May 7, 2021

School Medicaid Reimbursement Expanded

After being debated for several sessions of the Indiana General Assembly, language has been passed into law unlocking additional Medicaid reimbursement opportunities for our schools. This action, known as Public Law 196 will allow schools to seek reimbursement for services provided under:

  • Plans developed under Section 504 of the Federal Rehabilitation Act
  • Behavioral intervention plans
  • Service plans developed under 511 IAC 7-34
  • Individualized health care plans

Medically necessary, Medicaid covered nursing services provided by a licensed and qualified nurse also become reimbursable under the new law.

Prior to this legislative action only IEP services were reimbursable, although all of the above services were mandated to be both provided and paid for by schools.  Based on other states that have unlocked this mechanism, Indiana schools could recapture in tens of millions in additional funding each year. This funding, approximately 66 cents for each dollar previously spent on these services, can then be used for virtually any expense. Possibilities include reinvestment into student support services and medical care, enhancements to curriculum and technology and improving teacher pay.

The law still requires the Indiana Family and Social Services Administration to submit a state plan amendment to the Centers for Medicare and Medicaid Services to take effect, and no timeline was written into the law for that action.  Additionally, schools that have not yet applied to become a Medicaid provider must do so before they can seek this reimbursement.

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