicaid Services (CMS) made it official that schools may not bill Medicaid for certain school-based administrative and transportation activities, "because the Secretary [of Health and Human Services] has found that these activities are not necessary for the proper and efficient operation of the Medicaid state plan."
The regulation, which goes into effect February 26, 2008, is identical to proposed regulations that were issued by CMS in September last year. The new 25-page Federal Register notice includes extensive comments CMS received after publication of the proposed rules, with the largest group of comments coming through a write-in campaign initiated by the Council for Exceptional Children and California the state generating the largest number of comments.
Exact status of the new regulations is unclear, however, since the regs appeared just one day before President Bush signed into law a bill (S. 2499) that imposes a moratorium on any regulatory guidance concerning payment for school-based administration and school-based transportation, "if such restrictions are more restrictive in any aspect than those applied to such areas as of July 1, 2007."
As background for its regulations, CMS noted that Title XIX of the Social Security Act authorizes federal grants to states for Medicaid programs, "operated by each state under an approved Medicaid State plan that provides medical assistance to needy individuals, including low-income families, the elderly, and persons with disabilities." With respect to schools, this means that some "medically necessary direct medical services" provided to children with disabilities, including services specified in their Individualized Education Plans (IEPs) or Individualized Family Services Plans (IFSPs), and also including Early and Periodic Screening, Diagnosis, and Treatment (EPSDT), may be covered by Medicaid, "if they meet all other Federal and State Medicaid regulations."
What are not covered by Medicaid, the CMS points out, are services that states must provide as part of their educational mission, including administrative activities that are primarily associated with education program requirements. "Though these activities may include coordinating the delivery of Medicaid services with educational services, they are primarily associated with educational program requirements. Transportation to and from the school for most students is also part of the schools' educational responsibility."
Many of the comments CMS received involved the financial effects schools anticipate when the new Medicaid regulations go into effect. Commenters argued that they will not be able to fund staff positions, equipment, or instructional materials, or that their states or districts will have to raise taxes to make up the shortfall. In response, CMS notes that "such comments appear to support our view and concern that Title XIX funds are being used as a funding source without specific benefit to the Medicaid program."
Provision of Services
CMS responded at length to charges that the new regulations will adversely impact the provision of needed services to school-age children. "The provision of, and reimbursement for, school-based medical services are not affected by the changes specified in the final rule," CMS said. "Medicaid reimbursement would remain available for covered services provided to children pursuant to an IEP or IFSP, whether they are provided in the school or the community … including transportation from school or home to a non-school-based direct service provider that bills under the Medicaid program."
Support for School-Based Administration
In response to comments that "Families are familiar and comfortable with the people and the school" making schools a logical place to provide opportunities to enroll children in health care, CMS noted that the regulations "in no way preclude state or local Medicaid agencies from engaging in such activities. Nor do we preclude school employees from conducting activities that inform individuals of the availability of Medicaid services. This rule simply sets forth a clear test for the administrative activities that are appropriately claimed as necessary for the proper and efficient administration of the state Medicaid plan, and distinguishes those activities from the administration of a school program."
In response to commenters concerned about the new regulations' effects on transportation of students, CMS pointed out that Medicaid will continue to pay for transportation of a student from home or school to a non-school-based medical provider, but transportation from home to school, even if the child is to receive some medical services at school, is a responsibility of the school system. "This final rule will not interfere in any way with the ability of states to determine school transportation policy, but simply recognizes that transportation from home to school and back and related administrative activities are not authorized under the Medicaid statute as necessary for the proper and efficient administration of the state Medicaid plan. Children are transported to school primarily to receive an education, not to receive medical services."
The full text of the final rule, "Elimination of Reimbursement Under Medicaid for School Administrative Expenditures and Costs Related to Transportation of School-Age Children Between Home and School," the comments received by CMS, and the agency's replies are available online at http://www.federalregister.gov/articles/2007/09/07/07-4356/medicaid-program-elimination-of-reimbursement-under-medicaid-for-school-administration-expenditures