Getting parental consent for school-based Medicaid billing puts significant burden on school staff and spurs concerns from parents about adverse impacts to their children’s insurance, according to a December survey of district leaders and Medicaid coordinators.
These barriers contribute to incomplete parental Medicaid consent forms and the potential loss of reimbursements districts could receive for providing health-related services, said a report on the survey results by the National Alliance for Medicaid in Education, or NAME; the Association of Educational Service Agencies; and AASA, The School Superintendents Association.
To reduce barriers for district access to Medicaid funding, the Biden administration announced Wednesday that it will issue a proposed rule this spring modifying the current rule for obtaining parental consent. The proposed rule would streamline districts' access to funding, reduce paperwork and improve consistency with the Individuals with Disabilities Education Act, according to the notice.
The organizations' report calls the requirement to obtain parental consent for Medicaid billing an "unnecessary, time consuming and emotionally fraught process for districts and parents."
Not only that, but rising political strife, distrust by parents and the expansion of non-special education-related Medicaid reimbursements make it more difficult for school systems to obtain parental consent compared to five years ago, the report said.
About a third of survey respondents said 26% to 50% of their Medicaid parental consent forms are not complete. Medicaid reimbursements are the third or fourth largest federal revenue stream for school systems, according to a presentation from the Medicaid in Schools Coalition last year.
Lost revenue
Under the current system, obtaining parental consent for Medicaid-eligible children is a requirement for school-based Medicaid reimbursements, according to IDEA regulations. This requirement, however, is not included in the IDEA statute, said the Biden administration notice — known as the Unified Agenda, which includes the administration's federal priorities for much of 2023.
The Education Department said that under the forthcoming proposed rule, it would continue to prohibit districts from using a child's benefits for reimbursement if that would lead to adverse impacts to that child's insurance coverage. Adverse impacts include the discontinuation or reduction of benefits.
Once an initial parental consent is received, however, it automatically rolls over to future school years unless a parent revokes their consent, said Jenny Millward, executive director of NAME.
Medicaid and non-Medicaid-eligible students with disabilities still receive specialized services, such as medical support and speech therapy, listed in their individual education programs regardless of the school's costs for the services or access to reimbursement.
AASA estimates Medicaid reimbursements to schools to be about $3 billion to $4 billion. By comparison, the federal FY 2023 U.S. Department of Education budget for K-12 is $45 billion.
Millward said it's difficult to estimate how much Medicaid reimbursement funding is lost nationally due to incomplete parental consent forms.
The report gave an anecdotal example of a district spending $100,000 to provide services for a student with significant healthcare needs, requiring a personal care assistant, multiple services from specialized instructional support personnel, and specialized transportation. If that student’s district has an operating budget of $10 million, then that student's services equal 1% of the district's budget.
Katherine Yager, director of Medicaid at Chicago Public Schools, said the district receives about $35 to $38 million annually in Medicaid reimbursements for Medicaid-eligible special education services, which include nurse services, occupational and speech therapies, and psychological and mental health services.
Over the years, the district has streamlined the process of obtaining parental consent into the special education administrative process. Still, not having parental consents complete or on file to bill Medicaid represents a 3% to 5% revenue loss, or about $1 million annually, Yager said.
"This is money that's previously allocated that the district pays upfront, but this is revenue we rely on, so that's a million dollars we're not receiving that we could be," Yager said.
'They are listening'
Incomplete parental consent forms for Medicaid billing are a "huge concern," Millward said. A district's ability to bill Medicaid for school-based services takes some financial burden off taxpayers, she said.
"It is wonderful to be able to reclaim at least a portion of that amount for your district because students have very complicated needs," Millward added.
Additionally, many districts lack the manpower and expertise to submit Medicaid reimbursements, Millward said. "School districts just aren't equipped like [medical] clinics with that type of office support that specializes in it. It makes it difficult for school districts to support that process."
For years, advocates and educators have complained that the entire Medicaid reimbursement process and rules are cumbersome, outdated and confusing. Guidance for school-based Medicaid has not been significantly updated since two manuals were issued in 1997 and 2003.
All districts currently are able to seek reimbursement for healthcare services provided to Medicaid-eligible special education students. However, only 16 states allow districts to seek reimbursements for school-based health services for all Medicaid-eligible students.
This could be because states may have to detail these activities and the payment approach specific to school-based services in their Medicaid program, wrote Daniel Tsai, deputy administrator and director of the Center for Medicaid and CHIP Services in the U.S. Department of Health and Human Services, in a September informational bulletin from Tsai.
HHS is currently attempting to improve the school-based Medicaid process. The memo from Tsai included a checklist of strategies and guidance for state Medicaid offices working with school districts as a way to explain and clarify existing rules.
For instance, the document clarifies that certain health services provided to all students at a school could be reimbursable if an individual nurse or school is registered as a Medicaid provider. Each state would need to specify reimbursable services in their state Medicaid plans.
According to Millward, every state's Medicaid plan varies for allowable services and reimbursement rates. "Every state is different and unique," she said.
Additionally, HHS' Centers for Medicare & Medicaid Services, in collaboration with the Education Department, is planning to establish a technical assistance center to promote best practices regarding Medicaid-covered school-based services.
Millward said the federal government's attention to updating guidance, as well as the sharing of best practices, are encouraging signs. "It's obvious to me they're very interested in making sure they get it right. They are listening. They are engaging with stakeholders, and I've seen that firsthand," she said.
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