Medicaid and Special Education:

Coordination of Services for Children With Disabilities Is Evolving

HEHS-00-20: Published: Dec 10, 1999. Publicly Released: Jan 10, 2000.

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Pursuant to a congressional request, GAO reviewed the mechanisms of coordination between Medicaid and the Individuals With Disabilities Education Act (IDEA), focusing on: (1) how Medicaid and IDEA interact to meet the needs of low-income school-aged children with disabilities; and (2) issues that have arisen in coordinating Medicaid and IDEA services in schools.

GAO noted that: (1) Medicaid and IDEA interact differently at the federal, state, and local levels, and the extent and nature of coordination continue to evolve; (2) federal efforts focus on: (a) helping states access funding sources such as Medicaid; and (b) working to develop clear and consistent guidance to help educational entities appropriately claim Medicaid funding for IDEA-related medical services; (3) while charged with ensuring that Medicaid-eligible individuals have access to and receive covered services, the Health Care Financing Administration (HCFA) must also safeguard Medicaid against improper claims; (4) in the states GAO contacted, interagency agreements and agency liaisons are the primary mechanisms of state-level interaction between Medicaid and IDEA; (5) as states and school districts have worked to obtain Medicaid reimbursement for covered school-based services, several concerns regarding coordination with IDEA have arisen; (6) concerns generally revolve around determining which IDEA-related services Medicaid will cover, identifying children who are eligible for both programs, and managing the documentation required for submitting Medicaid claims; (7) these efforts are complex for many reasons, including the need to safeguard the privacy of children with disabilities while ensuring appropriate documentation for claiming Medicaid reimbursement; (8) efforts to coordinate Medicaid and IDEA have also been affected by the lack of clear and consistent federal guidance; (9) inconsistent guidance from HCFA appears to have heightened school district concerns that Medicaid reimbursements will have to be returned to the federal government later because of inappropriate documentation or changes in documentation requirements; (10) recognizing the need for better coordination, HCFA is developing additional guidance, which it plans to issue in 2000; (11) additionally, HCFA has established a position to advise its Administrator on disability policy and to facilitate communication among the Administrator of HCFA, other federal policymakers, including the Assistant Secretary for Special Education and Rehabilitation Services, and the disability community; and (12) while these actions will not solve the difficulties in coordinating Medicaid and IDEA services, state and local efforts could be facilitated by federal guidance in communicating Medicaid's coverage and documentation requirements.

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