Medicaid claiming: a consortium model in Texas eases school-based reimbursement claims for serving students with disabilities

School Administrator, March, 2003 by John E. Sawyer

Every school administrator's Rubik's Cube is figuring out how to provide increasingly broad services (both educational and noneducational) to a more diverse population with the same or fewer dollars.

Such a puzzle is embedded in every administrative job description even though it is seldom stated directly. It may be worded in more politically appropriate terminology, such as the "efficient use of resources." Superintendents and school business officials spend countless hours twisting the brightly colored building blocks of the organization to find the correct pattern for student success within the confines of available resources.

Is it any wonder then that funding for any array of programs or services would be a welcomed relief from the normal scenario of a lack of money? Some years ago, as an assistant superintendent for business, I literally stumbled across a new (to me, at least) concept while scanning one of the professional magazines stacked atop my desk. The article described a program that allowed school districts to access Medicaid funds as partial reimbursement for medically related services that were provided to Medicaid-eligible children, who also were identified for special education services and who had specific eligible services written into their individualized educational plans.

"Aha," I thought. "That's nice, but such a small population is probably not worth the effort." Luckily, I discovered I was wrong. Cutting to the chase (and it was a chase that included a wild political ride, some interesting revelations, a lot of bureaucracy and a determination to "see this thing through!"), my school district at the time, Fort Worth, Texas, received almost $1 million for its retroactive claim for direct services and a similar, ongoing revenue stream to help support and extend much needed and costly services to eligible kids. In Texas, this program is known as School Health and Related Services or SHARS.

Once the revenue stream was finally established as an expected part of the annual revenue stream, my direct contact with Medicaid claiming initiatives was ended. Today most districts have acquired "providers," who for a fee help them realize these reimbursement dollars. However, many districts did not participate because the tracking of individual students and their Medicaid eligibility demands considerable staff time even when claims are coordinated by a third party. Most of the smallest districts found the effort involved in tracking students offset the financial advantages.

Various Services

When I became superintendent of the 7,000-student La Porte, Texas, Independent School District, it already was participating in the direct reimbursement portion of the Medicaid, also known as SHARS, by coordinating a small claim through a third-party vendor. The claim grossed about $20,000. After deducting staff time, the district netted about $10,000.

Soon after my arrival in La Porte, the same consultants I had hired in Fort Worth to provide the needed technical expertise and support helped me to create and operate SHARS. A second Medicaid program, Medicaid Administrative Claiming or MAC, was described as having been approved for trial by the federal agency. MAC could provide reimbursement to local schools for administrative costs and outreach activities in support of a state's defined Medicaid program and was doing so in a few other states.

While reimbursable activities vary by state rule, they could include the following outreach services for Medicaid programs:

* Facilitating applications for Medicaid;

* Planning and coordinating care for medical and mental health services;

* Early and periodic screening, diagnosis and treatment training;

* Coordination with the state's Medicaid agency and medical providers;

* Health-related program planning, development and monitoring; and

* Transportation or translation assistance to access Medicaid services.

Under these broad descriptions are a variety of services school districts provide to students. Because screenings and other services may lead to Medicaid assistance, at the time they are initiated district personnel could not know which students are or will be Medicaid eligible. Therefore, the appropriate distribution of time spent performing eligible administrative and outreach activities, among many other duties, could be determined by a methodology called a time study, which then is related to a school district's expenditure and Medicaid eligibility. Such a methodology already had been approved by federal agencies.

A time-study-method participant distinguishes between "allowable" and "nonallowable" (for reimbursement purposes) administrative outreach activities to derive their costs. Districts that are eligible under state regulations have their time study participants track work-related time using a series of state-designated codes. Each code is assigned an appropriate level of federal funding participation for the corresponding activity. Codes cover time spent providing direct health services that are eligible for reimbursement under the SHARS program, but not under the MAC program. No double dipping is permitted. Educational services and social-related activities are not allowable costs.