The Long and Winding Road To Federal Funding

March 15, 2022

Next month, the U.S. Environmental Protection Agency is expected to open its new rebate program for zero- and low-emissions school buses. Much ink has been dedicated to this unprecedented boon in federal funding of student transportation. But did you know that millions of dollars exist each year that largely go untapped?

I refer to Medicaid reimbursement for eligible student transportation services. The apparent lack of interest shown by school districts in pursuing these funds has long perplexed me. I’ve placed related sessions on the agenda at the TSD Conference held in Frisco, Texas, but was shocked at the apathetic response by attendees. How could that be, especially when this industry often decries the lack of federal funding assistance?

I learned that school districts can apply for these funds to help pay for transporting students who have Individualized Education Programs or Individual Family Service Plans that require certain additional audiology, speech-language, behavioral or health-related services from a qualified provider during the school day. I assumed any school district that transports students with disabilities to these eligible, approved services would be eager to apply. I was wrong.

As we know all too well, how school transportation requirements are applied can vary from state to state. Don’t even get me started on data collection. The peculiarities can extend to Medicaid federal and state health insurance programs that for school districts help cover the cost of providing certified and medically necessary health services—even some required under the Individuals with Disabilities Act—to certain students with IEPs/IFSPs. Each state must have a plan in place for how it administers its Medicaid program and the steps that school districts must take to apply for and receive reimbursement, that stands the test of audits. According to the U.S. Justice Department, $5 billion of the $5.6 billion in False Claims Act settlements reached last year related to Medicaid Part C fraud, the second-largest total since Congress passed the law in 1986.

School districts can be excused for being anxious about the hoops it must jump through, including accurate student counts and ensuring services are certified by a local health department, for example. As the American Speech-Hearing Association writes on its website: “The issue of Medicaid billing is especially problematic because schools are not well acquainted with operating as medical service providers or the specific Medicaid requirements associated with seeking reimbursement for Medicaid-covered services. Additionally, the requirements that Medicaid does not reimburse for free care and that payment must be sought from any liable third party are two separate principles for Medicaid billing that are distinct and often confused.”

Art Gissendaner reports this month that often districts throw up their hands in defeat. Some school districts don’t (or think they don’t) provide related services that meet the Medicaid requirements. Others find the reimbursement is not enough to warrant the hassle, especially if few students are impacted.

Similarly, according to this month’s survey of readers, nearly 65 percent of transportation directors don’t know if their school district has remaining Elementary and Secondary School Emergency Relief (ESSER) funds to spend. At the same time, 26 percent said the funds are not applicable or are unavailable to transportation.

Transportation leaders were overheard at our conferences last fall commenting that their departments have so far been shut out of the federal funding bonanza. Here we go again. Some school administrations or school boards are misunderstanding the link between a child’s education and safely getting them to school prepared to learn.

While classroom education certainly is receiving the lion’s share of some $310 billion in ESSER funds, transportation in some place can use the money to navigate the pandemic, which is quickly entering an endemic stage. Thankfully, Taylor Hannon found several school districts that are using the funds to help pay for staff retention bonuses. (And as we’ve reported on prior, transportation departments may also use this money for school bus cleaning regimens and on-board air purifications systems as well—again, depending on how their state or local school district approves the funds to be used.)

The time is now to take advantage of the most money available for student transportation than ever before. But Clean School Bus and ESSER funds as well as Medicaid reimbursement both require due diligence and utilizing a network of public and private partners in the process. Leverage the tools available.

There is no such thing as free money.

Editor’s Note: As reprinted in the March 2022 issue of School Transportation News