January
22, 2003
Schools
Decry New
Guidance on Medicaid
A battery of district officials nationwide are alarmed by proposed Medicaid guidelines that they say could mean striking losses in aid for coordinating medical services for needy students, particularly those in special education.
National
education groups and administrators in many larger school districts contend the
provisions—contained in a guide that does not require congressional approval
before becoming final—represent a subterranean attack on Medicaid funding that
could cost districts hundreds of millions of dollars a year.
Officials with the Centers
for Medicare and Medicaid Services, the office within the Department of Health
and Human Services in charge of the federal health-insurance programs, say they
wrote the new guide simply to clarify how schools should seek reimbursement for
the administrative costs related to serving Medicaid-eligible students. If
districts are already following federal requirements, they maintain, the impact
on them will be minor.
But school officials say
the guide, which with one significant and expensive exception would take effect
next school year, would do far more than merely clarify existing law and
regulations. Instead, they say, it would create new policies limiting services
for which schools could be reimbursed, and lower the reimbursement rates for
other services.
"Why are they calling
it a 'guide,' if they can still use it to limit our claims and audit us?"
said Michael Gonzalez, the director of Medicaid finance for the
CMS officials, now
reviewing public comments received in November and December, may yet revise
sections before making the guide final in a few months.
The idea behind the guide,
CMS officials say, was to help, not hurt, districts in collecting federal
dollars. In recent years, as more schools began to participate in Medicaid, the
CMS promised to put out guidelines to help educators translate federal policies
for the program.
The proposed guide is
actually the federal agency's second go at drafting such a document. An initial
version, released in February 2000, drew so much flak that CMS officials shelved
it.
School groups, including
those representing special education professionals, principals, urban districts,
and school boards, have formed a coalition to fight for congressional
intervention if the new version of the guide goes forward.
Medicaid helps cover
schools' medical costs for treating low-income students from the general
enrollment at school-based health clinics. But the program also covers the
broader array of medical services schools must by law provide for students with
disabilities who are Medicaid-eligible.
School districts collected
$648 million from Medicaid in 1999-2000, the last year for which data were
available, according to a study done for the Department of Education by the
Center for Special Education Finance, a
Medicaid claims from
schools amount to a small fraction of the $177 billion Medicaid program, the
main source of federal and state health coverage for the poor.
Critics of the new
guidelines say the changes would cost districts hundreds of millions of dollars
a year, a figure CMS officials say is wildly inflated.
Whatever the guidelines'
exact cost to districts, administrators say schools would be left having to make
up the difference with state or local money at a time when most states face
budget shortfalls and rising Medicaid costs.
And because many of the
costliest school-based Medicaid services are for special education—and
therefore mandated by federal law—districts typically would feel the brunt of
cuts to general budgets, school officials say.
Under the planned new
policies, the CMS would not accept claims from schools for the costs of
identifying special education students eligible for Medicaid, or of developing
plans for their medical care. Schools had hoped they could routinely be
reimbursed for such work, which occurs in the course of drawing up such
students' individualized education plans—federally required educational road
maps that identify students' needs and plan services for them.
Districts say they fear
that lack of such reimbursement may result in decreased student participation in
the Medicaid program.
But federal officials say
that schools identify Medicaid-eligible special education students and create
IEPs because they are required to do so by the Individuals with Disabilities
Education Act. Those upfront costs should not be borne by Medicaid, they argue.
"The development of
the IEP has never been allowed" as reimbursable by Medicaid, one Medicaid
official said. "The guide clarifies that Medicaid will pay for services
once the IEP is developed."
In the past, many schools
had not been successful at collecting money for the cost of drawing up such
plans. But some had success collecting money for costs related to developing the
IEPs they identified separately as medical, not educational. The policies on how
to regard such claims varied among the various CMS regional offices over the
years. But drawing up the IEPs is a service that special education advocates had
fought to have covered by Medicaid.
"If you can't get
reimbursed for finding the kids, testing the kids, and developing a plan for how
to care for the kids, what is that?" said Bruce Hunter, a lobbyist for the
American Association of School Administrators, based in
Even without taking
comments, CMS officials decided to put one change into effect right away. As of
Jan. 1, schools can recover only 50 percent of the costs of administrative work
related to serving Medicaid-eligible students done by skilled professionals such
as psychologists and speech therapists. Previously, schools could receive a 75
percent reimbursement for administrative work by those considered skilled
medical professionals, and 50 percent for such work done by others.
CMS officials say schools
don't need the special, and expensive, skills of such professionals to fill out
evaluation forms or to document services. In the guide's current draft, the
Medicaid agency suggests that schools use their own staff members for such
duties.
With those and other
changes in the "Medicaid School-Based Administrative Claiming Guide"
looming, the 211,000-student Houston district, for example, expects to collect
$1.7 million less than the $4 million a year it typically receives from
Medicaid, Mr. Gonzalez said.
The proposed guidelines
address how schools should file claims for only some of those costs—those
related to administrative expenses of providing Medicaid services for the two
groups of students.
Some advocates said the
guide may be a way for the CMS to make sure schools' participation in Medicaid
remains limited. A lack of time and resources to pursue reimbursement has
deterred some educators from even seeking the aid, school advocates said.
Such challenges may
explain why only 44 percent of districts, a number that includes most large
urban districts, are participating in Medicaid, according to the study
commissioned by the Department of Education and released last year.
"They have made it so
onerous," said Juanita Martinez, an administrator of the
health-services-management program for the 440,000-student
Mr. Hunter, the lobbyist
for the school administrators' group, asserted that the guide was essentially a
mechanism for a federal Medicaid budget cut.
"If they knock
schools out from claiming, they eliminate the need for the federal match,"
Mr. Hunter said. "It's not even that much money. They are into shaving
everywhere they can."
But CMS officials say the
guide has long been in the works and isn't driven by budgetary issues.
Tension between schools
and the Centers for Medicare and Medicaid services may be amplified by timing.
The guide's release comes at a time when state budgets are bleeding red ink, a
problem tied directly to Medicaid costs in many cases. State officials, looking
for relief, are clamoring for Uncle Sam to kick in a higher share of rising
Medicaid costs.
As Congress prepares to
reauthorize the IDEA, the subject of Medicaid is bound to come up, school
advocates say.
"IDEA says Medicaid
should pay, and Medicaid says IDEA should pay," said Ms. Martinez of the