[NYAPRS Enews] W Post: Schools Set To Lose Millions Under Medicaid Policy Changes

[Harvey Rosenthal]

Area Schools Set To Lose Millions Under Medicaid Policy Changes

By Maria Glod   Washington Post   February 3, 2008

 

Educators nationwide are protesting a Bush administration move to
curtail hundreds of millions of dollars in Medicaid funding for disabled
students that could force some schools already in budget straits to trim
health services or cut back instructional programs.

 

The shift in federal reimbursement policy threatens to strip about $635
million from schools in the next academic year and $3.6 billion over
five years, with Washington area schools in line to lose millions of
dollars. The rule, to take effect in June unless Congress intervenes,
will bar schools from billing Medicaid for busing special education
students to and from school and for certain administrative expenses,
including enrolling children in Medicaid and coordinating and scheduling
services.

 

Administration officials said schools, required under federal law to
provide education to children with special needs, should pick up the
bill for expenses that are part of their "educational mission." But
educators said it would further strain schools in a time of lean
budgets, hitting big city and poor rural systems hardest.

 

D.C. schools would lose about $5 million in the first year in busing
reimbursement, according to a spokeswoman for Mayor Adrian M. Fenty (D).
Virginia has recouped $31 million in Medicaid dollars over the past five
years for services that would no longer be covered, with Fairfax County
schools alone projecting a $1.8 million loss next year. That's the
equivalent of employing 25 teachers. The county's schools this year face
a range of budget cuts that would pare back summer school and raise
average class size.

 

Maryland school officials estimate that nearly $1 million in federal
funding would dry up statewide next year under the rule, with the
greatest impact in Baltimore, which recouped about $593,000 in one
recent year, and Prince George's County, which was reimbursed $106,000.

 

Educators in states including California, Mississippi and North Carolina
wrote the government to protest the rule. Officials of some schools said
absorbing such expenses could mean dipping into general education
programs or cutting back on school nurses or counselors. In one letter,
Virginia state Superintendent Billy K. Cannaday Jr. said school systems
will continue to help enroll children in Medicaid and coordinate
services but will have to "shift funds from other areas in their budgets
to cover the costs or raise taxes if this proposal becomes a reality."

 

The Centers for Medicare and Medicaid Services proposed the rule in
September, and it was made final in December. But congressional
Democrats slipped a six-month moratorium into legislation passed before
the end of the year.

 

Dennis G. Smith, director of the federal Center for Medicaid and State
Operations, said the change will help reign in a system in which federal
auditors have found improper billing in some states. He emphasized that
schools will still be reimbursed for direct medical services, such as
physical or speech therapy, as well as for transporting children to a
doctor's office or therapy session if it is scheduled off campus during
the school day.

 

"This is not about medically necessary services," Smith said. "We will
continue to pay for those types of services. Medicaid was being used
simply to leverage revenues for activities that had very little to do
with serving children on Medicaid. Schools already have responsibility
to transport all children, not just Medicaid children, to school. That
should not be billed to Medicaid."

 

Health advocates and Democratic lawmakers criticized the change as a
rash shift that ultimately could result in fewer needy children
connecting with health services.

 

"This is a huge change in law," said Sara Rosenbaum, chairman of the
Department of Health Policy at the George Washington University School
of Public Health and Health Services. "This could have an impact on the
number of children enrolled in the program and the number of children
who are assisted in getting health care. Whatever concerns there were
about schools administering Medicaid . . . are totally outweighed by
what [the administration] has done here."

 

Rep. John D. Dingell (Mich.), the senior Democrat in the House, called
on the administration to "reconsider this misguided rule and start
working with Congress to better serve and support America's most
vulnerable children." Dingell and other lawmakers have introduced a bill
to reverse the rule, requiring Medicaid to cover certain administrative
costs for schools and the cost of transporting children with
disabilities who go to school in specially equipped or staffed buses.

 

P.J. Maddox, chairman of the Department of Health Administration and
Policy at George Mason University, said the conflict highlights the
challenge schools face with the growing cost of educating children with
disabilities. Federal law requires schools to provide services to
disabled students, but the federal government gives schools only a
portion of the money needed to cover extra costs. Schools, she said,
have turned to Medicaid to help offset expenses.

 

"This Medicaid change cuts off that help, which leaves the school system
holding the bag," Maddox said. "Who pays for it? The school system will
have to pay for it."

 

Medicaid officials contended, in their written response to public
comments on the rule, that cash-strapped schools have a "strong
incentive to shift costs to Medicaid for activities that would have been
performed by schools in the normal course of their operation" and that
schools should find other sources for money. In recent years, reports
from the inspector general of the Department of Health and Human
Services have found that schools inappropriately sought reimbursement
for school administrators' salaries, capital costs and even such items
as antacids and lice combs.

 

Educators acknowledged some problems with billing but said Medicaid
should tighten rules and offer more guidance, not simply cut off the
dollars.

 

Maryland officials are concerned about the fallout for Baltimore and
Prince George's schools.

 

"It's a lot of impact on the two jurisdictions that have the largest
numbers of the neediest children," said Carol Ann Baglin, an assistant
state superintendent in Maryland. "They are going to have to take funds
from somewhere else in a very tight fiscal time and put them into
transportation."

 

Late last month, Los Angeles school officials went to Capitol Hill to
lobby against the rule, saying their school system, the nation's second
largest, could lose $10 million a year in reimbursement. John DiCecco,
director of the system's community partners and Medi-Cal programs, said
he expects to lay off 10 outreach workers who have helped enroll
thousands of children in Medicaid.

 

DiCecco said the system also uses Medicaid funds to encourage nonprofit
and community groups to donate to help the schools run health clinics
and offer vision and dental screenings.

 

"There's no question if this goes away, at least in Los Angeles, the
health status of children will directly suffer," DiCecco said.

 

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