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Education Funding

Medicaid Treats Small Districts and Rural Schools Unfairly, Report Says

By Andrew Ujifusa — February 20, 2019 2 min read
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The Medicaid program—a big source of federal funding for the nation’s schools—needs an overhaul in order to make it easier for more schools to access and use, a group representing superintendents says in a new report.

Using survey data from hundreds of superintendents, the report from AASA, the School Superintendents Association, found that 84 percent of districts that reported not seeking reimbursements from Medicaid for school-based health services are rural. More than half of those, 55 percent, have enrollments of less than 1,000 students. And 37 percent of rural districts in the survey say that the costs of complying with Medicaid’s administrative requirements led them to avoid seeking funds from the program.

“Structural Inefficiencies in the School-Based Medicaid Program Disadvantage Small and Rural Districts and Students” was released Wednesday. It also calls for Congress to act by giving districts more flexibility in how they account for Medicaid reimbursements, and letting districts work with Managed Care Organizations to provide better health services for children, among other recommendations.

Although it’s not part of the U.S. Department of Education’s budget, Medicaid spending for schools (which is roughly $4 billion) is the third-largest source of federal funds for K-12, behind Title I money to disadvantaged students and special education funding under the Individuals With Disabilities Education Act.

“Medicaid has the responsibility, and the opportunity, to enable school districts of all capacities to fully and equitably receive reimbursement under the Medicaid program while facilitating accountable and efficient processes for schools to follow,” the report states.

AASA’s report was based on a survey of 750 district leaders in 41 states about their participation, or lack thereof, in Medicaid.

To portray how much red tape superintendents have to navigate in order to fulfill obligations attached to Medicaid funding, the report compares the program’s paperwork requirements to what’s required for IDEA funding in this chart:

The report also notes how long it’s been since schools have gotten updated information about key aspects of Medicaid—districts last got guidance about claiming reimbursements in 2003, for example.

Check out the full AASA report below:


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