How California Schools Are Using Medicaid

  • October 5, 2016
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Since a regulatory change to the free care rule almost two years ago allowed states to use Medicaid funding to provide services to all Medicaid-enrolled students in schools, states have been exploring the best way to implement this change.

To take advantage of this opportunity, states, school districts and others need to come together to develop a plan and consider their options for implementing this new policy.  To help states do just that, the U.S. Department of Education has convened a learning collaborative for state teams. Healthy Schools Campaign and Trust for America’s Health are supporting this effort that includes 10 states.

A recent paper on California’s experience provides important information to states who are looking for promising best practices.

The California School-based Health Alliance, in partnership with Harbage Consulting, developed an important report that details California’s movement on the free care rule and provides specific policy recommendations for implementing the new federal regulations in California. The report, Policy Considerations for California Following the 2014 Reversal of the Medicaid “Free Care Rule,” is a resource for advocates and policymakers who want to learn more about the reversal of the free care rule, and how California is overcoming common policy barriers.

California: An Innovative State Plan Amendment

In September 2015, California submitted a state plan amendment (SPA) proposal to Center for Medicare and Medicaid Services (CMS) to permit local education authorities to qualify for Medicaid reimbursement for covered services to all Medicaid-enrolled students.

The California School-based Health Alliance paper includes lessons and recommendations that may provide process guidance and early thinking on the following common challenges experienced by states:

Challenge: Medicaid requires, under a provision called “third-party liability,” that schools identify and bill other student insurances before Medicaid. Schools encounter administrative hurdles, and schools have struggled to obtain the documentation required to claim reimbursement from Medicaid.
Recommendation: Request a federal waiver of third-party liability. States must demonstrate in writing that the collection of third-party liability information is not cost-effective.

Challenge: Education departments currently play a small role in school Medicaid billing but are familiar with school regulatory policies and the school staff roles.
Recommendation: Strengthen the role of the education department in the Medicaid billing program. Education departments could play a more comprehensive role in helping school districts implement policy change and design successful models.

Challenge: Many schools work with external vendors to submit claims for health services.
Recommendation: Ensure that vendors have accurate program and policy information and develop resources for vendors as schools improve their billing infrastructure.

Challenge: Policy and structural barrier exist that make data sharing between schools, education departments and Medicaid difficult.
Recommendation: Identify tools and resources that could help schools improve data sharing. CMS and states should provide clear guidance on data sharing rules.

Stakeholders and policymakers should learn more about each of these barriers and recommendations—as well as find more information on California’s plan to expand school-based health services. California’s experience provides a critical case study about the opportunity to expand school-based services.

Additional Resources for Stakeholders

Stakeholders and policymakers should review their Medicaid state plans to determine which Medicaid services are provided in schools and are currently reimbursed by Medicaid. Some states are already engaged in a formal process to advance school-based health services. Healthy Schools Campaign has developed a comprehensive guide to implementing the free care rule to help you understand your state’s environment and engage in this important opportunity to advance school-based health services.