New York School Bus Contractors Association



Agency Activities Board Members Calendar Contact Us Directory Home Industry News Legislation Links Membership Security		Commentary Regarding Final Rule Eliminating Medicaid Reimbursements By Robin Leeds, Industry Specialist, NSTA The Center for Medicaid Services, a division of the Department of Health and Human Services, is expected to issue a Final Rule by the end of this month that will eliminate Medicaid reimbursement to public schools for home-to-school transportation of Medicaid-eligible students with an IEP or IFSP. As you know, Medicaid is a federally-funded state-administered program that pays for certain medical services, many of which are school-based. The program has always recognized that transportation is a necessary element to enable recipients to benefit from the services, and in some cases, states have used Medicaid funding to reimburse schools for transportation of students receiving eligible services in school. The new rule, however, makes it clear that this is not a legitimate use of Medicaid funds. According to the proposal: "Students receive transportation from home to school and back regardless of whether or not they are determined eligible for special education services. Transportation from home to school and back is an essential school function and is furnished by the school regardless of whether medical services are received at the school. School-age children, including children with an IEP or IFSP, are transported from home to school primarily to receive an education, not to receive direct medical services. Because transportation coincides with the school schedule and is not directly related to a visit to a medical provider, characterization of the transportation as medically necessary to gain access to providers is inaccurate." The rule will continue to allow federal reimbursement for transportation from school to a non-school-based direct medical service provider that bills under the Medicaid program, and it will continue to reimburse states (and by extension, school districts) for transportation of pre-school children who receive direct medical services at school, as long as there is no educational component. The rule will apply to expenditures incurred after October 1, 2008. CMS is unable to estimate the savings due to the transportation component of the rule, which also includes elimination of reimbursement for school administrative costs. Overall, it is expected to produce $3.2 billion savings in the first 5 years. There is an urgent campaign among educational associations (NSBA, ASBO, state affiliated associations) and disability advocates to convince HHS not to go through with this rulemaking, but it does not seem to have hit the transportation community yet. While the regulation will not affect the mandate for transportation of students with special needs, it will likely result in revenue reductions for states and some school districts. Whether the ripple effect will reach transportation of non-disabled students is hard to say.
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