CMS Posts Proposed Rule on Medicaid Reimbursements

The Center for Medicare & Medicaid Services (CMS) posted a proposed rule in today's Federal Register to eliminate reimbursement for certain school-related costs under Medicaid. CMS has attempted to institute this rule since 1988, but has never met with success, due to both public and Congressional rejection of the proposal. The proposed rule would establish a Secretarial finding that school-based administrative activities are not necessary for the proper and efficient administration of the State plan. Moreover, this proposed rule would establish a finding that transportation from to and from school for school-age children is neither necessary for the proper and efficient administration of the State plan, nor within the scope of the optional medical transportation benefit. Based on these findings, the proposed rule would specify that federal financial participation under the Medicaid program will not be available for school-based administrative and certain transportation costs unless conducted by employees of the State or local Medicaid agency. CMS has opened up for public comments on the proposed rule. Comments on the proposed rule must be received no later than 5:00 p.m. on November 6, 2007.

Because of the agency's long history of opposition to this program, it is unlikely that comments in opposition will have any serious impact on the decision to eliminate the program. Therefore, the best hope is for Congressional intervention. Sen. Edward Kennedy (D-MA), chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee attempted to add a provision to the Senate's bill expanding the State Children's Health insurance Program (SCHIP) that would have placed a one year restriction on regulatory efforts to eliminate the program, allowing Congress enough time to work on a more permanent solution. The provision did not make it into the bill, but there is still a possibility that the conference report for the SCHIP expansion may contain such language. Otherwise, there are other vehicles, such as appropriations bills, that can carry the provision. However, this relies heavily on Congress's ability to move quickly on the issue, and that is not likely to occur.

To view the Federal Register listing, go to:
http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/07-4356.pdf.

Author: SAS