How Can Schools Bill Medicaid for School Based Services?


How Can Schools Bill for School Based Medicaid Services

School-based services (SBS) are Medicaid-coverable services provided to children and adolescents in a school setting—particularly to those children enrolled in a state Medicaid program. It’s important to understand which providers and what services can be billed to Medicaid so you can make sure to get the maximum reimbursements for your students. Early and Periodic Screening, Diagnostic and Treatment (EPSDT) is a Medicaid benefit that mandates coverage of services described in section 1905(r) of the Social Security Act (the Act), which include a range of services including:

  • Early: Assessing and identifying problems early
    • Periodic: Checking children’s health at periodic, age-appropriate intervals
    • Screening: Providing physical, mental, developmental, dental, hearing, vision, and other screening tests to detect potential problems
  • Diagnostic: Performing diagnostic tests to follow up when a risk is identified
  • Treatment: Control, correct, or reduce health problems found

Schools also provide an opportunity to enroll eligible children and adolescents in Medicaid and the Children’s Health Insurance Program (CHIP); furnish Medicaid-covered services, including behavioral health services (mental health and substance use disorder (SUD) services) to eligible children; and help children who are enrolled in Medicaid access the services they need.

The Individuals with Disabilities Education Act (IDEA) authorizes federal funding to states to permit Medicaid payment for medical services provided to Medicaid-eligible children under IDEA through a child’s IEP or Individualized Family Service Plan (IFSP). School districts must provide IEPs that specify all special education and related services that are determined to be needed by the child. The Medicaid program can be billed for the health-related services required by the IEP if they are among the services specified in the Medicaid state plan or available through the EPSDT benefit. Examples of such services include:

  • Physical therapy
  • Speech pathology services
  • Occupational therapy
  • Psychological services
  • Medical screening and assessment services
  • Private duty nursing services

In order to bill Medicaid for school-based services, each child receiving the service must be enrolled in Medicaid and the services provided must meet the following conditions:

  1. The services must be medically necessary.
  1. The services must be covered in the state Medicaid plan or authorized by the federal Medicaid statute.
  1. The services must be listed in the child’s individualized education program (IEP).
  1. The school district or local educational agency (LEA) must be authorized by the state as a qualified Medicaid provider. 

Student Medicaid Eligibility

To be eligible for student Medicaid, students must meet certain requirements set by their state. These requirements can include:

  1. Income Limits: Most states require that families meet certain income limits to be eligible for Medicaid. These limits can vary widely depending on the state and the program.
  1. Age Limits: Some states have age limits on student Medicaid eligibility. For example, a state may only offer Medicaid coverage to students under the age of 21 or 26.
  1. Educational Enrollment Status: Students also must be enrolled in public school, charter school or state school for the deaf.

The Special Education (IEP) Journey

When a student needs more help to succeed in general education, an eligibility determination meeting is held by an Individualized Education Program (IEP) team to review what the student needs and decide what supports, interventions, or strategies could be used for the student’s individual needs. Once it is determined that the student needs an IEP, it will be created by an IEP team and individualized to that student’s unique learning needs. If the student is determined to be on Medicaid or Medicaid eligible, then some of the IEP services the student receives are eligible to be reimbursed by Medicaid. Using Federal school-based Medicaid billing guidelines, each state adopts their own set of billing rules. Here are examples of school-based Medicaid programs in Rhode Island and Iowa:

Rhode Island School Based Medicaid Program

Local Education Agencies (LEAs) in Rhode Island have been able to enroll as Medicaid providers since 1992. This includes charter schools. Enrolling as a Medicaid provider enables LEAs to submit Medicaid claims for the following school based EPSDT health services:

  • Physical Therapy
  • Occupational Therapy
  • Speech Therapy
  • Orientation and Mobility
  • Counseling
  • Nursing
  • Personal Care
  • Assistive Technology
  • Case Management
  • Child Outreach
  • Day Treatment
  • Expanded Behavioral Health
  • Neuropsychological Evaluations
  • Psychological Evaluations
  • Residential Treatment
  • Sign Language or Interpreter
  • Transportation
  • Vision services

Nursing services are covered as individual, non-routine skilled nursing services

Non-routine services include services for children enrolled in special education who have tracheostomies, catheters, ventilators, and other medically necessary services. This can include the one-to-one nursing services provided during transportation to and from school, as well as the one-to-one services provided during the school day.

Nursing providers eligible for reimbursement:

  • Certified School Nurse Teacher
  • Licensed RN
  • LPN

The need for nursing services must be described in an IHCP if the IEP does not detail the nursing services needed by the student.

Behavioral healthcare is covered as:

  • Counseling services (individual, parent, and group)
  • Psychological evaluation services, including administering psychiatric, psychological, and educational tests, and interpreting assessment results
  • Expanded behavioral health counseling services

Behavioral providers that are eligible for reimbursement include:

Counseling services:

  • Board-Certified Psychiatrist
  • Licensed Clinical Psychologist
  • LCSW
  • Licensed Independent Clinical Social Worker
  • Certified School Social Worker
  • Licensed Mental Health Counselor

Psychological Evaluation & Expanded Behavioral Health Counseling:

  • Board-certified psychiatrists
  • Licensed Clinical Psychologists
  • Licensed Social Worker
  • Certified School Social Worker
  • Licensed Mental Health Counselor

Eligibility: Medicaid-eligible students under age 21 are eligible for medically necessary services. Generally, services must be provided pursuant to an IEP to be reimbursable; however, evaluation used to determine initial eligibility for special education is an allowable claim.

Billing: The billing providers are the LEAs, regional districts, public charter schools, and the Metropolitan Career and Technical Center. Rendering providers must enroll in Medicaid. School-based services are carved out of the Medicaid-managed care benefit package. LEAs are responsible for maintaining all required documentation for each claim submitted. Visit the State of Rhode Island Department of Education online for more information on the types of documentation needed to support Medicaid claims.

Iowa School Based Medicaid Program

The Iowa Department of Education has collaborated with Iowa Medicaid to provide guidance to schools in regard to the federal requirements related to health care services that are reimbursable under EPSDT and the school-based services under the IDEA.

The Medicaid EPSDT benefit provides comprehensive and preventive health care services for children under age 21 who are enrolled in Medicaid. EPSDT is key to ensuring that children and adolescents receive appropriate preventive, dental, mental health, developmental, and specialty services, including the following services:

  • Primary and Preventive Health
  • Audiological Services
  • Behavioral Services
  • Health and Nursing Services
  • Interpreter Services
  • Medical Supplies
  • Nutrition Counseling
  • Occupational Therapy
  • Physical Therapy
  • Speech Therapy
  • Personal Health Services
  • Psychological Services
  • Social Work Services
  • Transportation
  • Vision Services
  • Rehabilitative Services

Nursing services are covered as:

  • Screening (RNs only)
  • Individual assessment (RNs only)
  • Nursing service to an individual
  • Nursing service to a group
  • Contracted nursing service
  • Consultation
  • Nursing care procedures

Providers eligible for reimbursement include:

  • Licensed RNs
  • Licensed LPNs
  • Licensed physicians
  • Paraprofessionals (Under supervision of a licensed RN or physician if there is an individual health plan in place that recommends a paraprofessional.)

Behavioral healthcare is covered as:

  • Behavioral services
  • Intensive skill-building
  • Psychological Services
  • Social Work and Counseling

Providers eligible for reimbursement include:

Behavioral Services:

  • Licensed Mental Health Professional (LMFTs, Licensed Mental Health Counselors, LSW, Certified School Psychologist, Certified School Social Worker, Board-Certified Behavior Analyst and Paraprofessionals) 

Skill-Building Services:

  • Board-Certified Behavioral Analysts
  • Board-Certified Assistant Behavior Analysts under BCBA supervision
  • Non-Certified Staff (bachelor’s degree) under BCBA supervision.

Psychological Services:

  • Licensed Psychologist
  • Licensed Certified School Psychologist

Social Work Services:

  • Licensed Social Worker
  • Certified School Social Worker

Counseling Services

  • Licensed Guidance Counselor

Billing: The billing providers are the LEAs; Area Education Agencies (AEAs); Iowa Educational Services for the Blind and Visually Impaired; and the Iowa School for the Deaf. Rendering providers are not required to enroll in Medicaid. School-based services are part of Iowa’s Medicaid managed care program. For more information about the Iowa school-based Medicaid program follow this link.


While there are Federal rules and regulations covering the School Based Medicaid Program, each state has some leeway in deciding which Medicaid services and programs a state will accept along with the billing rules to follow. In general, students who meet income and other requirements can enroll in the program. To find out more about eligibility rules in your state, contact Relay Hub.

Relay and School Medicaid Billing

Relay provides some of the best information you can find in school based Medicaid, including state-specific Medicaid facts and links to national resources, like Healthy Schools Campaign that all provide an in-depth analysis of billing requirements.

Get in touch with the Relay team to help you on your Medicaid state plan, just review your current Medicaid program—regardless of your Medicaid billing vendor.

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