New Medicaid Notification Rule Worries Some Special Educators

A change in Medicaid reimbursement policy has prompted concern from some special education officials who see it as potentially burdensome, but a federal official says the intent is to protect parental privacy rights, not to create more paperwork.

Medicaid, the nation’s health- insurance program for the poor, reimburses school districts for health services they provide to students with disabilities whose families are enrolled in Medicaid. Those services are primarily speech, physical, and occupational therapy.

The recently released final regulations for the 2004 reauthorization of the Individuals with Disabilities Education Act say that “each time” a district asks for reimbursement from Medicaid, it should notify parents.

The Department of Education said in releasing the regulation that obtaining parental consent each time the public agency seeks to use a parent’s public insurance to pay for a service is important to protect the privacy rights of the parent and “to ensure that the parent is fully informed of a public agency’s access to his or her public benefits.”

The problem, according to some who work with Medicaid at the state level, is defining “each time.” Medicaid benefits are often accessed multiple times during a school year, they say.

“The literal meaning makes it almost impossible to do, so we have to hope they mean something else,” said Cathy Griffin, the president of the National Alliance for Medicaid in Education and a specialist in third-party reimbursement policy for the Minnesota Department of Education.

But Alexa Posny, the director of the federal Education Department’s office for special education programs, said the new regulation is not intended to create a blizzard of paperwork for states. She gave an example of a child whose individualized education program requires three hourlong sessions a week of occupational therapy. Over the course of an average school year, that would amount to 108 sessions.

“The intent is to let parents know when the insurance is going to be tapped,” she said. “Not that they would have to sign 108 times.”

Annual Release Form?

Ms. Posny said one possible way to meet the goals of the regulation is to have parents of a child with disabilities sign a release form each year when the child’s IEP is developed. States can also elect to have parents sign releases more frequently, she said.

However, some states have blanket release forms that Medicaid beneficiaries sign just once, when they enroll in the public program.

“That would not meet the letter of the law,” Ms. Posny said. States need to establish “a pattern of informed consent,” she said.

After she was told of Ms. Posny’s comments, Ms. Griffin said in an e-mail that if that interpretation is followed, “although this will constitute a change in many states, at least it will be reasonable to administer.”

John Hill, a Medicaid liaison for the Indiana Department of Education, said his state already requires annual consent forms from parents. But the confusion over the regulation’s intent is not surprising, he said. Officials from the Education Department and the Centers for Medicare and Medicaid Services, the Department of Health and Human Services agency that oversees Medicaid, need to sit down and talk with each other, Mr. Hill said.

“Every single day, things get more complicated,” he added.