Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.
Frequently Asked Questions
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.
The 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming (p. 15) has language that states that “coverable services also include child find evaluations and reevaluations.” Medicaid may cover child find screening, evaluations, and reevaluations in certain circumstances (see FAQ on Child Find Activities).
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.
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.
States generally have broad flexibility to identify the providers of a covered Medicaid service, including their qualifications, although specific federal provider qualifications do apply for certain services.
In the 1997 school-based services guidance, CMS instructed States that they could not rely on ED provider qualifications for Medicaid reimbursement or establish different provider qualifications for school-based and non-school-based providers within Medicaid. We have updated that guidance (see the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming) in order to give States greater flexibility to cover services provided by school-based health care providers whose provider qualifications under State and local law might vary from the qualifications for non-school-based providers of the same services, or whose scope of practice might be limited under State or local law to the school setting. Under this updated approach, States should not impose provider qualifications that are unique to Medicaid-covered services. For example, if a school-based provider is qualified under State or local law to provide counseling to any child (or any child in the school system), the State cannot impose additional provider qualification requirements under State law as a condition for receiving Medicaid payment for counseling provided to a Medicaid beneficiary.
If the State has included school-based providers as qualified providers of specific services in the Medicaid State plan, then individual school-based providers may seek to become Medicaid providers. For example, States may determine that counseling provided under the rehabilitative services benefit may be provided by licensed psychologists, social workers, family therapists, professional counselors, as well as certified school psychologists or school social workers who may not have the same qualifications. In some circumstances, a practitioner may be enrolled individually as a Medicaid provider and may either bill directly for the services they furnish or, consistent with 42 C.F.R. § 447.10(g), reassign their right to payment to the school or an agency contracted by the school to provide Medicaid-covered services. In other circumstances, the LEA or agency contracted by the school to provide Medicaid-covered services may be enrolled as a Medicaid provider and may be considered the “furnishing provider” for services provided by its employees.
We recommend referring to your State, local, or other generally applicable licensure or certification requirements, including certification by the Federal, State, or local department of education or national accrediting bodies.
As specified in section 1905(r)(5) of the Act, the EPSDT benefit 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. A formal diagnosis is not required according to Federal Medicaid rules. State Medicaid agencies determine medical necessity criteria.
Provider training provided by the Medicaid agency or its contracted designee regarding Medicaid covered services, or aimed at improving the delivery of Medicaid services, is reimbursable as a Medicaid administrative expenditure. This could include, for example, training for case managers, individuals who develop and coordinate person-centered care planning, primary care practitioners, or hospital discharge planners. Costs incurred by the providers to meet continuing education and advanced training requirements cannot be claimed as a Medicaid administrative expenditure; as described above, in some circumstances such costs may be reflected in provider rates. Regulations at 45 C.F.R. Part 75 provide the relevant cost regulations. Additional discussions on the inclusion of training costs in rate development and other regulations surrounding allowable and unallowable costs in Medicaid are in the CMCS Information Bulletin dated 7/13/2011.
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).