New Data Shows Success of School Medicaid Expansion in Illinois

May 30, 2024 | Written By:

Expanding billing for Medicaid-enrolled students and the school health services they receive resulted in Illinois school districts drawing down nearly $17.8 million in additional Medicaid funding, new data shows.

Public Consulting Group, the state’s administrative vendor for school health services, recently announced the results of the first billing year and the financial impact on participating school districts.

The influx of new funds is the result of Illinois’ decision to make significant changes to its school Medicaid program and permit school districts to seek reimbursement for all Medicaid-covered physical, behavioral and mental health services provided to all students enrolled in Medicaid. Previously, billing was allowed only for students with an Individualized Education Plan (IEP) or Individualized Family Service Plan (IFSP), limiting reimbursement to just 14 percent of the 800,000 students enrolled in Medicaid across the state.

Illinois also added five types of health providers, including licensed clinical professional counselors and psychologists, to the list of district-employed providers eligible for Medicaid reimbursement. The school Medicaid program shifted to a cost-based reimbursement methodology for determining the actual cost of delivering school-based health services.

The state received federal approval for these changes in 2023. Since billing was retroactive to 2021, when Illinois first submitted a state plan amendment detailing the revisions, districts could begin billing immediately.

Opportunity to Reinvest in Student Health

The total Medicaid reimbursement for all Illinois school districts in the 2021-22 school year exceeded $200 million, the result of all statewide Medicaid billing changes. School districts that implemented these changes received an average additional $140,000 during the program’s first year.

“This is a huge win for students and school health services,” said HSC National Program Director Jessie Mandle. “These numbers are a testament to the hard work of many school districts and state staff preparing for these changes, and we are thrilled to see their work pay off.”

HSC organized a campaign advocating for Illinois to amend its state Medicaid plan and later led a statewide learning collaborative to support Illinois school districts in preparing for the rollout. HSC also developed an interactive “Guide to Illinois School Medicaid Billing and Reimbursement” to assist school districts in developing processes and procedures to maximize reimbursement, ensure compliance and ultimately increase the availability and quality of health services for students.

When states expand school Medicaid, they create an opportunity for school districts to draw down additional and sustainable federal Medicaid funding. This additional funding can be reinvested in school health services, further increasing students’ access to care.

More Work Needed

While the overall financial impact of expansion was positive, a minority of districts did not immediately benefit due to new federal clarifications that led to reduced reimbursement for certain services. Though this issue should be resolved in the future for most districts, the abundance of state and federal changes underscores the need for cross-agency collaboration.

HSC encourages Illinois Healthcare and Family Services (HFS) and Illinois State Board of Education (ISBE) to provide increased technical assistance and support to districts to increase success across the state. An updated state Medicaid handbook offering additional implementation guidance would benefit all districts.

“It’s also important for the state to learn more about how schools and districts are using the increased reimbursement,” said Mandle. “HFS and ISBE can play a critical role in collecting information from school districts to better understand the impact of the program, support program improvements and align expansion funds with other statewide mental health initiatives and funding opportunities.”

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Note - updated to the HSC Newsletter list 1.3.2017 per the updated newsletter configuration