The Opportunity to Expand School Health Services and Increase School Funding
Illinois has an opportunity — and responsibility — to update its state Medicaid plan to expand physical, mental and behavioral school-based health services. Doing so would improve healthcare access for K-12 students and allow school districts to secure sustainable funding. Read the latest news in the Healthy Student SPA: FAQ.
In 2014, the Centers for Medicare & Medicaid Services (CMS) issued a letter to state Medicaid directors announcing that school districts could seek reimbursement for all eligible health services delivered to all students covered by Medicaid. This was a significant shift. Previously, reimbursement was allowed only for specific health services delivered under a student’s Individualized Education Plan (IEP), and in other limited situations.
Though CMS opened the door to greater federal financial support, some states, including Illinois, had codified the original policy into their Medicaid state plans — which meant they couldn’t take advantage of this opportunity without first removing the outdated restrictions.
Today, more than a dozen states have updated their Medicaid plans, with more in progress. These states are benefiting from increased funding for health services and providers, including additional school nurses and school psychologists.
But Illinois isn’t one of them. Until Illinois moves forward to update its Medicaid plan, it’s leaving federal money on the table.
The Solution: Healthy Student State Plan Amendment
Illinois needs to remove the IEP restriction and submit a state plan amendment to CMS for approval. The process is managed by the state Department of Healthcare and Family Services; it does not require any state or local legislative changes. We’ve termed this simple change the Healthy Student State Plan Amendment (SPA).
What would the Healthy Student SPA mean for Illinois school districts? In short, school districts would be able to access federal funds for health services already being delivered to all 800,000 students enrolled in Medicaid, including 235,000 students in Chicago alone, instead of only the 14 percent of Medicaid-enrolled students with an IEP.
This would be a huge win for students and schools, and an important resource and equity issue for all of Illinois.
In addition, Illinois could use this opportunity to expand the types of health services and providers eligible for Medicaid reimbursement. Following the lead of other states that have amended their state plans with CMS approval, the Healthy Student SPA should include these two provisions:
- Allow billing for all medically necessary services outlined in Medicaid’s comprehensive EPSDT benefit.
- Allow billing for all eligible health providers and update the types of eligible providers.
State Success Stories
As of early 2021, 13 states have successfully expanded their school-based Medicaid programs through the CMS opportunity. Michigan, for example, added school psychologists to the eligible provider list and estimates a $14 million increase from billing for services. Other states have approvals pending with CMS, and many more are well along in the process.
Learn more about the Healthy Student SPA and state success stories in this FAQ.
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Healthy Student SPA | FAQ
To align with federal policy allowing the expansion of Medicaid-funded school health services, the Illinois Department of Healthcare and Family Services (HFS) needs to update its state Medicaid plan. The changes, in the form of a state plan amendment (SPA), would then be submitted to the Centers for Medicare & Medicaid Services for approval.
In early 2021, HFS agreed to move forward with a Healthy Student SPA allowing school districts to receive reimbursement for all medically necessary services, as outlined in Medicaid’s comprehensive EPSDT benefit, delivered by eligible providers.
HSC developed a fact sheet on HFS’s proposed changes and submitted recommendations on provider types based on feedback from school stakeholders. Learn more about the Healthy Student SPA in the FAQ below.
FINANCIAL & HEALTH BENEFITS
How many children would be affected if the state Medicaid plan is amended?
Currently, school districts in Illinois can seek Medicaid reimbursement only for certain health services outlined in the Individualized Education Plan (IEP) of a Medicaid-enrolled student. That means reimbursement is available only for about 112,000 students — or 14 percent of the 800,00 students covered by Medicaid who receive school-based health services each year. This restriction is codified in the Illinois state Medicaid plan.
The Illinois Healthy Student State Plan Amendment (SPA) would eliminate this restriction and bring Illinois into alignment with federal policy, allowing school districts access to federal funds for all eligible health services delivered to all 800,00 students enrolled in Medicaid, including 235,000 children in Chicago alone.
How would Illinois benefit by allowing schools to expand billing for Medicaid services?
Allowing schools to bill Medicaid for health services they already are providing — and expanding the types of eligible services and providers they could bill for — would mean more federal revenue for Illinois and more reimbursement to school districts.
This would relieve schools of the pressure to use scarce education dollars to bridge the gap in funding health services. And as schools struggle to address the challenges brought on by COVID-19, this additional funding could help offset costs and ensure more students receive the physical, behavioral and mental care they need.
Which additional health services and providers would be considered eligible for Medicaid reimbursement?
The Center for Medicare & Medicaid Services (CMS) is encouraging states to include billing for “all medically necessary services” in their state plan amendments. This approach pulls from Medicaid’s comprehensive Early, Periodic, Screening, Diagnosis, Treatment (EPSDT) benefit.
In addition to following the CMS recommendation, the Illinois Healthy Student SPA should include an updated and comprehensive list of approved Medicaid service providers, such as social workers and school counselors. Expanding services and allowing billing for additional types of providers helps schools build their capacity to meet the health needs not only of students enrolled in Medicaid, but of the entire student population.
How might this opportunity increase funding for COVID-specific activities?
Screening for or monitoring children’s symptoms could be a Medicaid reimbursable service. Down the road, Medicaid might reimburse for contact tracing and COVID testing and potentially for vaccinations.
When would the Healthy Student SPA be implemented?
That depends on when the Illinois Department of Healthcare and Family Services (HFS) submits the SPA and when CMS approves it. Every day that goes by, districts are losing thousands of dollars in potential revenue. However, school districts may be able to retroactively bill Medicaid for services provided from the date the SPA is submitted — instead of the date it is approved.
Do all states need to amend their state Medicaid plan to take advantage of this opportunity?
States that codified the older federal policy allowing reimbursement only for Medicaid-enrolled students with an IEP need to submit a state plan amendment. Other states are able to implement this change administratively without a SPA. More information on state procedures and progress is available in this state activity tracker.
How many states have expanded school health services for students covered by Medicaid?
As of the summer of 2021, 16 states, including states similar to Illinois such as Massachusetts and California, are able to leverage federal funds and expand the types of services and providers eligible for reimbursement. More states are in the process of applying for CMS approval; there is an especially strong interest in leveraging the opportunity to support mental health services.
Here are some examples of how states have benefited from expanding their school Medicaid program:
Michigan: Estimated an increase of $14 million from billing for services delivered by school psychologists — a provider group not previously included under eligible providers. Michigan also added nurse practitioners, physician assistants, clinical nurse specialists, marriage and family therapists, behavior analysts and school social workers, and the state now permits billing for all medically necessary services included in Medicaid’s EPSDT benefit.
**Michigan and Illinois are in the same CMS region, so the same office that approved Michigan’s SPA will review Illinois’ SPA.
Louisiana: After receiving approval in 2015 to expand nursing services, Louisiana increased the number of school nurses by nearly 15 percent statewide and tripled revenue. The state then submitted a second SPA request and received approval in April 2020 to expand billing for all eligible providers and services.
Colorado: Colorado conducted an expansion study that convinced legislators of the cost-savings. By adding school psychologists to the eligible provider list, Colorado predicted the state would receive $12 million in new federal Medicaid funds. The SPA was approved in 2020.
Kentucky: With SPA approval in 2019 to expand billing for all Medicaid-enrolled students, the state used funds to add school counselors and mental health services — services that were mandated under a new school safety law that lacked dedicated funding. The state applied for a second SPA in 2020 to update reimbursement methods.
Georgia: Similar to Louisiana, Georgia’s (pending) SPA focuses on expanding school nursing services. The state projects that implementation will result in more than $48 million in additional revenue for school nurses.
Read more examples in this blog post.
MEDICAID REVENUE & SPENDING
Are there any costs involved with expanding billing?
The proposal to expand billing for school health services is considered a budget-neutral policy change for Illinois; it does not increase Medicaid or other healthcare costs.
Does the Healthy Student SPA require any legislative changes?
The amendment process does not require any state or local legislative changes. Illinois Department of Healthcare and Family Services (HFS) would continue to serve as the pass-through agency for Medicaid reimbursement to school districts, with HFS receiving a 4-percent administrative fee, the same as it does now.
How would this SPA affect Medicaid revenue and spending?
CMS reimburses states for a portion of the services that are billed, and each state passes all or some of the money back to schools and districts. When a state increases the number of eligible services that are billed to Medicaid, the state gets back more money from CMS.
The converse is also true: Not billing for otherwise eligible services that are already being provided in schools means leaving federal dollars unclaimed. When that happens, state taxpayers bear the entire cost of services. This makes Medicaid a very important source of funding for school health services — and for state health and education budgets overall.
Can school districts use this reimbursement as general revenue?
Generally speaking, yes — school districts can designate it as general funding. In other words, a dollar of reimbursement for school nursing services is not necessarily a dollar reinvested in school nursing. Additional funding can be a significant boost for school budgets and helps districts stretch scarce local funding.
Some states, however, have opted to require school districts to reinvest Medicaid reimbursement in school health, and this investment has proven beneficial for school health services overall.
DELIVERY OF SCHOOL HEALTH SERVICES
Are schools required to provide health services for students?
For students with special needs, medical and behavioral health services that are listed in a student’s IEP must be provided to help with learning preparedness. These services often include physical therapy, speech therapy, occupational therapy and mental health counseling.
If the Healthy Student SPA is approved, are all school districts immediately expected to take part?
No; there is no mandate for school districts to take part, but those that do can seek additional reimbursement, thereby recouping a greater portion of their spending.
Some states that have updated their Medicaid state plan have created rollout plans to ensure implementation is manageable and effective. School districts can collaborate with each other to learn best implementation and billing practices and move forward when they are ready. HSC has resources available to assist states and school districts with this process.
How would allowing schools to expand billing affect schools with a school-based health or mental health clinic?
This SPA would complement and build on the school health care models currently in place by providing new federal funds for health and mental health services provided to students covered by Medicaid. School districts would maintain their flexibility to design school health programs to meet their unique needs, including further investments in school-based Medicaid and partnerships with school-based health and mental health centers and other school-based health services by community-based providers. Schools would not be required to implement any changes to their program or billing policies if the school does not find it beneficial.
What happens with children with private insurance?
If a health service is offered to all students in schools, such as vision and dental screenings, those with Medicaid could be billed and those with private insurance would be free of charge. Allowing Medicaid billing for some students makes it possible for all children to have access to some important health screening and services without needing to get insurance information from parents or leaving school for appointments.
How would this impact Medicaid managed care organizations?
School health services are currently carved out of Illinois’ Medicaid managed care contracts, which means school districts bill the state for Medicaid-eligible health services, not manage care organizations (MCOs). Expanding access to school health services can help MCOs meet accountability metrics, particularly around management of chronic illness and addressing mental health needs. These services are not duplicative of the services enrollees are entitled to through their MCOs and instead help ensure students receive the care they need.
Schools can also play a key role in Medicaid enrollment, thus ensuring all Medicaid-eligible students have coverage. Finally, school health providers play a critical role in care coordination by referring students and families to follow-up care in the community following screenings and evaluations conducted in schools. Strengthening this infrastructure and ensuring the school health providers are in place that are necessary to do this work directly supports Illinois’ commitment to Medicaid managed care.
HSC has developed resources and social media messaging urging Governor Pritzker, the Illinois State Board of Education and the Illinois Department of Healthcare & Family Services to support and implement the Healthy Student State Plan Amendment (SPA).
Let us know what other tools would be useful to help increase awareness about the importance of expanding school health services.
SOCIAL MEDIA TOOLKIT
View suggested tweets, posts, sample newsletter text and more
- Letter to Governor Pritzker signed by 53 health service providers, hospitals, and health and education advocacy, philanthropy and community-based organizations. Short link: http://bit.ly/pritzker-expand-school-health-services
- Press release announcing the kick-off of the Healthy Student SPA campaign
- Support letter from Fight Crime: Invest in Kids Illinois
- Illinois policy brief: Schools Are Key to Improving Children’s Health: How Illinois Can Leverage Medicaid Funds to Expand School Health Services
SOCIAL MEDIA GRAPHICS
For more information, contact:
Alex Mays, Senior National Program Director
View: Informational Webinar for School Districts
School Funding and the Illinois Healthy Student State Plan Amendment (SPA)
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Reports & Resources
State Efforts to Expand School Health Services: Activity Tracker
This regularly updated brief tracks state efforts to expand access to school health services, either through a state plan amendment or through legislative/administrative action, allowing school districts to bill Medicaid for health services delivered to all Medicaid-enrolled children.
Healthy Students, Promising Futures Learning Collaborative
The Healthy Students, Promising Futures (HSPF) Learning Collaborative, led by HSC, brings together state teams committed to increasing access to school health services billed to Medicaid. HSPF offers numerous resources and hosts an active webinar series (archive available) featuring Medicaid policy experts, state government officials and school district leaders.
Schools Are Key to Improving Children’s Health: How Illinois Can Leverage Medicaid Funds to Expand School Health Services
This brief addresses the steps Illinois must take to amend its state Medicaid plan and increase access to school health services. It includes school provider staffing and student health metrics and lessons learned from other states.
Schools Are Key to Improving Children’s Health
Key opportunities exist for education, healthcare and public health sectors to improve both health and education outcomes by focusing on school-based health services. This national policy brief addresses the opportunities to expand on health services delivered within a school by school nurses and other district-employed providers.
A Guide to Expanding Medicaid-Funded School Health Services
This guide is designed to support everyone working to expand access to school health services that are paid through Medicaid, including state and local education agency staff, state Medicaid agencies, school health providers, public health professionals and advocates. All of these stakeholders share a common goal: improve student health and educational outcomes.