CMS eliminates payment for school-based administrative and transportation activities

The Centers for Medicare & Medicaid (CMS) of the Department of Health and Human Services has issued a final rule eliminating federal Medicaid payment for the cost of certain school-based administrative and transportation activities. CMS has determined these activities are not “necessary for the proper and efficient administration of the Medicaid State plan” and are not within the definition of the optional transportation benefit. Background on the proposed rule and the controversy over the proposal is at the third link below. Under the final rules, federal Medicaid payments will no longer be available for administrative activities performed by school employees or for transportation from home to school. The effective date stated in the final rules is February 26, 2008. However, the recently enacted Medicare, Medicaid, and SCHIP Extension Act of 2007 provides for a six-month moratorium on any changes to school-based Medicaid reimbursements. NSBA’s Office of Advocacy hopes to obtain a permanent legislative solution to the problem this year.

72 Fed. Reg. 73,635 (Dec. 28, 2007)
CMS final rule
CMS Fact sheet on final rule
NSBA School Law pages on controversy