Top 11 Reasons for Claims Holds and Denials in School-Based Medicaid


Top 11 Reasons for Claims Holds and Denials in School Based Medicaid

Medicaid plays a vital role in providing healthcare support to students in school settings. However, the process of submitting claims for reimbursement can be complex, and many claims face hurdles or denials along the way. In this blog post, we will delve into the top reasons why most claims in school-based Medicaid are held or denied.  

It’s important to note that while some reasons for claim holds and denials are consistent across states, others may vary based on specific state requirements and regulations, so check with your state’s Medicaid program to clarify.

Top Reasons Claims Get Held in Your Medicaid System

Your Medicaid vendor should make sure all information in the claim is complete before sending. However, sometimes required data goes under the radar and gets missed. In these cases, the claim will go to Held Services in your Medicaid Vendor. Here are the top reasons that services get held: 

Lack of Parental Consent on File

Ensuring proper parental consent is crucial before providing any healthcare services to students. Parental consent serves as the authorization for schools to bill Medicaid for the services rendered. In states across the country, it is a common requirement that schools have written consent on file. Without this consent, claims cannot be processed, resulting in delays in reimbursement. 

The rules around parental consent could change soon, however. Under a proposed new rule in May 2023 from the U.S. Department of Education, schools would no longer need to get consent from families to seek reimbursement from Medicaid. If rule gets approved, this could impact roughly 300,000 students who qualify for Medicaid, so this could have far-reaching impact for children in need of services. 

Prescription Upload (If Applicable in Your State)

Some states require prescriptions for certain services provided in school settings. In these cases, it is essential to upload the necessary prescriptions along with the claim submission. Failure to do so can lead to holds on the claims, as the absence of the required documentation hampers the processing of reimbursement. Check with your state Medicaid regulations to familiarize yourself with the rules about prescription uploads.

Lack of Supervision Sign-off

To ensure the quality and safety of healthcare services provided to students, schools must have a documented sign-off from a qualified professional who supervises the services. Without this supervision sign-off, claims may be held until the necessary documentation is provided. It is crucial to maintain accurate records of supervision to avoid potential issues with compliance and reimbursement.

Missing Weekly/Monthly Summaries (If Applicable in Your State)

In certain states, schools are required to submit weekly or monthly summaries of the healthcare services provided to students. These summaries serve as a comprehensive overview for Medicaid reimbursement purposes and help track the ongoing provision of services. Failing to submit these summaries can result in claims being held until the required documentation is provided.

Ways to Correct: 

You should be able to access a Held Services Report from your Medicaid vendor. This will help you understand the pieces of the puzzle you are missing. Your Client Success Manager should be able to guide you through fixing these common reasons that claims are held. (If you are a Relay partner, you can find your Client Success person by filling out this form.)


Denials are par for the course in billing for Medicaid—however, you need to be able to know which ones are fixable and which ones aren’t. Let’s take a look at the list:

Fixable Denials

Mismatched National Provider Identifier (NPI) Numbers

Accurate and consistent entry of NPI numbers is essential for successful claim processing. Denials can occur when NPI numbers are entered incorrectly or do not match the billing provider’s information. To avoid such denials, it is crucial to double-check and ensure accurate entry of all NPI numbers associated with the claim before submission. You can check NPI numbers here.

Duplicated Services

Submitting claims for duplicated services, when services are billed more than once for the same student and date of service, can result in denials. However, in some cases, the issue of duplication can be addressed by using a modifier, if applicable. Thoroughly reviewing claims before submission is necessary to prevent accidental duplication and subsequent denials.

Inadequate Diagnosis (ICD-10) Code

Claims may be denied if the diagnosis code (ICD-10) does not justify the services provided. It is essential to ensure that the diagnosis code accurately reflects the student’s condition and aligns with the billed services. Expanding the ICD-10 code to include additional relevant services can help prevent denials based on inadequate diagnosis codes.

Unfixable Denials

Maximum Medicaid Benefit Reached

Students can reach their maximum annual or monthly Medicaid benefit limits, which can lead to claim denials. These denials are beyond the control of the school or healthcare provider, as they are determined by the state Medicaid program guidelines. District admins should stay informed about each student’s eligibility and coverage limits to avoid submitting claims that will inevitably be denied. After the monthly maximum is reached, a new maximum will begin in the next month.

Student No Longer Medicaid Eligible

If a student’s Medicaid eligibility status changes, such as aging out of the program or relocating to a different state, claims may be denied. It is crucial for schools to regularly check their Medicaid eligibility. Ideally your vendor should do automated eligibility checks so your data is always current. 

It’s crucial to be aware that starting in April 2023 millions of children currently insured under Medicaid or the Children’s Health Insurance Program could lose their coverage. The continuous enrollment that began during the Covid pandemic in March 2020 will expire, causing many to lose insurance unless they renew their coverage. Schools can be instrumental in ensuring that this doesn’t happen to students. Families might not be aware of the expiration of their child’s Medicaid and might need help navigating through the system to renew it. Make sure you are sending reminders to your students and their parents to renew coverage.


Navigating the process of submitting claims for school-based Medicaid reimbursement can be complex and challenging. It is essential for schools and healthcare providers to be aware of the common reasons for claims being held or denied. By addressing these issues proactively, such as obtaining proper parental consent, uploading necessary prescriptions, ensuring supervision sign-offs, and providing required summaries, schools can mitigate the risk of claim holds. Furthermore, careful attention to accurate NPI numbers, avoiding service duplication, and ensuring adequate diagnosis codes can help prevent denials that may be fixable. However, it is important to acknowledge that some denials, such as reaching maximum benefits or changes in Medicaid eligibility status, are unfixable. By understanding these reasons and implementing appropriate measures, schools can improve their success rate in obtaining reimbursement for essential healthcare services provided to students through school-based Medicaid programs.

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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