Frequently Asked Questions

In states where SBS are included in a Medicaid managed care delivery system, LEAs must contract with MCPs to receive reimbursement for SBS provided to enrollees. Regardless of whether SBS services are included in managed care, MCPs play a key role in coordination of care for all states that utilize a Medicaid managed care delivery system. Under 42 CFR 438.208(b), MCPs are required to coordinate care and services for enrollees across settings, which includes services that are provided in schools.

Working with MCPs can reduce the time LEAs need to spend on administrative issues, such as denied claims, which can improve revenue flow and allow more time for LEA staff to spend on providing health care to students.

For more information, we welcome you to review the slides and recording of the Intersection of Medicaid Managed Care and SBS webinar, available on the Medicaid and School-Based Services Events page.

CMS requires states to provide mandatory training to all time study participants, not only those who are assigned a random moment. Training may occur before or after staff are selected for inclusion in the time study participant list, but must occur before sampling. 

More information on training for participation in the time study, including what training should involve, when training should be conducted, and what documents should be retained related to training can be found within the Considerations for Developing a Time Study Implementation Plan (TSIP) resource document, available on the CMS School-Based Services Resources page.

Examples of vehicle adaptations can include, but are not limited to, special harnesses, wheelchair lifts, ramps, specialized environmental controls, specialized suspension systems, and other modifications to a vehicle as required in a student’s IEP.

For more information about specialized transportation, we encourage you to review the Reimbursement for Specialized Transportation within Medicaid SBS Resource, which is available under the TAC Resources heading on the CMS SBS Resources page.

Medicaid will pay for services and treatments that fit within any of the 1905(a) benefit categories of the Social Security Act (The Act). Medicaid-enrolled children can receive a broad range of the Early and Periodic Screening Diagnosis and Treatment (EPSDT) services as defined in 1905(r) of the Act, even if the services are not otherwise available under the State Medicaid Plan. For Medicaid-enrolled students with an IEP/IFSP, Medicaid is the payer of first resort for Medicaid-covered services included in the IEP/IFSP (see section 1903(c) of the Act and IDEA sections 1412(e) and 1440(c), codified at 20 USC 1412(e) and 1440(c); 34 CFR 300.154(h); and 42 CFR 433.139). While all EPSDT services can be provided in schools, not all school services will fall under the EPSDT benefit. The Medicaid EPSDT benefit and qualifying covered state plan services would also not be available to individuals over the age of 21, unless the state has opted to cover the services in one of the 1905(a) benefits of Medicaid.

Page 44 of the Comprehensive Guide describes that State Plan Amendments (SPAs) for SBS generally include “a comprehensive section describing the types of providers and school staff involved in providing SBS.” For more information about the requirements for a SPA, states are encouraged to use the Readiness Checklist Tool, available on the CMS School-Based Services Resources page under TAC Resources.

Generally, State Medicaid agencies are required to use the cost avoidance method when probable TPL exists. For services that are not included in a student’s IEP or IFSP under IDEA, schools and school-based providers must meet federal and state Medicaid requirements by billing the third-party health insurance before billing Medicaid to determine the extent of the insurer’s liability. However, when the claim is for medical child support services or preventive pediatric services covered in the Medicaid State Plan, SMAs use the “pay and chase” method instead.

As stated on page 106 of the Comprehensive Guide, 

• “Using the ‘pay and chase’ method, the State Medicaid agency pays the claims submitted by providers and then seeks reimbursement from the liable third parties. Reimbursement must be sought unless it is determined that recovery of reimbursement would not be cost-effective in accordance with threshold amounts that have been established by the State Medicaid agency.”

If the SMA determines that recovery of third-party reimbursement will not be cost-effective, it can choose to terminate recovery efforts. More information about the termination of recovery efforts can be found at 42 CFR 433.139(f). This regulation specifies that the Medicaid State Plan must include the threshold amount.

• “The State plan must specify the threshold amount or other guideline that the agency uses in determining whether to seek recovery of reimbursement from a liable third party or describe the process by which the agency determines that seeking recovery of reimbursement would not be cost-effective.”

To exempt services from third party billing requirements, CMS requires the state to have clear and convincing documentation of non-coverage by insurers. There are multiple ways the state may obtain this documentation:

• The state may bill third parties and receive claims rejection notices. However, the state must assure that national billing codes for the items or services are included on claims, or, if local billing codes are used, that national codes and local codes are matched, so that rejection notices accurately reflect non-coverage of the item or service.
• The state may conduct a survey of insurers' benefit packages. The state can demonstrate non-coverage if it confirms with the top ten insurance carriers that their scope of benefits did not cover an item or service. However, since many insurers change their benefit packages on an annual basis, the state would have to confirm continued non-coverage on a yearly basis.
• For insurers not included in a survey, or as an alternative to a survey, the state may establish a precedent file by initially billing the insurer to obtain documentation of non-coverage, so that future claims would not need to be submitted to that insurer. The state would have to confirm continued non-coverage on a yearly basis.
• The state may request verification from the state agency or commission that oversees compliance with state law and regulations governing insurance plans that a certain item or service is never covered in insurance policies available in the state, either for the general population or for a specific population segment (for example, children under age 21).  The state would have to confirm continued prohibition of coverage on a yearly basis.

For more information, please review the Coordination of Benefits and Third Party Liability (COB/TPL) in Medicaid Handbook.

Yes, all the provider types listed may be eligible Medicaid providers if allowed by state statute. As stated on page 29 of the Comprehensive Guide, “States generally have broad flexibility to identify the providers of a covered Medicaid service, including their qualifications. When identifying provider qualifications for Medicaid-covered services, States may refer to State, local, or other generally applicable licensure or certification requirements, including certification by the federal, state, or local ED or national accrediting bodies.”

42 CFR Part 440 Subpart A, specifically 441.10, details requirements and limits applicable to specific services. For general services provisions, definitions and requirements, please refer to 42 CFR Part 440 and 441.

If SBS are excluded from a state’s managed care delivery system and covered under an FFS delivery system, the claims must be submitted directly to the state’s Medicaid FFS program. As page 45 of the Comprehensive Guide describes, under an FFS delivery system, "providers submit claims for the services that they provide to the State Medicaid agency through billing systems and receive payments at the applicable fee schedule rate for a service."

LEAs and school-based providers must only contract with MCPs to become network providers if the state includes SBS in a managed care delivery system. However, regardless of whether SBS are included in managed care, there are several regulations on the coordination of care, and states and MCPs should coordinate with LEAs as necessary. For example, 42 CFR 438.208(b)(2) requires that MCPs coordinate services covered by the MCP with services that their enrollees receive through FFS or other MCPs; the services provided through FFS or another MCP could include services delivered in schools.

For direct services that may be covered and paid for by Medicaid and CHIP, the provider furnishing such services must be enrolled in the State Medicaid or CHIP program, as applicable (see page 26 of the Comprehensive Guide). Providers who are not eligible for or enrolled in Medicaid should generally not be included in the Direct Services cost pool. 

However, a non-Medicaid provider can conduct and claim Medicaid administrative activities. These providers may be included in the Administrative Activities cost pool, with only the time spent performing Medicaid-allowable administrative activities counted towards the allocable costs. In a time study, the providers should code any Medicaid administrative activities completed during their assigned moment so that they are included in the allocation ratio. A description of calculating cost pools is available on pages 87 and 88 of the Comprehensive Guide.

Yes, a state can exempt a service from TPL requirements if it is never covered in the school setting, even if it is otherwise covered by the liable third party. Claims for the service in question delivered in a school setting must always be denied by the third party, and the state needs to maintain annual documentation substantiating that the service is not covered.