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Originally published July 19, 2010 at 5:02 p.m., updated July 21, 2010 at 3:31 p.m.
TOPEKA Kansas public schools will receive increased Medicaid funding for health services they provide children enrolled in special education programs but no longer will be reimbursed for providing the students attendant care, state Medicaid officials announced today.
Officials for the Kansas Health Policy Authority, which oversees the state's Medicaid program, said the federal Centers for Medicare and Medicaid Services (CMS) had approved an amendment to the state's Medicaid plan, which will allow schools to be reimbursed for the actual cost of providing the health services.
Schools currently are reimbursed according to a fee-for-service schedule that pays less than actual cost.
The new plan will allow schools to submit cost reports at the end of each school year and be reimbursed for the difference between actual expenses and what they were paid from the fee-for-service schedule.
The plan amendment was approved retroactive to July 1, 2009, which means school districts can submit claims and be reimbursed for costs incurred during the 2009-2010 school year.
“This will increase Medicaid funding for special education programs in schools,” said Andy Allison, executive director of the health policy authority, in a prepared statement. “Schools are under a federal mandate to provide special education services in the least restrictive environment, and these services are essential for them to fulfill that mandate. We know schools haven’t been getting reimbursed for the full cost of providing these services and we’ve been working for the last two years trying to find a way to solve that.”
The range of services covered include: specialized transportation, nursing, occupational therapy, physical therapy, and speech, language and hearing services.
The approved amendment, officials said, also allows reimbursement for two other areas of school-based services previously not covered - those provided by psychologists and social workers.
No more payments for attendant care
But KHPA officials said the costs of attendant care services for special education students will no longer be covered by Medicaid, as of July 1.
Agency officials said CMS informed them Medicaid couldn't legally cover attendant care in schools unless the state program was expanded to also cover attendant care in other settings.
That would have cost the state an additional $7.5 million to $9 million a year, according to agency spokesman Peter Hancock.
"We would have to expand the program in a very costly way," Hancock said. "The state couldn't afford it. This wasn't an expansion year."
Bill Craig is president of Lake Mary Center, which provides residential services for severely disabled children, many of whom are medically fragile. The center also operates a school in partnership with the Paola school district that has more than 100 students.
Craig said Lake Mary spends about $500,000 a year on attendant care to help the children in the school with feeding tubes, toileting, behavior plans, eating, etc. The school's total budget, he said, is about $3 million, so the loss of attendant care dollars will be devastating and more so since he received short notice of the changes. He said he was told only a few days before the July 1 cut-off that the payments would stop.
"We're just kind of reeling to be hit with this a week before the fiscal year began and we didn't have any warning," he said. "It's just been a body blow for Lake Mary."
Craig said he would have to lay off staff and cut back on services provided by the center.
Worried about paying back CMS
Health policy authority officials said they had no choice but to give short notice because they had short notice themselves from CMS.
"It was short notice and it was unfortunate," Hancock said. "We all got short notice. I understand they (schools) are making staffing and contracting decisions. But if we allowed school districts to keep collecting for attendant care costs, we'd be putting the state in jeopardy. CMS could ding us for it later and make the state pay it back."
Hancock said continuing the payments despite the CMS ruling otherwise could have put the state at risk of owing the federal government between $11 million and $13 million.
“It’s unfortunate that we’re no longer able to reimburse for attendant care services, and that we learned of CMS’s decision so late in the year,” Allison said in a prepared statement. “Children with severe physical or mental disabilities often need that kind of service just to be able to function and attend school. We’re asking CMS to reconsider its position so schools can continue getting Medicaid funding for that critical service. In the meantime, however, it cannot be funded through Medicaid.”
Allison said despite the attendant-care ruling, schools overall should still see a net increase in Medicaid funding for school-based health services of between $5 million and $10 million because of the new coverage for psychological and social work services.
But Mark Tallman, a lobbyist for the Kansas Association of School Boards, said whether individual school districts see net increases or losses could vary district to district.
"My understanding is that how you're going to be affected will vary district to district depending on the mix of services you provide," he said. "If you're a district with a lot of attendant care, then you'll probably be a net loser."
He described the overall rule changes as, "one of those things that might have been worse. One of the big problems districts experience are these fluctuating federal policies."
He said several years ago, state officials urged districts to aggressively pursue Medicaid reimbursements for special education costs. Then about three years ago, federal rules changed and districts found themselves with fewer dollars to support the same programs.
Tallman said school districts likely would see the new plan amendment as part of that ongoing back-and-forth and uncertainty over funding streams.
"The Medicaid issue is particularly sensitive," he said, due to the repeated changes.
For their part, health policy authority officials said because a number of districts were worried about losing money on attendant care, the agency has scheduled a meeting July 30 in Wichita with school district representatives to discuss the problem. The meeting is scheduled in conjunction with a leadership conference for special education directors.
According to the health policy authority, during the 2008-2009 school year (the last full year for which data are available) Kansas schools received $26.2 million in Medicaid reimbursements. Attendant care accounted for 32.5 percent of that.
Wichita's U.S.D. 259 is the state's largest school district. The rule changes were welcomed there.
"For the most part, this is very good," said Diane Gjerstad, the district's lobbyist.
Gjerstad said attendant care costs, relatively speaking, are not a "large cost to Wichita schools," and that the increased funding for health services would allow the district to recoup more of the actual costs of providing them.
Governance issue raised
Tom Laing, executive director of Interhab, a group that represents most of the state's community-based programs for the developmentally disabled, said he and others were dismayed that health policy authority officials said they would appeal the CMS ruling on attendant care but then stopped payments immediately instead of waiting to see the appeal results.
"We certainly haven't helped ourselves by eliminating it July 1 without a fight," he said. "Boom. July 1 it ended. It's a sad day when an independent agency in Topeka -under the whip of the federal government and without considering the individual needs of the children - agreed to eliminate this program."
Laing said Interhab has been in communication with the Governor's Office and the Kansas Department of Social and Rehabilitation Services to see if a solution to the problem could be found. He said the health policy authority was unresponsive to community needs.
"It's a real governance problem," he said. "We're going to invite additional policymakers and legislators to look at this."
Laing said other government agencies are more responsive to community needs because they are more directly answerable to elected officials.
"They (the health policy authority) are not led by elected officials. It has a board of volunteers and is run by a person who's never had any experience in the community. I think a more informed perspective about what happens in the community would be better."