A Program in Peril

The Centers for Medicare and Medicaid Services have proposed revised federal Guidelines for the Medicaid Administrative Claim Program, which in many ways are more restrictive than earlier proposals. The draft guidelines, if implemented by CMS, will have an extremely negative financial impact on schools serving students with disabilities.

Since February 2000, the Centers for Medicare and Medicaid Services has proposed the issuance of a Medicaid School-Based Administrative Claiming Guide intended to promote understanding about the requirements for submitting claims for administrative costs incurred by school districts in support of state Medicaid plans. The reaction to the proposed claiming guide, which was distributed for review in February 2000, and the numerous comments submitted from stakeholders from across the country were so strongly negative that CMS never formally issued it.

Since then, however, two developments have unfolded. First, CMS regional and national office staffs began to apply the principles of the February 2000 draft guidelines to state Medicaid administrative claims, even though the guidelines were never formally issued. Second, CMS has revised the draft guidelines, now stating that they will be in effect Jan. 3, 2003. Apparently the “proposed guidelines, which received universal negative response, are the guidelines. It is important to note they were released for comment after Thanksgiving, and closed for comment on Dec. 21, 2002. The fact that schools were on winter breaks, and that Congress was at intercession could NOT have been accidental.

CMS also has proposed that these guidelines would supercede any prior CMS approvals of administrative claims programs regardless of whether that approval was the result of a state plan amendment, approved cost allocation plan or any other formal approval. Therefore no state and no school district is immune to the impact of the revised guidelines. Furthermore, CMS has proposed that these provisions could be applied retroactively in all but the three states that do not have a formal, CMS-approved program for Medicaid administrative claims. Whether these states could have future claims even further reduced (or eliminated) to offset payments paid under old guidelines is not clear.

It is well past time to bring resolution to the issue of school-based Medicaid claiming and to create responsible policy that recognizes the vital role schools play in serving the health needs of disadvantaged children. Here’s what you can do:

1. Write your senators and congressional representative. Agencies should be upfront about their rulemaking and allow for appropriate input to which they should at least review and respond. Clearly they should not attempt to hide their intentions.

2. Make your case simply. Schools are required to comply with federal mandates without adequate funding.