by Jane Reagan, Specialist for the Michigan Department of Education, Office of Special Education
Many people are unaware that Medicaid partially reimburses some health care and outreach services provided in schools through the Medicaid School-Based Services (SBS) program. The Medicaid SBS program helps defray some of the rapidly increasing costs to schools for the health care and related services delivered to students with Individualized Education Programs (IEPs)—under Part B of the Individuals with Disabilities Education Act(IDEA)—as well as services for infants, toddlers, and their families in Early On® programs—under Part C of IDEA. All 57 of Michigan’s intermediate school districts (ISDs) are enrolled with Medicaid as “providers.”
In 2008, the Michigan Medicaid SBS program instituted many changes—all effective July 1, 2008—including the list of services that can be reimbursed. The SBS program has increased the number of time studies for school staff and clinicians who provide certain health services to students. ISDs must follow many new procedures in order to receive Medicaid reimbursement.
This FOCUS on Results article summarizes the recent changes in Michigan’s Medicaid SBS program since July 2008 and attempts to guide stakeholders to a better understanding of how the changes impact school districts. Also discussed is the expected impact of program changes to children, students, and their families. The first year since the changes were instituted ended at the time of this writing, so districts are now beginning to evaluate the impact of the 2008 program changes—including added staff time and higher costs for participation—and they are reviewing student outcomes to measure actual benefits.
The Medicaid SBS reimbursement process is complex; it returns a small share of actual school district costs for health care and related services; and it requires districts to understand and follow rules, regulations, and requirements of both the Medicaid program and the IDEA. Michigan public school administrators generally report the benefits of their participation in the SBS program as worth the challenges, and all of Michigan ISDs currently participate.
In Michigan, there are more than 1.6 million individuals, of all ages, who are eligible for and enrolled in the Medicaid program, and the majority are children or youth—many enrolled and/or attending Michigan’s public schools. Of those pupils, many receive school-based health care and related services such as speech therapy, physical therapy, service coordination, or have an aide or paraprofessional to assist them during their school day.
In the Beginning
In 1993, the Michigan Department of Education (MDE) and the Michigan Department of Community Health (MDCH) forged a partnership to allow ISDs to enroll in the Medicaid program (housed at that time within the Michigan Department of Social Services) to receive Medicaid reimbursement for some health care and related services. The program was called Michigan Medicaid SBS. This program has helped defray some of the costs of delivering health care in schools, mostly for children enrolled in special education, but also for infants and toddlers and their families in Early On programs.
A state-level interagency agreement was signed and enabled by changes the U.S. Congress made in 1988 in the federal Medicaid statute (Title XIX of the Social Security Act). Developing, implementing, and maintaining a program that brings together two very different and complex systems—Medicaid and education—is not easy, but the reimbursement dollars help cover some of the costs of providing essential care for children and youth with disabilities. The Michigan Medicaid SBS program recognizes that public schools are required by the IDEA to provide specific services and supports—some of which qualify for Medicaid reimbursement—to children and students eligible for Early On and special education. The essence of Early On and special education programs and services has not changed for children and students, but with the SBS program in place, parents/guardians and school staff have additional requirements to meet. [[For more background information and a history of the Michigan Medicaid SBS program, see the May 2005 FOCUS on Results article: Michigan Medicaid School Based Services Program Helps Cover the Costs of Some Health Care Services.
For almost all Medicaid services in Michigan, reimbursement for health care expenditures made by a private sector provider—such as a Health Maintenance Organization (HMO), a dentist, a pharmacist, or a nursing home—comes partially from federal funds and partially from state funds. When reimbursing these providers during state fiscal year 2009 (October 1, 2008 through September 30, 2009), the Michigan Medicaid program pays them with a little more than 60 percent from federal Medicaid funds and almost 40 percent from state funds.
Medicaid reimbursement to public schools through the SBS program is different. The enrolled Medicaid provider is an ISD—a publicly funded entity using state, local, and some federal money to deliver education, health care and related services. Therefore, the reimbursement that the ISD receives is only the federal share. For example, in 2008 if an ISD submitted a claim for $100 reimbursement for speech therapy, only the 60 percent federal share of Medicaid funds (or $60) was sent to Michigan. The 40 percent state share (or $40) is considered previously allocated to the district from state and local funds (state taxes). Michigan then set aside 40 percent of the 60 percent federal share dollars for the Michigan Medicaid agency’s general fund. As a result, ISDs receive 60 percent of the federal share, and the Medicaid agency receives 40 percent. In most cases, for each $100 claimed by ISDs last year for services delivered, the reimbursement was approximately $36 ($100 x .60 [the 60 percent federal share]= $60; $60 x .60 [60 percent of the federal share reimbursed to ISDs] = $36).
In February 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act (ARRA). One section, Title V, provides for temporary increases in the federal contribution of Medicaid costs to each state. The law also allows the increase to be retroactive, so it became effective October 1, 2008 (Federal Register, Vol. 74, No. 75; Tuesday April 21, 2009, ppg 18235-7). The actual impact of the increase will help Michigan ISDs, but it is not expected to be paid until 2010 due to the new reimbursement process.
