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Medicaid Eligibility for Transportation Services for Students with Disabilities

This article introduces technical information about the relationship between Medicaid Eligibility and Billing for Transportation Services. It is presented in a question answer format.

What is Medicaid?

  • “Medicaid is a jointly-funded, Federal-State health insurance program for certain low-income and needy people. It covers approximately 36 million individuals including children, the aged, blind, and/or disabled, and people who are eligible to receive federally assisted income maintenance payments.”
  • “Medicaid is a health insurance program for certain low-income people. It is funded and administered through a state-federal partnership. Although there are broad federal requirements for Medicaid, states have a wide degree of flexibility to design their program.

States have authority to:

Establish eligibility standards;
Setermine what benefits and services to cover;
Aet payment rates.

  • “Federal Medicaid requirements are complex and the implementation of Medicaid varies by state”.

What is HCFA?

  • HCFA is: “The Health Care Financing Administration (HCFA) is a federal agency within the U.S. Department of Health and Human Services. HCFA runs the Medicare and Medicaid programs – two national health care programs that benefit about 75 million Americans. And with the Health Resources and Services Administration, HCFA runs the Children’s Health Insurance Program, a program that is expected to cover many of the approximately 10 million uninsured children in the United States.”
  • “HCFA agency staff working in the Baltimore, Maryland headquarters and in 10 regional offices nationwide oversee HCFA programs. The headquarters staff is responsible for national program direction. The regional office staff provide HCFA with the local presence necessary for quality customer service and oversight.”

What role does HCFA play in Medicaid eligibility for Students with Disabilities?

  • Medicaid is the payer of first resort for medical services provided to children with disabilities pursuant to the Individuals with Disabilities Education Act (IDEA). The IDEA regulation section 300.142 addresses methods of ensuring services, which includes IDEA.

What is the relationship between billing Medicaid and the provision of the Related Service transportation under the Individuals with Disabilities Education (IDEA) Act Amendments of “1997” and Regulations?

When a student has transportation as a related service on his/her individualized education program (IEP) and needs specialized transportation service to access a medically necessary service that is received in school on a specific day Medicaid will pay for transportation for individuals enrolled in the Medicaid program. The rate of payment approved is a State and federal matter.

When is it recommended that a Local Education Agency can bill Medicaid for Transportation Services for a Student with a Disability?

  • When the student has both a Medicaid-covered service and specialized transportation on his/her IEP.
  • On the days the student receives a Medicaid-covered services and transportation is provided (self-operated or contracted).

What is the best practice for monitoring and defending bill ing practices?

  • Maintain a tracking system to access documentation of delivery of Medicaid-covered services and transportation. Assure that documentation is maintained for six (6) years, including the IEP.
  • Document the student’s presence (ridership) on the bus to and from school on the days eligible services are provided.

Why are Medicaid dollars an important source of revenue for State and Local Education Agencies (LEAs)?

These dollars provide the opportunity to offset the cost of transportation for students whose costs are expensive. These dollars in turn can be used to purchase specialized equipment and support additional services to facilitate safe transportation.

What steps should a State take to receive Medicaid reimbursement for transportation services?

The State Education Agency (SEA) or the LEA needs to work with the State Medicaid Agency to develop a process to include transportation services for children with disabilities in its State Medicaid Plan. In some States, the LEA works with the State Medicaid agency to develop a process.

The decision to bill Medicaid for transportation services for eligible students with disabilities should be a collaborative interagency decision. Billing practices vary from State to State based upon each States approved Medicaid Plan. One thing is for sure, no untapped funding source should go unnoticed.

Linda Bluth is the chief of the Community and Interagency Services Branch at the Maryland State Department of Education. She is a regular contributor to STN and can be reached 410/767-0264 or by e-mail at Lbluth@aol.com.


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