Medicaid claiming guidelines discriminate against schools

1/14/03 - New proposed guidelines issued by the Centers of Medicare and Medicaid Services will make it much more difficult for schools to get reimbursed for their costs in helping poor and disabled children obtain access to Medicaid services.

"Overall, we are deeply disappointed with the proposed guidelines," wrote NSBA Associate Executive Director Michael A. Resnick in formal comments on the guidelines sent Dec. 20 to Richard Strauss, director of the Division of Financial Management at the Centers of Medicare and Medicaid Services.

The Medicaid School Based Administrative Claiming Guide discriminates against schools by repeatedly holding them to a different standard than other health agencies, Resnick says. "Schools would be required to adhere to additional accountability standards and meet differing thresholds for reimbursement than other public health agencies."

Federal law requires schools to carry out certain outreach activities - including identification and screening - to ensure that all poor and disabled children eligible for Medicaid receive access to the services they need.

School districts pay for these outreach activities out of pocket, then seek reimbursement from the Centers of Medicare and Medicaid Services. The process is so complex that many districts have hired private contractors to negotiate for reimbursement and some don't even apply for reimbursement at all.

NSBA is concerned that the guidelines contain new policies that "appear to be in conflict with statutes and conflict with state Medicaid plans and practices," Resnick writes.

"More important," the letter states, "these changes seem contrary to the intention and goals of Medicaid, which is to help poor and disabled children receive the vital services they need to achieve and succeed. The changes proposed in the guide will have a chilling effect on schools and their ability to help the neediest of populations."

Finally, the Centers of Medicare and Medicaid Services fail to provide enough time for public comment on the guidelines, allowing only 19 working days for the comment process and only four days for review. And even though the guidelines are not supposed to be final, some provisions took effect Jan. 1, 2003.

NSBA will work with Congress and will pursue legislation and, if necessary, litigation, to ensure that the guidelines do not discriminate against schools, says Dan Fuller, director of federal programs.

Following are some of NSBA's major concerns:

• The guidelines would disallow reimbursement for administrative activities related to the identification of children eligible for services under the Individuals with Disabilities Education Act and the development of medically related components on individualized education plans.

• The guidelines propose to disallow reimbursement for activities that support services to children that schools provide free of charge.

This provision will completely eliminate reimbursement for 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.

• The proposed guidelines prohibit "skilled professional medical personnel" in schools from being reimbursed for performing administrative activities that could not be performed by someone without these qualifications.

• Another new policy, which also would discriminate against schools, would require schools to enroll as fee-for-service providers or no longer be allowed to carry out Medicaid administrative claiming activities.

• Schools would be required to research and calculate one or more provider participation rates, resulting in reduced claims for reimbursement.

• The new guidelines establish a clear preference for only one methodology for time accountability - random moment sampling - which requires participants to document activities at random times throughout the quarter.

• The new guidelines only permit the use of indirect cost rates approved by the agency responsible for approving such rates. The use of a restricted rate will significantly reduce the current reimbursement for schools and is inconsistent with the indirect cost rate allowed for other public agencies.