Frequently Asked Questions

Yes, provided the following conditions are met. As noted on page 99 of the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming under section G. Special Considerations for Transportation and Vaccines as SBS:

“School-based specialized transportation is defined as transportation to a medically necessary service (as outlined in the IEP of an enrolled Medicaid beneficiary) provided in a specially adapted vehicle that has been physically adjusted or designed to meet the needs of the individual student under IDEA (e.g., special harnesses, wheelchair lifts, ramps, specialized environmental controls, etc.) to accommodate students with disabilities in the school-based setting. Note: the presence of only an aide (on a non-adapted bus/vehicle) or simple seat belts do not make a vehicle specially adapted. Specialized transportation may consist of a specially modified, physically adapted school bus or other vehicle in the specialized transportation cost pool.” 

Under the Individuals with Disabilities Education Act (IDEA), if a child with a disability is receiving special education and related services, transportation is included in the child’s IEP, and the IEP Team determines that the parent will be providing transportation, the LEA must reimburse the parents in a timely manner for the costs incurred in providing transportation. See the Office of Special Education Programs’ Questions and Answers on Serving Children with Disabilities Eligible for Transportation, November 2009. The LEA may request Medicaid reimbursement if the parent personal vehicle has been specially adapted consistent with the SBS guidance.

Yes, under both IDEA and FERPA, a public agency may accept digital or electronic signatures when obtaining parental consent to disclose PII from the child’s educational records. Such electronic consent must: 1) identify and authenticate a particular person as the source of the electronic consent; and 2) indicate such person’s approval of the information contained in the electronic consent.

As discussed in Section IV. C of the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming, State Medicaid/CHIP agencies may share applicant and beneficiary information with schools enrolled as Medicaid or CHIP providers, or other Medicaid or CHIP providers, when the use or disclosure of the information is for purposes directly connected with the administration of the Medicaid or CHIP State plan, including establishing eligibility, providing services, or billing for services. Yes; An LEA or a school enrolled as a Medicaid or CHIP provider may receive beneficiary information on the condition that the school adheres to confidentiality standards comparable to those of the SMA or the State CHIP agency. The SMA and the State CHIP agency (in accordance with 42 C.F.R. § 457.1110(b)), as well as recipients of applicant and beneficiary information, must safeguard this information in accordance with the requirements of 42 C.F.R. part 431, subpart F confidentiality when they receive, use, or disclose applicant or beneficiary information. 

One of these requirements is that the SMA or State CHIP agency must obtain permission from the individual, or their family, before responding to a request for information from an outside source, as set forth in 42 C.F.R. § 431.306(d). The Medicaid consent for billing purposes is separate from the FERPA and IDEA consent provisions. 

IDEA child find requires States to ensure that all children with disabilities residing in the State who need special education and related services are identified, located, and evaluated, regardless of the severity of the disability, and includes identification of children who are suspected of having a disability. States are responsible for implementing child find activities for all children with disabilities residing in the State, including those children who are experiencing homelessness or are wards of the State, highly mobile and migrant children, English learners, and parentally placed private school children with disabilities, as well as those suspected of having developmental delays as defined in 34 C.F.R. § 300.8(b). 

Child find activities are defined in 34 C.F.R. § 300.111 and typically involve a screening process to determine whether the child should be referred for an evaluation to determine eligibility for special education and related services. States must identify, locate, and evaluate all children with disabilities residing in the State and who may need special education and related services.
 

Yes, some child find activities could be covered in Medicaid. Child find activities may involve a formal screening process to determine whether the child should be referred for an evaluation to determine whether a child has a disability and the nature and extent of the special education and related services that the child needs. In a scenario where a child is enrolled in Medicaid, a screening or initial evaluation could be coverable under a 1905(a) benefit category. As specified in section 1905(r)(5) of the Act, EPSDT entitles most eligible Medicaid-enrolled children and adolescents to services and treatments that fit within any of the benefit categories of Medicaid-coverable services listed in section 1905(a) of the Act if medically necessary, as determined by the State, to “correct or ameliorate” identified conditions. For a child who is not yet enrolled in Medicaid, the child find activities such as screenings and evaluations would not be covered.

More on Child Find is available at the Department of Education’s website. 
 

Examples of child find activities can include: 
For preschool- and school-aged children: Public awareness campaigns by the LEA or in partnership with a school’s parent teacher association that include information provided in languages spoken in the community and that target a wide audience, including parents and families, daycare and early childhood education providers, summer camps, medical providers, homeless shelters, religious institutions, and kindergarten roundup (i.e., events hosted by elementary schools to facilitate a child’s transition from home to formal education).

For older children: 

• Locally administered assessments that measure student academic growth.
• Screening private school students and home school students.
• Meeting with mental health practitioners.
• Sharing information with nonprofit organizations that focus on families and children.
• Coordinating with State agencies that provide services to children and young adults.

Other activities can include the LEA’s outreach efforts and interagency collaboration with housing programs, such as those funded by the U.S. Department of Housing and Urban Development, that help to identify children who are homeless and may be in need of special education.

If the state is limiting Medicaid coverage to those services included in the IEP/Individualized Family Service Plan (IFSP), then child find services that do not result in an IEP/IFSP being issued are generally not Medicaid coverable services.  If the state has broader coverage beyond services described in an IEP/IFSP, then child find services could be coverable regardless of whether an IEP/IFSP has been issued.
Managed Care 

Each State’s approach to expanding SBS can vary depending on factors such as which services are being expanded and the source of funding. While there are many different types of managed care arrangements, State Medicaid agencies (SMAs) have flexibility in determining how services are provided. SMAs may elect to deliver some services through managed care plans (MCPs) and other services through an FFS delivery system; in fact, the majority of States do not include SBS in managed care and cover them under an FFS delivery system. If SBS is included in a managed care delivery system, the MCP contract must clearly describe which services and administrative activities are included under the contract, to avoid duplication of payment and performance of assigned responsibilities. This requires enough specificity to avoid confusion about what is included in a covered benefit and whether the MCP is responsible for covering the benefit. Any Medicaid benefits not covered under the MCP contract remain the responsibility of the SMA to cover. We also remind States that State plan administrative activities not related to the plan’s furnishing of services may not be incorporated into the Medicaid managed care capitation rates.

CMS strongly encourages State Medicaid/CHIP agencies to proactively establish and/or strengthen relationships between MCPs, schools/LEAs, and school-based providers. State Medicaid agencies can require MCPs to establish relationships, strengthen partnerships, and coordinate care with school-based providers, including school-based health centers, in their managed care contracts, including through contractual managed care performance standards. Please refer to pages 30-32 of the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming for more information.
 

According to page 105 of the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming for the pay and chase method: 

“If the probable existence of a third party cannot be established or third-party benefits are not available to pay the beneficiary’s medical expenses at the time the claim was filed, the State Medicaid agency will pay the full amount allowed under their payment schedule. If the existence of a third party is determined after the claim is paid, or benefits become available from a third party after the claim is paid, recovery for reimbursement is sought to the limit of legal liability within 60 days from the end of the month in which the existence of the third party is determined.”

Additionally, States may exempt certain items or services from third-party liability (TPL) requirements when submission of claims for those items or services would always result in denial because the general insurance industry does not cover them. CMS requires the State to have clear and convincing documentation of non-coverage by insurers (this documentation must be updated at least annually). If a State has documentation, there is no need to further verify by submitting claims because there would be no liable third party and Medicaid TPL rules would not come into play. The controlling regulation is found at 42 CFR 433.139(b)(1), which states, “The establishment of third party liability takes place when the agency receives confirmation from a provider or a third party resource indicating the extent of third-party liability.” 

When non-coverage has been documented, the State may permit providers to use a specific code on the claim denoting non-coverage by the third party. This code could allow the Medicaid Management Information System (MMIS) to override the cost avoidance edit and pay the claim. The State would have to require providers to maintain documentation to substantiate non-coverage when using override codes and could conduct provider audits to ensure that the provider has appropriate documentation of non-coverage.

Section 1903(c) of the Act permits an exception to the TPL requirements for Medicaid-covered services included in a Medicaid eligible student’s IEP. This means that Medicaid will pay primary, or prior to federal IDEA funds for Medicaid-covered services listed in a student’s IEP. Although the Medicaid program pays first for covered IDEA services, these services are still subject to the TPL requirements applicable to any other services furnished under the State Medicaid program. The State Medicaid agency must still pursue payment for TPL as Medicaid is secondary to all other sources of payment. While this outlines the exception to Federal TPL requirements, States are required to pay and chase when it is cost-effective to do so.

Yes, under Medicaid law and regulations, Medicaid is generally the payer of last resort for school-based services for enrolled students who might also have commercial insurance coverage, a tort settlement, or other third-party resource. Congress intended that Medicaid, as a public assistance program, pay for health care only after a beneficiary’s other health care resources have been exhausted. However, there may be exceptions to the requirement to pursue TPL reimbursement (see Social Security Act § 1902(a)(25), Social Security Act § 1902(a)(25)(a), and 42 C.F.R. § 433.136).

No, States generally are not required to submit an updated SPA for third-party liability adjustments, because this policy is a clarification, rather than a change. However, if the State plan includes specific language on TPL, there may need to be an updated SPA. If recovery would not be cost-effective pursuant to 42 C.F.R. § 433.139(f), States may suspend efforts to seek reimbursement from a liable third party, including for IDEA or plan services under section 504 of the Rehabilitation Act. This could ease the administrative burden for schools.