Schools play a critical role in identifying and addressing the mental health needs of children and adolescents. Given the amount of time young people spend in educational settings, schools are uniquely positioned to offer mental health services. However, funding these essential services has often been a challenge. One potential source of funding is Medicaid, the United States’ health program for individuals and families with low income and resources, which some states use to cover mental health services in schools. This blog explores how much Medicaid reimburses for mental health, how to bill Medicaid for mental health services, and the different approaches states take in implementing this model in schools.
Medicaid can reimburse for health services provided to eligible children under the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit. EPSDT is Medicaid’s program, and it includes a broad array of preventive, diagnostic, and treatment services. Mental health services, when deemed medically necessary, fall under this benefit. The challenge often lies in navigating the complex regulations that govern Medicaid billing and ensuring that services provided in schools qualify for reimbursement.
Medicaid reimburses school districts between $4–$6 billion annually for school-based services, including mental health care. Medicaid is the fourth largest source of federal funding for schools.
In 2024, states that expand school-based Medicaid to provide services, including mental health services, to all Medicaid-enrolled students may see significant increases in federal resources.
For example, Michigan projects it will see an increase of $14 million after expanding its program to allow for reimbursement of services provided by master’s degree level school psychologists.
The ability for schools to bill Medicaid for mental health services largely depends on state-specific Medicaid plans and policies. Here are some steps to determine if your state allows this:
1. Check State Regulations**: Review your state’s Medicaid guidelines, which can typically be found on the state’s Medicaid or Department of Health Services website. These guidelines will specify what types of services are covered and any specific rules about school-based services.
2. Consult with State Education Agencies**: Often, state departments of education will have resources or guidelines about funding for school-based health services, including mental health.
3. Look for Precedents**: Research other school districts in your state to see if they have been successful in obtaining Medicaid reimbursements for mental health services. This can provide a roadmap and highlight potential challenges.
4. Professional Consultation**: Engaging with legal experts or consultants who specialize in Medicaid billing for educational settings can provide clarity and guidance specific to your state’s context.
Direct Service Billing
Schools directly bill Medicaid for services provided to eligible students. This model requires schools to handle Medicaid billing processes, which can be complex and require significant administrative support.
Local Education Agency Billing
Some states allow local education agencies (LEAs) to bill Medicaid. This model often involves the LEA serving as the hub for billing Medicaid for services delivered across multiple schools within its jurisdiction.
Fee-For-Service and Managed Care Models
In fee-for-service models, schools are reimbursed for each service provided. In contrast, managed care models involve a capitated payment system where a fixed amount is paid per enrolled student per period, covering all provided services.
Third-Party Billing
Some states facilitate third-party billing, where an external entity manages Medicaid billing for schools, reducing the administrative burden on educational institutions.
As schools increasingly become a focal point for mental health services, understanding and accessing available funding sources like Medicaid is crucial. State-specific regulations and models vary, requiring careful navigation and planning by school administrators. However, when successfully implemented, Medicaid funding can significantly enhance the ability of schools to meet the mental health needs of their students, promoting better educational outcomes and overall well-being.
Discover how Relay Medicaid billing software can streamline your school’s access to crucial mental health funding through Medicaid. Empower service providers with tools to navigate state regulations effectively and enhance student well-being. Take the first step towards maximizing Medicaid funding for your school—explore Relay today!
For schools looking to explore this path, starting with a thorough assessment of state policies and engaging with experienced professionals can pave the way for accessing Medicaid funds to support vital mental health services.
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