HSC Urges Support for Federal Rule Change to Streamline Billing for School Health Services

July 25, 2023 | Written By:

Photo by Allison Shelley for EDUimages

In an effort to increase the funding schools receive for providing health-related services, the U.S. Department of Education is proposing to streamline billing permissions for students enrolled in Medicaid. 

The proposed rule change, which Healthy Schools Campaign supports, would lift a requirement for schools to obtain parental consent a second time before billing a child’s health insurance — Medicaid or Children’s Health Insurance Program (CHIP) benefits — for health services provided under the Individuals with Disabilities Education Act (IDEA). 

Under existing regulations, all families must provide consent for their child’s enrollment in Medicaid and for schools to provide medically necessary services through the Family Educational Rights and Privacy Act (FERPA) and other provisions in IDEA. Consent to bill Medicaid is included as part of Medicaid enrollment. However, a duplicative billing consent is required for students with an Individual Education Plan (IEP). 

According to school administrators, the separate form for billing Medicaid for IEP services is not only redundant but confusing, especially in families where one child has an IEP and the other doesn’t. It also has caused misinformation to spread about Medicaid benefits and who is responsible for payment. As a result, many school districts report that the forms aren’t being returned — and this limits the amount of funding schools can receive for services provided. 

HSC is urging individuals, school districts and organizations to submit a comment in support of the rule change by Aug. 1, 2023, the end of the public review period. A sample letter is available for public use. The Education Department will review all comments and suggestions before making the change final.

Permission to bill gives schools authorization to recover federal funds, which help cover a portion of the costs involved in providing health-related services to students with disabilities. If the consent form is not signed, services will be provided at no cost to families, but school districts will be unable to claim reimbursement. This can affect school staffing levels and the quality of care in schools.

“Especially as more states expand access to Medicaid-funded school health services, we must remove barriers for schools so they can more easily provide — and fund — much-needed physical, behavioral and mental health services,” said Jessie Mandle, HSC’s national program director. 

“By removing the extra step for parents who have children with disabilities, we are ensuring all families are treated equally,” Mandle added.

• Maintains parental consent provisions required by IDEA and parental consent obligations under FERPA.
• Maintains the requirement that IEP services must be delivered at no cost to the child’s family
• Maintains the ability for families to seek other Medicaid-covered health services outside the school setting.
• Maintains the right for parents to withdraw permissions at any time.

The proposed rule’s narrow scope has no impact on services, costs or parental rights. Parents would continue to give permission for their child to be evaluated to determine whether there is a disability under IDEA; for the provision of initial special education and related services; and for reevaluation of the disability. The proposed rule is a simple, commonsense fix that aligns the consent process to ensure parents still have control but that they are not forced to do additional, duplicate paperwork. 

According to a December 2022 survey of school district leaders and Medicaid coordinators on the impact of the consent to bill regulation, two-thirds of respondents described the administrative burden of following up with parents and explaining the form’s importance as “significant.” And 18 percent of survey respondents said 50 percent or more of their forms are not signed.

As one respondent wrote: “We currently have 37 percent of Medicaid eligible students without signed consent. This is a significant amount of revenue we are not receiving. Contacting parents, sending and explaining consent forms takes time that could be spent serving students.” 

The proposed rule does not address — and has no impact on — coordination of care across school and community settings. Children should be able to benefit from Medicaid-funded health services provided in and outside of school at all times. Improving communication among all parties involved in a child’s care would help to ensure that the same service isn’t provided on the same day, which complicates billing. Healthy Schools Campaign welcomes future discussions on how to make this process more seamless for families as well.  

For additional reading:

Medicaid Change Could Mean More Funding For Special Ed Services (Disability Scoop)
A Medicaid Change Could Make It Easier for Schools to Pay for Special Ed. Services (Education Week)
To Sign or Not to Sign: Why Are Schools Billing Medicaid for IEP Services? (NAME) – Though published in 2018, this article is useful for explaining the reason schools bill Medicaid and the benefits of doing so. The duplicate consent described would be lifted under the proposed rule.

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