CMS Proposed Rule on Reimbursements

For a number of years, the Center for Medicare and Medicaid Services (CMS) has been responsible for federal reimbursements for IDEA related school-based administrative outreach and transportation costs. The administration has worked towards ending this practice for the last few years. Every year, CMS discusses proposing new regulations that would prohibit payments for education-related costs, but public support for the program has stalled the effort each year. This year, however, CMS is taking a more proactive approach, having submitted a proposed rule (CMS-2287-P) to the Office of Management and Budget (OMB) for review, taking a big first step towards eventual acceptance.

The Medicaid Administrative Claiming (MAC) program provides partial reimbursement to schools for health related services provided by professionals during the school day to children with disabilities. The program, developed by a state’s Medicaid agency, must be approved by CMS. Schools rely on these reimbursements for a variety of purposes such as outfitting buses with specialized equipment, transporting children to school for their medical appointments, identifying students who need screenings and evaluations, and connecting children and their families with other needed services in their community.

Despite the fact that CMS is run by the Department of Health and Human Services (HHS), MAC has provided funds for education-related expenses. The Office of the Inspector General of HHS included elimination of the program in its Redbook, which is a roadmap for their actions in the year ahead. For the last few months, CMS has stated that it will issue regulatory changes that would eliminate reimbursement to schools for the costs of administrative activities and for transportation of students under the MAC program. CMS argues that this is necessary because of fraud and abuse in the program. The education community, which stands to lose an estimated one billion dollars annually in reimbursements, argues that CMS is disregarding recently implemented changes that address these concerns.

OMB has 90 days to review the proposed rule before ruling on its validity. CMS submitted the proposal on August 13th, leaving many concerned parties in a worried state of limbo until the end of the year. Advocates for the program, such as the National School Boards Association, have already voiced their concerns to CMS, the White House, and Congress. Senator Edward Kennedy (D-MA) already attempted to pass an amendment to the State Children’s health insurance program authorization that would prohibit any such rule for one year while Congress works on a way to rectify the situation, but the effort stalled on the Senate floor. Unless Sen. Kennedy can convince conferees on the SCHIP bill to insert the language, school districts may face a problem when OMB issues its decision on the proposed rule.

Author: DAD, SAS