States with Medicaid MCPs may have one of two arrangements to pay for school-based services.
- States may delegate the full scope of services to the MCP, which is then responsible for ensuring that services are available and accessible both in schools and in the community.
- States may exclude some or all SBSs from the services covered by their MCPs, and instead States are paying schools or LEAs directly via a fee-for-service delivery system, while MCPs pay for community-based services.
In all cases, the Medicaid MCP must ensure that covered children receive the medically necessary services to which they are entitled under EPSDT. According to 42 CFR § 438.208, MCPs are responsible for coordination and continuity of care. For children who receive services in school, the MCP should coordinate with schools to ensure that any community-based medically necessary services are provided, while avoiding any duplication of services. MCPs should not be categorically or otherwise inappropriately disqualifying or decreasing community-based medically necessary services solely on the basis that the service is also being provided in a school setting. If the MCP is inappropriately disqualifying or decreasing medically necessary services, the State should remind the MCP of its contractual obligations. If the MCP is denying authorization for medically necessary services or decreasing the authorization of these medically necessary services, that would constitute an adverse benefit determination for which appeal rights are granted under Medicaid.
We also remind states of our expectations related to EPSDT. When a managed care delivery system is used to deliver some or all services required under the EPSDT benefit, states must identify, define, and specify the amount, duration, and scope of each service that the MCP is required to offer in their managed care plan contract. For example, if a MCP is expected to provide the full range of preventive, screening, diagnostic, and treatment services required, it must be clearly stated and described in the contract between the state and the plan. Alternatively, states may exclude some EPSDT services from a managed care delivery system and retain responsibility for them in an FFS delivery system, or contract with another MCP to provide those services. Any benefits not provided by the MCP remain the responsibility of the state Medicaid agency, and if a plan excludes benefits over contractually specified limits, the state retains responsibility for medically necessary services above those limits. Additionally, in accordance with 42 CFR 438.208(b), MCPs are required to implement procedures to deliver care to and coordinate services, including school-based services, with the services the enrollee receives from another managed care plan, in FFS Medicaid and from community and social support providers.
For services provided in schools to Medicaid-covered children on an IEP/IFSP, Medicaid is the “payer of first resort” for Medicaid covered services, as described in 34 C.F.R. Section §300.154 "Methods of ensuring service." Because special education and related services on an IEP must be provided at no cost to the parent, the LEA may not bill Medicaid if doing so would prevent the child from obtaining Medicaid services outside of the school. Therefore, under both IDEA and Medicaid, the SMA must ensure that they and their MCPs work with SEAs and LEAs to ensure that children can access Medicaid services both under the child’s IEP and as medically necessary outside of the school setting.