Medicaid Funding for Mental Health Services in Schools

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As schools across the country reckon with the ending of the American Rescue Plan (ARP) funds, many, if not all, are trying to find ways to sustain the services these funds supported. For most schools, that means finding some sustainable method of funding mental and behavioral health services. Fortunately, an expanding and increasingly well-known pathway through school-based Medicaid exists. Outside of the Individuals with Disabilities Education Act (IDEA), school-based Medicaid is the single largest source of sustainable funding for health services in schools.

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Welcome to the All4Ed Flash, where we are cutting through the noise to bring you the latest in education policy news. I’m Enrique Chaurand.

As schools across the country reckon with the ending of the American Rescue Plan (ARP) funds, many, if not all, are trying to find ways to sustain the services these funds supported. For most schools, that means finding some sustainable method of funding mental and behavioral health services. Fortunately, an expanding and increasingly well-known pathway through school-based Medicaid exists.

Outside of the Individuals with Disabilities Education Act (IDEA), school-based Medicaid is the single largest source of sustainable funding for health services in schools.

While most schools are aware of – and often use – school-based Medicaid to help fund Individualized Education Plan (IEP) services like speech therapy, it can do so much more. If state policy allows, school-based Medicaid can partially fund virtually all health services – including mental and behavioral health – a school provides.

In the last several years, there has been a massive amount of momentum to help states update their school-based Medicaid policies to ensure schools can claim the maximum amount of reimbursement.

The Bipartisan Safer Communities Act directed The Center for Medicaid and Medicare Service (CMS) to update their guide on school-based Medicaid services, created a technical assistance center to support states in their expansion of school-based Medicaid, and provided $50 million in grants to states to help them expand services.

CMS has made it clear they want states to look at all the opportunities to fully expand their school-based Medicaid programs to help schools pay for these vital services.

What can school-based Medicaid fund? If state policy allows the services reimbursable by Medicaid are vast and include:

  • Occupational therapy evaluations and services (including individual and group settings)
  • Physical therapy evaluations and services (including individual and group settings)
  • Speech therapy evaluations and services (including individual and group settings)
  • Audiology therapy and evaluations (including individual and group settings)
  • Nursing evaluations and services
  • Behavioral health evaluations and services (including individual and group settings)
  • ABA evaluations and services
  • Health aide/personal care aide services
  • Hearing and vision screenings
  • Respiratory therapy
  • Specialized transportation
  • Supporting families with enrolling in Medicaid

CMS is the Federal agency that sets the broad rules for Medicaid policy. Based on those rules, each state gets to make its own unique Medicaid plan. How much a school can claim in Medicaid reimbursement will depend on how their state has set up their school-based Medicaid policy. While states are often similar, no two states are the same.

Curious about your state? The Healthy Schools Campaign maintains a map that shows what services are reimbursable by state and houses a database that allows schools to easily find all the information on their state program.

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