Part B of IDEA provides Federal funds to SEAs, and SEAs subgrant a majority of IDEA funds to LEAs and school districts. IDEA funds assist SEAs and LEAs in providing a free appropriate public education (FAPE) to eligible children (generally ages 3 through 21) with disabilities through the provision of special education and related services. As explained below, Medicaid is a funding source for special education and related services for Medicaid enrolled children.
An Individualized Education Program (IEP) is a written statement for a child with a disability that is developed, reviewed, and revised in accordance with IDEA’s requirements in 34 C.F.R. §§ 300.320 through 300.324. A child’s IEP addresses, among other things, the nature, frequency, duration, and location of a child’s special education, related services, supplementary aids and services, and program modifications and supports for school personnel. Services provided under IDEA Part B are provided at no cost to the child’s parents.
For Medicaid-enrolled children who receive services under IDEA Part B, IDEA specifically requires States to create an interagency agreement or other mechanism that must include provisions stating that the State Medicaid agency financial responsibility precedes the financial responsibility of the LEA (or the State agency responsible for developing the child's IEP). Therefore, Medicaid is payer of first resort (as between Medicaid and LEAs or the State agency responsible for developing the child's IEP for Medicaid-covered services included in the IEP (see section 1903(c) of the Act and IDEA sections 612(e) and 640(c), codified at 20 USC 1412(e) and 1440(c); 34 C.F.R. § 300.154(h); and 42 C.F.R. § 433.139)).