Government aims to streamline Medicaid billing for students with disabilities, expand health care services in schools


The US Department of Education, US Department of Health and Human Services, and the Biden-Harris Administration look to increase access to school-based health services, including mental health services, amid the national crisis. 

Government aims to streamline Medicaid billing for students with disabilities, expand health care services in schools | Image Credit: © - © -

Government aims to streamline Medicaid billing for students with disabilities, expand health care services in schools | Image Credit: © - © -

The Biden-Harris Administration, US Department of Education (ED), and US Department of Health and Human Services (HHS) are looking to make it easier for schools across the nation to provide critical health care services to students, the agencies recently announced.

A new rule is being proposed by ED that would streamline Medicaid billing permissions for students with disabilities, making it easier for schools to bill Medicaid. ED predicts of the 500,000 new students who are found eligible under the Individuals with Disabilities Education Act (IDEA) Part B each year, approximately 300,000 are likely to be eligible for Medicaid. ED is releasing a Notice of Proposed Rulemaking under IDEA, which would streamline consent provisions when billing for Medicaid services that are provided through a student’s individualized education program (IEP), resulting in a uniform process for all Medicaid enrolled children, regardless of disability.

“This new rule will help school districts have the resources to expand the behavioral health services to students in their district and be able to be appropriately reimbursed for those services,” said Nathaniel Beers, MD, MPA, FAAP, executive vice president, Community and Population Health, Children’s National Hospital, Washington, DC. “It will result in fewer missed services for children with disabilities which should lead to more instruction due to fewer missed days because of behavioral issues.”

According to the announcement from HHS, many children with disabilities that receive services under IDEA are enrolled in Medicaid based on family income or because of disability status. Children with disabilities are more likely to have low income and are more likely to have greater health care needs compared to those that are on private insurance, HHS states.The proposed rule changes do not alter any of the critical parental consent provisions required by IDEA, nor do they impact parental consent obligations under the Family Educational Records and Privacy Act (FERPA).

“There are substantial gaps in care for behavioral health services,” Beers said. “Individuals with Medicaid struggle even more than those with employer-sponsored insurance in many regions. It leads to loss of school days, increased ER utilization and increases in hospitalizations. Having increased services available in schools can help address issues earlier and lead to fewer complications in care.”

HHS and the Centers for Medicare & Medicaid Services (CMS) has released a guide for school-based Medicaid services, making it easier for schools to deliver and receive payment for health care services provided to millions of eligible students, according to HHS. The guide outlines flexibilities that states can adopt to allow schools to get paid for health services delivered to children enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). These programs collectively provide health coverage to more than half of all children in the United States.

According to HHS, the comprehensive guide clarifies, consolidates, and expands on CMS guidance for how schools can receive payment for providing care to Medicaid and CHIP students. It offers clarification on ways to “ease the administrative burden on school-based health providers to promote their participation in Medicaid and CHIP while meeting federal statutory and regulatory requirements,” according to the HHS announcement. In the coming months, CMS plans to release more resources to ensure that states help optimize children’s access to school-based services. Resources include $50 million in grant opportunities and a school-based services technical assistance center, partnered with ED.

HHS, through CMS, has approved state plan amendments (SPAs) for New Mexico and Oregon, allowing the states to pay for school-based health care services to more of their Medicaid-enrolled students. The two states will now receive Medicaid funding for services provided to all children covered by Medicaid, instead of only providing services to students with an IEP. Arizona, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, Michigan, Nevada, and North Carolina have already adopted expanded Medicaid payment for school-based health care services.

According to HHS, these announcements are part of the Biden-Harris Administration’s plans to combat the youth mental health crisis by increasing school-based services. Recently, the Mental Health Service Professionals demonstration program provided nearly $100 million in awards, part of an overall appropriation of $1 billion in the Bipartisan Safer Communities Act (BSCA), for school-based mental health services.

“In order to provide services for more children, schools will need to increase the behavioral health staff and ensure they are well connected with pediatricians and other health professionals caring for the children,” said Beers.

HHS states compared to the pre-pandemic period, the number of school social workers is up 48%, school nurses are up 42%, and the number of school counselors and psychologists are up 10% each.


Biden-Harris Administration takes action to help schools deliver critical health care services to millions of students. May 18, 2023. Accessed May 24, 2023.

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