On March 18, 2013, the federal government implemented new IDEA regulations. These changed requirements for parental notice when the school district wants to access Medicaid or private insurance to pay for health related services in the IEP/IFSP (34 CFR 300.154(d)(2)(iv)(B). This is said to improve school districts’ access to public benefits while still protecting parent rights. Final regulations require that public agencies:
This new addition to IDEA reduces the paperwork of the school district by no longer requiring parental consent each time access to public benefits or insurance is sought. Billing can only be for “medically related services” including assistive technology, hearing aid devices and services, and speech, occupational and physical therapy, Early and Periodic Screening, Diagnostic and Treatment (EPSDT) etc. Services that are covered are found in the individual states’ Medicaid State Plan.
In 1988 Sec. 1903 ( c ) of the Social Security Act was amended to allow Medicaid coverage of health related services in IDEA. Because special education was never fully funded by the federal government, states were forced to look for sources of special education finance outside of state and local tax bases. Medicaid is such a source.
IDEA services are reimbursed by Medicaid if:
There is currently wide variation from state to state when billing Medicaid for IDEA services. Specific guidelines are needed to create and standardize methods to be used when billing Medicaid for IDEA services (Bachman & Flanagan, 1999). From 1999 to the present there has been tension between the Government Accounting Office (GAO) and the Department of Health and Human Services regarding the need for greater technical services for schools when billing Medicaid for services (DeParle Memo, 11/15/99) It is recognized that schools are not as prepared as traditional health care providers in the billing process, and that many managed care facilities may not recognize school-based providers. Federal interactions between Medicaid and IDEA reflect that some districts’ claims for administrative costs associated with school-based health services may have been inappropriate. Coordination between Medicaid and educational agencies is most important and needs to be improved (GAO Report, 1999). Clear and consistent federal guidance is needed so as to prevent misuse of Medicaid funds for school based services.
In 1993 the New Jersey Department of Education, Human Services, and the Treasury began the Special Education Medicaid Initiative (SEMI). The purpose was to recover costs for certain special education services for both the state and local school districts. SEMI is a separate and unique project from all other Medicaid programs in that it is limited to services in educational settings. (SEMI Provider Handbook, 2011). In January 2005, the State contracted with Public Consulting Group for claiming assistance for the two programs, IDEA and Medicaid. The state’s website has not been updated since 7/19/11, so that guidance for the new IDEA regulation is not available at the present time.