Frequently Asked Questions

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.
 

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.

As stated on page 91 of the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming, as required by CMS, the supporting documentation file for each claim of FFP must include, at a minimum, the following:

• Date of service
• Name of recipient
• Medicaid identification number
• Name of provider agency and person providing the service
• Nature, extent, or units of service
• Place of service

Within an IEP many of the above requirements may be found, including:

• Name of recipient/child
• Eligibility for IDEA services and the child’s present level of achievement
• Name of provider agency/LEA
• Nature, extent, or units of service (called the frequency and duration of services)
• Place of service (called either the location or placement)

LEAs should review their State’s guidance for service documentation. Many States require additional information beyond the CMS requirements, such as a diagnosis code.

No, States may opt to maintain their current approach, including a fee schedule approach, if the existing State Plan Amendment (SPA) and underlying implementation mechanisms are compliant with all of the federal requirements discussed in the new SBS Guide. The newly introduced flexibilities are available options for States, but their adoption is not mandatory. If a State wants to depart from its currently approved SBS payment and/or claiming approach, including replacing a current fee schedule methodology or providing higher fee schedule payment amounts, a SPA is necessary.

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.