Part B of IDEA provides Federal funds to SEAs, and SEAs subgrant a majority of IDEA funds to LEAs and school districts. IDEA funds assist SEAs and LEAs in providing a free appropriate public education (FAPE) to eligible children (generally ages 3 through 21) with disabilities through the provision of special education and related services. As explained below, Medicaid is a funding source for special education and related services for Medicaid enrolled children.

The 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming provides information pertaining to school-based services covered through separate CHIP, Title XXI-funded Medicaid expansion CHIP, and Medicaid. Information about the options and requirements for school-based services provided through separate CHIPs is provided throughout the guide.

According to page 105 of the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming: 

Services not included in a student’s IEP are not considered the same as IDEA services under section 1903(c) of the Act. CMS does not consider LEAs to be legally liable third parties to the extent they are acting to ensure that students receive needed medical services to access a “free appropriate public education” (FAPE) consistent with section 504 of the Rehabilitation Act. Therefore, LEAs may bill Medicaid for non-IEP services students receive only after they bill any outside legally liable third parties (pursuant to Social Security Act § 1902(a)(25)).

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.

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).

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

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.