New Medicaid guidance for school-based services, new opportunities

When President Biden signed the Bipartisan Safer Communities Act (Safer Communities) into law, AOTA and our partners in the Medicaid in schools community were cautiously optimistic, but hopeful, that it would bring about an increase in funding for school-based services (SBS). This week, as directed by Safer Communities, new guidance on Medicaid in School-Based Settings from the Centers for Medicare & Medicaid Services (CMS) and the Department of Education (ED) was released to clarify what is allowable under federal law.

In order to take full advantage of the many opportunities highlighted by this guidance, there is a need for a great deal of advocacy and education at every level of government. The success of any public policy initiative is dependent on not only its design, but its implementation through guidance like this. Ultimately, this guidance went far beyond AOTA’s cautious optimism, and will provide more resources and innovations to allow schools to improve the quality of services and expand access to them for students. There’s a lot of work ahead, but for now enjoy a high-level look at what’s great, what’s good, and what’s only OK in the new Medicaid SBS guidance.

The great

Prior to 2014, Local Education Agencies (LEAs) could not bill Medicaid for any school-based health service unless it was included on a student’s individualized education program (IEP), as allowed by the Individuals with Disabilities Education Act (IDEA). CMS stated that if a school provided a service to all students, it couldn’t bill those who were Medicaid beneficiaries and provide it free of charge to others.

In 2014, CMS reversed this policy, and began allowing states to amend their Medicaid plans to be reimbursed for school-based services provided to students without IEPs. This meant that any state could allow its LEAs to bill for any service that would otherwise be eligible for reimbursement by Medicaid. Now, the new guidance provides states with the first explicit instructions from CMS regarding which services are eligible for Medicaid reimbursement.

It also includes blueprints for several different reimbursement models, in order to give the states the ability to improve their Medicaid program in a way to best fit their schools. These blueprints, along with $50 million in federal aid and a soon-to-be-formed technical assistance center, will give states the knowledge and support needed to maximize their reimbursement for school-based services.

The good

Under existing law, all Medicaid beneficiaries under 21 are required to have access to a comprehensive array of services called the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit. While states are not required to provide occupational therapy services through Medicaid to adults, occupational therapy is a required benefit for all Medicaid beneficiaries age 0–21, under EPSDT. EPSDT was created to ensure children receive early assessment and care, so developmental concerns are detected and treated as early as possible.

Through this guidance, CMS and ED state that schools can and should offer a greater amount of EPSDT services to all students in the school. The Safer Communities Act required the Department of Health and Human Services (HHS) to review each state’s implementation of EPSDT services under Medicaid by June of 2024, and then every 5 years going forward. Additionally, HHS will issue guidance to states on both the requirements for EPSDT services, and best practices for ensuring that children have access to comprehensive health services across all settings, not only school-based ones.

The only OK

The guidance provides an outline to help increase access and funding for SBS, explicitly detailing options open to states. However, two of the biggest opportunities specific to occupational therapy (OT) received little or no reference.

AOTA advocated for occupational therapy practitioners to be on any list of recommended mental health providers, as was rumored to be in the guidance. Ultimately, no such list was included, a specific choice by CMS to ensure ultimate flexibility for states. Several references in the guidance urge state Medicaid agencies to explore reimbursement for any service in the scope of practice of an SBS provider. The OT practice act of every state includes a mental health or psychosocial reference of some kind, meaning the only thing that stands between OT practitioners providing Medicaid-reimbursable mental health services for students is educating policy makers.

Another issue on which AOTA has advocated is the ability to provide direct services to “504 students.” These students have a disability, but they do not qualify for services under the IDEA. These students have the right to access a free and appropriate education (FAPE) under Section 504 of the Rehabilitation Act of 1973. The guidance does specify Medicaid’s role in paying for these services and does imply that students have the right to receive direct services if warranted; however, the language could be confusing to local school leaders. With new regulations being developed by the Department of Education regarding Section 504, AOTA will continue to monitor and advocate for direct services to be eligible for reimbursement.

Conclusion

Currently, Medicaid provides anywhere from $4billion to $5 billion a year to public education, making it the third-largest single source of education funding. If states fully implement the changes recommended in this guidance, it is estimated to increase Medicaid SBS funding to $15 billion to $18 billion a year. Implemented correctly, the new reimbursement models could incentivize hiring additional SBS providers, like OT practitioners. If state Medicaid agencies learn about the value of OT within the EPSDT benefit, there’s a chance that OT practitioners will be a value to a school district’s bottom line, not just a value to a student’s well-being. Everything in this guidance requires proper implementation, education, and the need to advocate for the role and value of OT. The next 18 – 24 months could see more growth in this area than during any other time, so please stay up to date on our advocacy efforts by visiting www.aota.org/advocacy, or by emailing ASKFAD@AOTA.org with any questions.