Feds save Medicaid payments for student transportation

WASHINGTON, D.C. — School districts will continue to be able to receive Medicaid payments for some transportation activities thanks to a move made by the federal government in late June.

The Department of Health and Human Services (HHS) rescinded a final rule that would have eliminated reimbursement for the costs of transporting Medicaid-eligible students to and from schools.

Alexandra Robinson, director of the transportation services department at San Diego Unified School District, said that the final rule would have affected her district, but “it really would have been the smaller districts, the ones that relied on this funding as a major source, that would have suffered most.

“We are obviously happy with the decision,” Robinson said.

HHS said in a statement that the move reflects concern that the rule, published Dec. 28, 2007, “could limit the Medicaid administrative outreach activities of schools, and that the overall budgetary impact on schools could potentially impact their ability to offer Medicaid services to students.”

Simultaneously, HHS also rescinded rules that would have limited the outpatient hospital and clinic service benefit for Medicaid beneficiaries and restricted beneficiary access to case management services. The rules were, in whole or in part, under congressional moratoria that were set to expire on July 1.

The National Association for Pupil Transportation said in a newsletter that the final rule cutting transportation reimbursements would have had “a direct and dramatic impact” on some of its members.

HHS Secretary Kathleen Sebelius, in the statement announcing the rescissions, said that if the rules had been left in place, they “would have potentially adverse consequences for Medicaid beneficiaries, some of our nation’s most vulnerable people.

“By rescinding these rules, we can expect that children will continue receiving services through their schools, beneficiaries will be able to access all available case management resources to help them better manage their health care, and outpatient hospital and clinic services can continue to be covered in the most efficient manner,” Sebelius said.