June 19, 2017

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What States receive the most money for school-based Medicaid?

By Sasha Pudelski

The GOP health care proposal to change Medicaid from an entitlement program to a block grant could mean that school districts are cut off from receiving Medicaid reimbursement permanently. With a significant shortage of federal funding to support Medicaid, districts will be in the unenviable position of competing with hospitals, doctors and other providers for limited reimbursement from states. While districts receive less than 1% of the federal Medicaid allocation, that money represents the third largest federal funding stream in education.  

Here are the states that will lose the most most school-based Medicaid funding: 

#1 by a wide margin is Texas. Districts in Texas receive about $444 million dollars annually from the Medicaid program (250 million of which comes from the feds).

#2 is my home-state of NJ which captures about $286.6 million annually. Yeah Jersey!

Coming in right behind NJ is IL, which is #3. IL school districts receive $286.4 million annually.

#4 is New York with $273.6 million in school-based Medicaid reimbursements.

PA is #5 with $253.3 million heading back to school districts. As a state with one of the most expensive special education budgets in the country, I’m sure PA districts are eager to have this funding to support their students.

#6 is Michigan. Michigan school leaders have relied on Medicaid billing for health and special ed services or decades and its billing rate for school-based Medicaid ($250.2 million) is therefore not surprising.

#7 is Wisconsin, with $187.7 million, which IS surprising. Given it’s not a super populous state, the billing rate for school-based Medicaid is considerably high.  Of note is that the feds contribute a sizeable amount, $107 mil, each year.

#8 is California with $180.3 million each year. You would think they would be higher, huh?

#9 is Massachusetts with $147 million split evenly between the states and the feds.

And last, but not least is North Carolina with 142 million where the feds pitch in about $87.2 million annually.

Please note that all these numbers are from a CMS doc that looks at FY15 numbers. Capturing the school-based Medicaid dollars uniformly is not easy (and my guess is that this is a pretty good underestimation) since states can authorize billing for certain things (and deny billing for others) and districts aren’t always aware of all the money they can be pulling down. As school leaders know, the decision to invest in the infrastructure, training/PD and technology to bill Medicaid is expensive and difficult and districts won't do it unless it makes a lot of financial sense. We don’t know exactly what districts in each state bill (the state departments may be able to help with that info) but if you want a quick list of Medicaid eligibility by school district click here. If only the conversation in D.C. was about how to make sure every district with high proportions of Medicaid eligible kids was billing, so they could maximize services for kids with disabilities and kids in poverty. Unfortunately, it’s not.