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 last week.

The Department of Health and Human Services (HHS) has rescinded a final rule that would have eliminated reimbursement for the costs of transporting Medicaid-eligible students to and from schools.

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Simultaneously, HHS also rescinded rules that would have limited the outpatient hospital and clinic service benefit for Medicaid beneficiaries and restricted beneficiary access to case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.