8/3/04 - NSBA expects to file a lawsuit within the next few weeks to challenge regulations issued last year that would slash the amount of money school districts can claim for services provided to Medicaid-eligible children.
U.S. school districts are eligible for roughly $2 billion a year on these services, NSBA estimates, but not all school districts seek reimbursement.
Federal law allows school districts to seek reimbursement for health services provided to children covered by the Individuals with Disabilities Education Act (IDEA).
But the regulations on Medicaid claiming, issued by the Centers of Medicare and Medicaid Services (CMS), a division of the U.S. Department of Health and Human Services, deny reimbursement for certain medical services provided to special education children.
The American Association of School Administrators, the Council of Great City Schools, and about 10 school districts are expected to join NSBA in the lawsuit, which will be filed by the Covington and Burling law firm of Washington, D.C.
The Alabama Association of School Districts has worked with NSBA over the past year to support the lawsuit, says Executive Director Sandra Sims-deGraffenried, as well as the state school boards associations of California, Florida, North Carolina, Iowa, Texas, and a number of local school districts.
Alabama school districts have seen a "significant reduction" in reimbursements, says Sims-deGraffenried. Overall, Alabama districts used to receive $6 million annually in Medicaid reimbursements, she says, and the new rules reduce that amount by 80 percent.
The Mobile, Ala., school board passed a resolution in July allowing the district to become a lead plaintiff in the lawsuit.
The Mobile school district received about $800,000 in Medicaid reimbursements last year, but only expects to receive $340,000 this year, says Superintendent Harold Dodge.
Most of this money is for physical therapists, occupational therapists, and related professionals, Dodge says.
School districts can't cut back on services to students with disabilities because they are mandated by IDEA. As a result, the district has had to shift money from other areas, such as textbooks and teachers, and has had to increase class sizes, he says.
Federal law requires schools to carry out certain outreach activities - including identification and screening - to ensure that all children eligible for Medicaid receive the services for which they are entitled.
Districts pay for these activities out of pocket, then seek reimbursement from CMS.
The process for obtaining reimbursement has always been complex, but the CMS Medicaid School Based Administrative Claiming Guide makes it even more difficult for school districts to receive reimbursements.
The guidelines also appear to conflict with federal law and state Medicaid policies and with the intent of the Medicaid program, which is to ensure that poor and disabled children receive the services they need.
Since CMS began considering the new claiming rules, the agency has been unresponsive to school district concerns. As a result, NSBA has been exploring the possibility of a lawsuit.
One of the main issues is the refusal by CMS to reimburse schools for developing individual education programs (IEPs) and determining what services Medicaid-eligible children need.
The guidelines also would:
• disallow reimbursement for activities that support services to children that schools provide free of charge, such as referral, follow-up, and coordination activities related to such direct services as vision and hearing screenings for students who are not enrolled in special education;
• prohibit "skilled professional medical personnel" in schools from being reimbursed for performing certain administrative activities;
• require schools to enroll as fee-for-service providers if they want to continue to carry out Medicaid administrative claiming activities; and
• require schools to research and calculate one or more provider participation rates, resulting in reduced claims for reimbursement.