Section 2: Recommended Actions

Until recently, barriers existed for states to use Medicaid funds to provide health care services in school-based settings. Due to the “Free Care” rule, states were previously only able to obtain federal reimbursement for services provided to Medicaid-enrolled students who had an Individualized Education Program (IEP) and in other limited situations. The policy change, known as the “Free Care Policy Reversal” and also referred to as the “Medicaid expansion,” makes clear that Medicaid coverage is available for a wide range of services — regardless of whether a child is covered by an Individualized Education Plan (IEP) under the Individuals with Disabilities Education Act (IDEA). This program includes services clearly related to mental health, like nurses and guidance counselors, but also a wide array of services ranging from occupational therapy to audiology. The goal of the Policy is simply to facilitate and improve access to quality health care services and improve the health of communities.

States can extend Medicaid’s reach beyond the IEP and tap into Medicaid funding to increase access and resources for comprehensive school-based health services. The youth mental health crisis has created further urgency to accelerate this progress. The method by which states may extend Medicaid’s reach beyond the IEP is state specific. While the actions needed may differ state by state, states should pursue any opportunity that is available. Some states may pursue policy changes or legislative efforts. Other states may submit an amended state plan to cover services delivered to all Medicaid-enrolled students, and to cover all medically necessary services that the Medicaid-enrolled student needs. This State Plan Amendment (SPA) is needed because while providers in the community can bill Medicaid directly for these services in accordance with the state plan, providers who are school employees or contractors must rely on the school to submit bills to Medicaid on their behalf. States generally have separate payment protocols for school-based services, and some states have not incorporated these services into their payment methodology.

What States Can Do

1. To incorporate school-based services within the state’s payment methodology, states must take action. Some states may pursue their own policy changes or legislative efforts. Other states may submit an amended state plan. For states that must amend the state plan, the state should amend to cover services delivered to all Medicaid-enrolled students, and to cover all medically necessary services that the Medicaid-enrolled student needs. At the time of this publication, only 18 states have taken action to expand Medicaid’s reach beyond the IEP. 1 Healthy Students Promising Futures, Map: School Medicaid Programs, https://healthystudentspromisingfutures.org/map-school-medicaid-programs/ Go to reference

The new federal guidance offers best practices and resources to facilitate the process, including tips for removing barriers and simplifying policies. But states need to act now, as this process can often take time, and the federal agencies have made clear that the current guidance needs to be utilized to lay this foundation now while the forthcoming guidance expected in June 2023 is meant to build upon a foundation that has already been laid.

What Affiliates Can Do

1. Begin discussions with state decision makers (such as SEAs, state health and Medicaid departments, and the Governor’s office) to determine whether the state has submitted the necessary SPA.
2. If the state has taken action to extend Medicaid's reach beyond the IEP, affiliates should work with partners to ensure that all students with Medicaid have parental consent to allow services to be offered and billed for. In order to do so, affiliates can review the requirements pursuant to the Department of Education Assistance to States for the Education of Children with Disabilities [§ 300.154(d)(2)(iv)] pertaining to parental consent. 2 U.S. Department of Education, Office of Special Education and Rehabilitative Services, “Interpretation of 34 CFR §300.154(d)(2)(iv)(A),” May 3, 2007, https://sites.ed.gov/idea/files/policy_speced_guid_idea_memosdcltrs_osep07-10interpretationof34cfr300154.doc Go to reference  This regulation clarifies what information or permission a public agency must obtain prior to accessing a child’s or parent’s public benefits or insurance for the first time. Parental consent must be obtained under the Family Educational Rights and Privacy Act (FERPA) and IDEA before a child’s personally identifiable information may be released to a public benefits or insurance program (e.g., Medicaid) for billing purposes. On matters of parental consent, please be mindful of the Health Insurance Portability and Accountability Act (HIPAA) requirements, including the 2019 updated joint guidance provided and, while not yet finalized, the proposed rule by HHS that was released in February 2023.
3. If the state has NOT taken action to extend Medicaid's reach beyond the IEP, affiliates should begin conversations with state decision makers voicing their concerns and reminding them that the BSCA is a historic investment in the mental health of students, and that the state needs to act to ensure that the required framework is in place. Consider including all school-based providers in such efforts to avoid additional amendments at a later date.
4. Affiliates should work with state decision makers to determine the best payment methodology for school-based services. In determining options for paying school-based providers, states have considerable flexibility in setting provider payment rates. Options for paying school-based providers include:
   1. Using the existing state plan payment rates for the same services provided in settings other than schools
   2. Developing unique payment rates for school-based providers that more closely reflect the costs incurred,
   3. Using cost-based rates that are not reconciled to the actual cost of providing services (e.g., a state that uses prior-year cost reports to establish current or future cost-based rates)
   4. Using the actual cost of providing the Medicaid-covered services (this information is usually provided in a uniform cost report from the provider)

The “Free Care Policy Reversal,” also known as “Medicaid expansion,” makes clear that Medicaid coverage is available for a wide range of services, regardless of whether or not a child is covered by an IEP under IDEA.

• 1 Healthy Students Promising Futures, Map: School Medicaid Programs, https://healthystudentspromisingfutures.org/map-school-medicaid-programs/
• 2 U.S. Department of Education, Office of Special Education and Rehabilitative Services, “Interpretation of 34 CFR §300.154(d)(2)(iv)(A),” May 3, 2007, https://sites.ed.gov/idea/files/policy_speced_guid_idea_memosdcltrs_osep07-10interpretationof34cfr300154.doc

Millions of children and teens are not insured even though they could qualify for health insurance. One study that compared children who were uninsured with children who were enrolled in Medicaid found that children enrolled in Medicaid were more likely to do better in school, miss fewer school days due to illness or injury, finish high school, graduate from college, and earn more as adults. 3 Cohodes, S. et al. (2014). The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansions. (No. w20178). National Bureau of Economic Research. Go to reference Another study found that, although access to health coverage for uninsured individuals has increased as a result of the Affordable Care Act, the number of children who are eligible for, but not enrolled in Medicaid remains high. In 2019, 2.3 million children were eligible for, but not enrolled in Medicaid or the Children’s Health Insurance Program (CHIP). 4 Haley, J. et al. (2021). Uninsurance Rose among Children and Parents in 2019. Urban Institute. https://www.urban.org/sites/default/files/publication/104547/uninsurance-rose-among-children-and-parents-in-2019.pdf Go to reference

What States Can Do

Schools can play a vital role in identifying students who are Medicaid-eligible and help boost attendance and academic performance by assisting students and their families in obtaining health insurance.

1. State and local education agencies can utilize school registration processes to identify eligible students and assist in enrolling eligible students in Medicaid or CHIP. States can utilize the Connecting Kids to Coverage National Campaign as well. State decision makers can also utilize additional resources such as InsureKidsNow.gov and the Center for Disease Control’s Fact Sheet: Health Insurance for Children: How Schools Can Help, available at cdc.gov.

All administrative expenses in support of these school-based services, including outreach, may be claimed as costs of administering the Medicaid state plan. As such, states can receive federal financial participation funds for outreach and enrollment assistance.

Children enrolled in Medicaid were more likely to do better in school, miss fewer school days due to illness or injury, finish high school, graduate from college, and earn more as adults.

Cohodes, S. et al. (2014). The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansions. (No. w20178). National Bureau of Economic Research.

What Affiliates Can Do

Encourage state decision makers to:

1. Create a standard process for identifying whether a student has health insurance, and updating school enrollment forms accordingly, at the beginning of the school year or upon enrollment.
2. Add questions regarding health insurance to the Federal School Lunch program enrollment form.
3. Take advantage of school events to provide students and their families with health care insurance information and to assist with enrollment.

• 3 Cohodes, S. et al. (2014). The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansions. (No. w20178). National Bureau of Economic Research.
• 4 Haley, J. et al. (2021). Uninsurance Rose among Children and Parents in 2019. Urban Institute. https://www.urban.org/sites/default/files/publication/104547/uninsurance-rose-among-children-and-parents-in-2019.pdf

Providers of Medicaid services in school settings must satisfy the same qualifications as providers in the community when performing and billing for Medicaid services. Therefore, if the state pays for services, then the Medicaid provider type should meet certification, registration, credentialing, education, training, and other state-specific requirements consistent with the rules of the benefit category. Attention must be paid to align the credentials before services are performed. As such, evaluate and develop a plan to comply with provider certification and qualification requirements.

What States Can Do

1. To bill Medicaid for a service, the state must include the provider and service within its plan and require that the provider possess all required state certifications and be in compliance with all state qualifications. Additionally, the state must require that providers of therapy services (such as physical therapy, occupational therapy, speech therapy, audiology, etc.) meet federal provider requirements defined within 42 CFR §440.110. 

What Affiliates Can Do

1. Meet with state decision makers to review provider qualifications for billing Medicaid, and which mental health services are currently covered under the state plan.
2. Enlist specialized instructional support personnel—from school nurses to speech pathologists—to provide perspective on additional supports needed for students. For example, school counselors can meet with decision makers to discuss the need and benefits of modifying the state plan to include school-based mental health services.
3. If additional qualifications are needed, consider working with plans in order to obtain any additional needed trainings. Plans might be able to seek funding for providing such services, allowing these training events to be held free of charge.

Improvements in technology have made telehealth an effective, convenient way to provide health care, but some states have been slow to expand telehealth services. Wait times for some providers, like child psychiatrists, have also decreased significantly in several states due to telehealth services, and students and parents did not have to miss school and work to travel to such providers. While telehealth has expanded access, it is important to note that telehealth in schools must not be used to undermine needed or existing in-person services or to count against required staff ratios. To the contrary, telehealth in schools must supplement, not supplant, in-person services.

For additional resources on telehealth for school-based services, the Centers for Medicare and Medicaid Services (CMS) has created an informational resource, the “State Medicaid and CHIP Telehealth Toolkit,” available at medicaid.gov. 5 State Medicaid & CHIP Telehealth Toolkit Policy Considerations for States Expanding Use of Telehealth COVID-19, https://www.medicaid.gov/medicaid/benefits/downloads/medicaid-chip-telehealth-toolkit.pdf Go to reference In addition, the Department of Health and Human Services (HHS) released a document entitled “Introduction To School-Based Telehealth," a best-practices guide that outlines how to build a school telehealth program, prepare students and guardians for school-based telehealth, bill for telehealth, and more. This and other resources—including information about recent policy changes that extended telehealth flexibilities and explain COVID Public Health Emergency waivers and flexibilities—can be found at telehealth.hhs.gov.

Improvements in technology have made telehealth an effective, convenient way to provide health care, but some states have been slow to expand telehealth services.

Resources for Medicaid Flexibilities and CMS Process for Reviewing Telehealth SPAs and data for Medicaid and CHIP services can be accessed at medicaid.gov. 6 Medicaid Telehealth Trends, https://www.medicaid.gov/resources-for-states/coronavirus-disease-2019-covid-19/medicaid-and-chip-resources/data-releases/index.html Go to reference To assist with the HIPAA concerns, HHS Office for Civil Rights released guidance to help health care providers and health plans bound by HIPAA Privacy, Security, and Breach Notification Rules (HIPAA Rules) understand how they can use remote communication technologies for audio-only telehealthTelehealth | Medicaid post-COVID Public Health Emergency (PHE). More information about the guidance is available on the Legal Considerations page at telehealth.hhs.gov and on the FAQs on Telehealth and HIPAA page at hhs.gov.

What Affiliates Can Do

1. To ensure that providers in school settings are allowed to bill Medicaid for telehealth services, state affiliates can meet with state decision makers to review the range of providers authorized under state law to bill Medicaid for telehealth services, and review which services the state allows to be delivered via telehealth services.
2. Work with state decision makers to request that the state expand telehealth services to include school-based mental health services.
3. If a state currently does not include providers in school settings and/or does not provide for a comprehensive range of services that may be billed via telehealth services, state affiliates can meet with state decision makers to request that the state expand providers allowed to bill for telehealth services, as well as the amount of services allowed via telehealth.
4. Raise concerns with state decision makers that telehealth in schools must not be used to undermine needed or existing in-person services or to count against required staff ratios.

• 5 State Medicaid & CHIP Telehealth Toolkit Policy Considerations for States Expanding Use of Telehealth COVID-19, https://www.medicaid.gov/medicaid/benefits/downloads/medicaid-chip-telehealth-toolkit.pdf
• 6 Medicaid Telehealth Trends, https://www.medicaid.gov/resources-for-states/coronavirus-disease-2019-covid-19/medicaid-and-chip-resources/data-releases/index.html

In order to expand school-based mental health services, the BSCA provides over $1 billion dollars in assistance. While the federal government has longstanding grant opportunities, the BSCA adds new programs and augments existing ones. Ensure that your state is maximizing these federal grant opportunities.

What Affiliates Can Do

1. Evaluate current school-based mental health programs and meet with decision makers to ensure they’re aware of additional funds available where they're eligible applicants. Affiliates involved in Community Schools can also consider these opportunities to fund health care and other wrap-around services.
2. Monitor federal agency grants on federal agency websites per the links provided herein and also review NEA’s list of school-based mental health services grant opportunities at nea.org.

Maximizing federal agency grants and expanding services will require strategic planning, staff, and the exploration of best practices. During this process, don’t hesitate to seek help. The BSCA provides one avenue of future assistance by requiring the Department of Education (DOE) to work with HHS to establish a technical assistance (TA) center and offer trainings around implementing the BSCA and school-based mental health services.

What Affiliates Can Do

1. Meet with SEAs and LEAs to develop a plan for technical assistance to be provided as needed and available.