Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — Members of a legislative budget committee say they are looking for ways to restore recent reductions in Medicaid-funded attendant care services for children in special education.

“Clearly, there is no way school systems can provide services for these kids without attendant care. It’s absolutely essential,” said Sen. Laura Kelly, D-Topeka.

“I think there are some steps we can take to ease the school districts’ pain on this issue,” said Rep. Bill Feuerborn, D- Garnett.

Feurerborn and Kelly serve on the interim Legislative Budget Committee, which met Friday.

Last month, the Kansas Health Policy Authority notified the state’s school districts that Medicaid would no longer pay for attendant care services.

The decision stemmed in part from some of the services being medically necessary while others were more educational in nature.

Medicaid is supposed to be spent on medical services, not on educational services.

Scott Brunner, chief financial officer at the health policy authority, noted that in June the Centers for Medicaid and Medicare Services ruled that if the state funded medically necessary attendant care services in in-school settings, it would have to fund them in outside-of-school settings as well.

Such an expansion, Brunner said, would have cost an additional $25 million to $30 million.

The health policy authority, he said, didn’t have ready access to that much money.

In an effort to offset the drop in Medicaid payments to school districts, Brunner said the health policy authority reconfigured the way the districts bill the state for the services they provide. The new system, he said, is expected to boost overall spending by about $5 million.

Brunner assured committee members that he and others at the health policy authority were trying to make the best of a bad situation.

But several school districts – especially those with above average numbers of children with serious disabilities – lost hundreds of thousands of dollars.

Lawrence school officials, for example, have projected a $350,000 cut to the Medicaid-funded portion of the district’s special education budget.

Frank Harwood, the Lawrence district’s chief operations officer, said the reduction will force the district to raid other programs’ budget.

“All this comes on the heels of two fiscal years that have seen our general fund budget cut $7.1 million,” Harwood said, predicting another “painful round of budget cutting.”

Several school officials said they were blindsided by the attendant-care cuts, noting their current-year budgets were set in May; the change in policy was announced in July.

“I thought the KHPA’s timing of this was very poor,” Feurerborn said afterward. “I think if the district had time to plan for some of this, they might have been able to handle it better. But this was dropped on them very quickly, after their budgets were set. I’m kind of disappointed in KHPA.”

Last fiscal year, the state’s special education programs’ received almost $24.6 million in Medicaid funding. Attendant care services accounted for almost 41 percent of the spending.

Committee members also discussed shortfalls in the state’s Medicaid-funded in-home services for the frail elderly and for people with disabilities.

Department on Aging Secretary Martin Kennedy warned that his budget is headed for a $7 million deficit.

Ray Dalton, a deputy secretary at the Department of Social and rehabilitation Services, said the agency is dealing with an $11 million hole in its budget.