Spending Bills Would Permit Medicaid Reimbursements

Senate panel’s bill seeks to extend rural-schools program for one year.

A provision protecting school Medicaid reimbursements was approved as part of a supplemental-spending bill by the House of Representatives last week.

Under the bill, the federal government would have to continue reimbursing schools for administrative and most student-transportation costs covered by Medicaid until at least next spring, despite a Bush administration directive that sought to halt the practice.

The Medicaid provision and some other domestic programs had been part of a broader package financing the wars in Iraq and Afghanistan. But partisan battles led to the war funding being stripped out. That funding...