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9/12/2007 12:00:00 AM

Elimination of Reimbursement Under Medicaid for School Administration Expenditures

Subject: Elimination of Reimbursement Under Medicaid for School Administration Expenditures


 For further information, contact: Judi Gerson, Vice President, Policy & Program Services or Barbara Crosier, Vice President, Government Relations

Center for Medicaid & Medicare Services (CMS) new proposed rules include a provision that the federal Medicaid program NOT reimburse school administration expenditures and costs related to school-age children between home and school.  The federal comments on the changes indicate that administrative activities such as outreach, facilitation of determinations, program planning, policy development, training and coordination of Medicaid services are ONLY reimbursable events when performed by employees of the State or the local Medicaid agency -- not employees or contractors of a school district. Reimbursement for transportation is similarly limited to transportation of school-aged children from school or home to a non-school based direct medical service provider that bills under the Medicaid program or from the non-school based provided to school or home.

These changes have primary impact on school districts, not on private special education providers. The CMS proposed rules (which can be accessed online at ) also make it clear that elimination of reimbursement under Medicaid for School Administration Expenditures would not apply to direct services provided as part of an IEP. However, we still need to determine how these IEP services might be affected by the other concurrent CMS proposals which would eliminate reimbursement for services which are considered “habilitative” as opposed to “rehabilitative”.

As Barbara Crosier mentioned in an earlier memo, we are working with The Consortium for Citizens with Disabilities (CCD) Health Task Force which will be providing a template for comments as well as talking points for our Congressional Representatives and Senators. We will continue to forward more information on the proposed CMS changes as they are available.  

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