Momentum Builds for Expanding School Health Services

August 19, 2022 | Written By:

New federal guidance issued this week by the Centers for Medicare and Medicaid Services will make it easier for states and school districts to offer more physical, behavioral and mental healthcare to more children in K-12 schools. The guidance will help states leverage available and sustainable Medicaid funds to expand school-based health services — including hiring more social workers, psychologists and other behavioral and mental health providers. Read below to find out more.

HSC Statement on New Guidance

“We are very pleased to see the Biden administration and the Department of Health and Human Services recognize the importance and value of providing children and adolescents with the health services they need where they spend most of their time — in school,” said Rochelle Davis, HSC president and CEO. 

Davis spoke with CNN about the new bulletin “Information on School-based Services in Medicaid: Funding, Documentation, and Expanding Services,” one of several actions announced to strengthen mental health services for children.

Historically, the Centers for Medicare and Medicare and Medicaid Services (CMS) did not allow Medicaid reimbursement for health services provided in a school setting if the health service was provided to the general student population free of charge. This became known as the “free care rule.” 

Exceptions were made for health services outlined in a student’s Individualized Education Plan (IEP) and under other limited circumstances. However, since only about 14 percent of students nationwide have an IEP, schools have been delivering health services without reimbursement for the majority of students enrolled in Medicaid. 

In late 2014, CMS reversed its policy and made clear that states could allow school districts to seek reimbursement for all eligible health services. So far, 17 states have made the necessary changes to their state Medicaid plan to support school districts. Several more states are in the process of doing so. (HSC provides support to states through the Healthy Students, Promising Futures Learning Collaborative.)

The benefits are well documented, including more funding to hire additional school nurses and behavioral and mental health providers to meet student needs, but it took the pandemic – and the youth mental health crisis — to bring the importance and value of school health services to the forefront.

“All states use school Medicaid to cover some services delivered to some students,” said Davis. “The new guidance helps states leverage funding for all health services provided to all Medicaid-enrolled students, which is what CMS intended. This benefits the entire school population.” 

The bulletin is one of several steps CMS has taken to support access to Medicaid-funded school health services since the inclusion of school Medicaid in the Bipartisan Safer Communities Act, which was signed into law in June. 

More guidance is expected in the coming months, in accordance with Section 11003 of the Act, including the release of an updated Medicaid School-Based Administrative Claiming Guide and Medicaid and Schools Technical Assistance Guide. This guidance is expected to provide a clear roadmap for states and school districts that may have been reluctant to move forward, or that lack the staffing to manage complex billing procedures.

Additionally, the Act requires CMS, in collaboration with the U.S. Department of Education, to establish a technical assistance center to support state Medicaid agencies and local educational agencies with strengthening and expanding their school Medicaid program.

The second informational bulletin issued this week, “Leveraging Medicaid, CHIP, and Other Federal Programs in the Delivery of Behavioral Health Services for Children and Youth,” reminds state agencies of the federal requirements of the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit — including the mandate to cover behavioral health services. It also provides guidance on how Medicaid and Children’s Health Insurance Program (CHIP) funding can be used to secure health services for children and youth.

The third action is a proposed rule issued by HHS requiring states to report certain quality measures to strengthen Medicaid and CHIP. 

To learn more about the role of school Medicaid in expanding access to and resources for school health services, check out Healthy Schools Campaign’s newly updated “Guide to Expanding Medicaid-Funded School Health Services.”

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