The Basics of Billing Medicaid for School-Based Services


Teacher grading papers at a desk

As of Fall 2020, more than half of all states have encountered barriers inhibiting schools from maximizing and utilizing Medicaid reimbursement to support school-based health services. If good enough isn’t the standard you hold your students to, the same standard should apply to your Medicaid program.

With this in mind, you should know there is a better way. Your school can be more efficient with more insight into a more cost-effective solution. Knowing that all Medicaid eligible services are submitted correctly will give you the peace of mind that you have a well-run process in place that does not leave any revenue on the table. If that’s your goal, this information will surely help you on your path to a better Medicaid program.

Billing Medicaid for School-Based Services: Your Three Options 

Since 1988, states have been able to draw down federal funds under Medicaid to pay for school-based health and related services required by IDEA, when provided to Medicaid-eligible children with disabilities.  School-based Medicaid claiming programs enable your school district to seek reimbursement through three distinct avenues. These are Fee-for-Service Billing, School-Based Administrative Claiming, and Cost Reconciliation. Let’s look at each in more detail in order to better understand your options.

Fee-for-Service (FFS) Billing

Also known as Direct Service Billing, FFS is the process of claiming for individual or group therapy health sessions with students in a school setting. These sessions are bundled into claims and can be submitted to Medicaid throughout the year. While your exact billable services may vary by district, state, and educational offering, they can typically include:

  • Therapy services, including occupational and physical therapy and mental health care.
  • Personnel-based services through physicians, nurses, and care teams.
  • Care delivery services like case management, equipment, and transportation services.
  • Medical services pertaining to vision, hearing, and speech therapy.

This list is lengthy and varies state by state; not surprisingly, schools may have holes in their current billing process because of the many challenges of collecting the data, submitting claims, and not understanding the additional services you may be missing. You do not want to miss out on billing for these services as they will significantly impact your monthly budget. Most districts can expect FFS payments within a month of claim submission, so you’ll see a boost in accepted claims within weeks of bringing on this service.

School-Based Administrative Claiming (SBAC) or Medicaid Administrative Claiming (MAC) Programs

School-Based Administrative Claiming (SBAC) is a quarterly process that allows districts to recoup funds based on the Medicaid administrative outreach and support activities conducted at the district. Quarterly time study codes professional activities from PTO to direct therapy time to educational services.

Districts begin the process by identifying the pool of personnel that conducts Medicaid outreach and support services. Districts receive a quarterly payment that reflects the portion of Medicaid-related costs.

The Medicaid Administrative Claiming (MAC) program allows entities to claim federal Medicaid reimbursement for activities related to the administration of the state’s Medicaid plan, including costs associated with identifying and enrolling populations in need of Medicaid services, linking individuals and families to service providers, and coordinating and monitoring health-related services.

Cost Reconciliation

On occasion, the true cost of a service far exceeds initial estimates. Also known as Cost Settlement, Cost Reconciliation is your third option to look into. It is a process done annually that allows districts to receive additional funding for direct therapy. It applies when the actual cost of service delivery exceeds that which was received in interim fee-for-service payments throughout the year. It is important to note that due to the nature of this option, the Cost Reconciliation report must be submitted after both the Fee-for-Service billing period and administrative claims are finalized for the fiscal year.

Not every state offers a cost reconciliation option. If you reach out to CompuClaim for a personalized demo, we can discuss this and our solutions in more detail. In some states, this process is required to ensure Medicaid reimbursement stays consistent with the actual costs incurred in providing these important services.  In many cases, adjustments to your overall budgeting process can help you maximize your returns. Don’t forget to include:

  • Personnel Costs
  • Large Capital Expenditures (ex. wheelchairs)
  • Other Expenditures (ex. disinfectant spray)
  • Vendor Fees for FFS Claiming

The more valid claims your school district provides, the more funds you have in your budget—it’s as simple as that. For this reason, maximizing your claims is essential. The best way to maximize your cost report is to review which costs your district is including, and see where you may be missing some.

Discover How CompuClaim Can Help Your School Make the Most of Your Medicaid Opportunities

Medicaid has revenue earmarked annually for schools in each state. Your district is allowed to bill Medicaid for services, but claiming for reimbursement is not automatic. The responsibility falls entirely on your district to claim every cost, and in a compliant manner. That doesn’t mean you need to figure this out on your own!

CompuClaim can help ensure your school district gets all of the funds you qualify for. Say goodbye to overworked administrative assistants and the potential for human error. We’re here to simplify your Medicaid billing for school-based services, and your life.