Frequently Asked Questions

There are no federal requirements for Current Procedural Terminology or International Classification of Diseases codes for Medicaid billing. States may have their own requirements, however. We advise communication between SMAs, SEAs, and LEAs within a State to ensure proper SBS coding guidance.

No, generally, States that employ a State plan payment methodology that reimburses a provider for the actual cost of Medicaid services and/or administrative activities may not use a fee schedule rate as a proxy for cost. Instead, states must use cost identification methodologies and supporting documentation methods that are consistent with the requirements of 45 C.F.R. Part 75 and approved by CMS.

When a State relies on a unit of government to fund the non-federal share of Medicaid expenditures through a Certified Public Expenditure (CPE), the reimbursement to the provider is limited to the actual, incurred cost of providing Medicaid services or administrative activities. In those circumstances, a State must use the cost finding and documentation principles that are discussed in 45 C.F.R. Part 75 to determine the amounts that may be reimbursed for Medicaid activities. These costs must be reconciled.

If medical necessity has been determined, Code 4C. Direct Medical Services – Covered on a Medical Plan of Care, Not Covered as IDEA/IEP Service is the correct code. This code should be used when district staff (employees or contracted staff) provide covered direct medical services under the SBS Program where documented on a medical plan other than an IEP/IFSP or where medical necessity has been otherwise established.

States have broad flexibility to determine what services can be delivered via telehealth. Further information can be found in the Telehealth Toolkits (COVID-19 & February 2024 Versions), accessible through this link: State Medicaid and CHIP Telehealth Toolkits landing page.

The system used to identify Medicaid members is unique to each State. The Technical Assistance Center can help with research and work with States to identify best practices to address this issue. We recommend the SMA work with LEAs to develop an integrated system used by both entities.

In order to submit an SPA package, States will formally submit a cover letter that briefly states the intention behind the SPA, a revised Form 179, the revised, applicable State plan pages, and if applicable, a sample cost report with cost report instructions. Please note that CMS does not formally approve the cost report, however the agency’s analysis of it will help to ensure the State is determining cost in a manner consistent with applicable regulation and statutes. Once a State submits an SPA to CMS, the agency has 90 days in which it can approve the SPA, disapprove the SPA, or formally request more information to determine whether the SPA comports with applicable regulations and statutes. If the agency sends a formal request for additional information (RAI), the State then has 90 days to formally respond to the RAI. Once the State responds, CMS has 90 days to either approve or disapprove the SPA.

Yes, examples of approved SPAs for States that expanded services beyond IDEA services (e.g., Arizona, Colorado, Illinois, New Mexico) can be found on CMS' website at the following link: https://www.medicaid.gov/resources-for-states/medicaid-state-technical-assistance/medicaid-and-school-based-services/technical-assistance-materials

It's important to note that each State, District of Columbia, and territory is unique, and it is crucial to ensure that the SPA aligns with the specific needs and laws of the State.

Generally, yes, but how this is achieved is dependent on the reimbursement methodology the State has approved for SBS in its Medicaid State plan. If SBS in a State are paid through fee for service (FFS), then each billed service is claimed and paid as provided in the State plan, regardless of when it occurs.

If a State has a cost methodology in the State plan that uses a time study, the time study must include 100% of providers’ billable time and account for their regular schedules in the methodology and in the time study implementation plan (TSIP). In this case, the providers’ schedules should include after-school hours for programs that are intended to be captured. If these programs are contracted, the contracted costs must also be included in the cost report. If a State does not currently have these programs included in their approved SBS reimbursement methodology, the methodology may have to be amended to capture the additional services. This may include revisions to the SPA, TSIP, PACAP, or other documents, as needed.

In the case of summer activities (i.e., non-regular school days when schools are not capturing any Medicaid services), a time study should be performed to cover these periods. Anytime there are Medicaid services performed and captured in a cost methodology, that time needs to be accounted for in the CMS-approved TSIP, and the allocations explained in the SPA. This is especially true for children with Individualized Education Programs (IEPs) who are eligible for Medicaid and require special education and related services after school hours, on weekends, and/or extended school year services (defined in 34 C.F.R § 300.106). SMAs must have procedures in effect that allow for time studies to capture 100% of providers’ time delivering extended school year services. No estimations of Medicaid services can be calculated for vacation or other periods not covered in the time study.

The formula for State FMAP is established in statute and there is currently no FMAP specific to SBS. The FMAP for direct medical services provided in schools is the same as applicable for Medicaid or CHIP services provided in other service settings. Expenditures for Medicaid administrative activities are generally available at a 50% matching rate, with higher rates for certain activities as specified in the Social Security Act (the Act). Expenditures for CHIP administrative activities, including health services initiatives (HSIs) are available at the Title XXI enhanced or eFMAP and subject to a 10% limit on administrative expenditures.  

A Notice of Funding Opportunity (NOFO) was published in the Federal Register at https://www.govinfo.gov/app/collection/FR/ on January 24, 2024. Applications for grant funding were due March 25, 2024. Please contact the MedicaidSBSPlanningGrants@cms.hhs.gov mailbox for more information.