Why Should School Psychologists Care About Medicaid?

June 2017

Medicaid Cuts Will Undermine School Psychological Services and Jobs

As school psychologists, it is our responsibility to advocate for children and work with parents, teachers, administrators, and other school staff to ensure that all students have access to the evidence-based services they need to be successful at school and in life. Over the past few months, Congress has been considering legislation that would make significant changes to the Affordable Care Act and our nation’s healthcare system, including the Medicaid program. The new legislation, currently referred to as the American Health Care Act (AHCA), proposes significant changes to Medicaid that could adversely impact children, especially those with disabilities. These changes to Medicaid could also impact schools’ ability to provide comprehensive services to all students, including those with disabilities. Furthermore, many districts use Medicaid funds to help pay the salaries of various school-based health professionals, including school psychologists. It is imperative that school psychologists have a basic understanding of how schools and Medicaid interact to not only protect access to care, but to protect their jobs.  

Your Elected Officials Must Hear From You

More importantly, it is critically important that school psychologists reach out to their elected officials in Congress and urge them to protect Medicaid. NASP, along with over 60 national groups, has been involved in a months-long advocacy campaign to educate policy makers about the value of school-based Medicaid programs and to urge them to reject any legislation that cuts funding or changes the current structure of this vital program. We’ve made it easy for you! Visit the NASP Advocacy Action Center and write AND call your elected officials. If you are not sure what to say, we have provided some suggested talking points to get you started.

What Is Medicaid?

The Medicaid program is a state and federal partnership focused on providing medical benefits to uninsured or underinsured children among several other targeted groups. Legislation that enacted the Medicaid program is contained in Title XIX of the Social Security Act of 1965. Each state runs its own Medicaid program. Working with the federal Medicaid agency, states determine the criteria to be eligible for Medicaid services (including low income eligibility), the various services that are covered via Medicaid, and who can provide these services. The Medicaid program is quite flexible, and states can tailor their plans to address the specific populations of their state. Since 1988, Medicaid has permitted payment for certain medically necessary services provided to children under IDEA through an Individualized Education Program (IEP) or Individualized Family Service Plan (IFSP). This means schools are eligible to be reimbursed for direct medical services to Medicaid eligible students with an IEP or IFSP if those services are provided by someone the state considers a qualified provider of Medicaid services. (Based on information currently available to NASP, 35 states and the District of Columbia consider school psychologists to be qualified providers of Medicaid, meaning schools can seek reimbursement for certain services they provide.)

Why Should Schools Be Involved in Medicaid?

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Schools are a critical component of the healthcare safety net for children, and Medicaid plays a significant role in funding medically necessary services for children eligible for special education. Children who are physically and mentally healthy are more available to benefit from instruction. Simply put, schools are involved because this is where the children are. For many children, schools are the primary point of entry to receive vital health and mental health services. In fact, the majority of children who need mental and behavioral health care access those services at school. However, Medicaid helps support much more than mental and behavioral health services. In addressing the educational needs of children and youth, schools frequently provide physical and mental health services as well as speech and language therapy, physical therapy, nursing, and occupational therapy.

How Do Schools Use the Money They Receive From Medicaid?

Each State Medicaid Plan outlines how a district may use Medicaid revenue. Schools use Medicaid dollars in a variety of ways, and often portions of the reimbursed funds are used to support initiatives that benefit all students in the school. Funds may also be returned to the program that generated the revenue. Some school districts will provide school staff with monies to cover licensing and association fees, professional development and continuing education, technology for staff, or for creation of innovative intervention programs. A recent survey of district superintendents revealed that 68% of respondents use Medicaid reimbursement to support the salaries of various health and mental health professionals, while 45% of respondents use funds to expand health related services in their schools. Other uses of Medicaid funds include:

  • IEP implementation
  • Books, supplies, or other school-related expenses
  • Assistive technology

Why Is Medicaid Reimbursement Critical for Special Education?

The Individuals with Disabilities Act (IDEA) is substantially underfunded. Because Medicaid allows districts to be reimbursed for certain medically necessary services provided to children under IDEA through an IEP or IFSP, districts can invest in the personnel and services students are entitled to under IDEA. Audiology, nursing, speech–language pathology, occupational therapy, physical therapy, and mental health services are all examples of services that are commonly found in an IEP/IFSP and are also included in a state’s Medicaid plan.

What Is Free Care?

Prior to December 2014, schools could be reimbursed for services provided to Medicaid eligible students if those services were outlined in their Individualized Education Program (IEP). Now this restriction has been lifted, and schools can be reimbursed for a variety of services that are provided to any student who is Medicaid eligible. This allows for Medicaid to support more broad and comprehensive school-based prevention and wellness services to children and youth. School psychologists, along with other specialized instructional support personnel, are critical to implementing these comprehensive programs that help children and youth thrive at school, at home, and throughout life.

How Would Cuts to Medicaid Impact Children and Schools?

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Significant cuts or structural changes to Medicaid could result in the loss of schools’ ability to seek reimbursement from Medicaid for key services they routinely provide to students. Additional consequences include:

  • Fewer services: Providing comprehensive physical and mental health services in schools improves accessibility for many children and youth, particularly in high needs and hard to serve areas such as rural and urban communities. Reduced funding for Medicaid would result in decreased access to critical healthcare for many children and youth.
  • Cuts to general education: Cuts in Medicaid funding would require districts to utilize funds from other sources to provide the medically necessary services as mandated under IDEA. The subsequent reduction from other sources could result in elimination of programs in "nonmandated" areas of regular education.
  • Job loss: Cuts to Medicaid funding would impact districts’ ability to maintain employment for school nurses, physical and occupational therapists, speech–language pathologists, school social workers, school psychologists, and many other critical school personnel who ensure students with disabilities and those with a variety of educational needs are able to learn.
  • Fewer critical supplies: Districts use Medicaid reimbursement for critical supplies such as wheelchairs, therapeutic bicycles, hydraulic changing tables, walkers, weighted vests, and lifts, as well as items that are very student specific and are necessary for each child to access the curriculum as closely as possible to their nondisabled peers. Replacing this equipment would be difficult if not impossible without Medicaid reimbursement.
  • Fewer mental health supports: Seven out of 10 students receiving mental health services receive these services at school. Cuts to Medicaid would further marginalize these critical services and leave students without access to care.
  • Noncompliance with IDEA: Given the failure to commit federal resources to fully funding IDEA, Medicaid reimbursement serves as a critical funding stream to ensure districts can provide the specialized instructional supports and other medically necessary services to children with disabilities under IDEA. NAME estimates that 1% of all Medicaid reimbursement goes to local school districts (between $4–5 billion), which is roughly a quarter of the investment we make in IDEA ($17 billion).

Related Resources

Contact Your Elected Officials
Make your voice heard by visiting the NASP Advocacy Action Center to contact your members of Congress and share how Medicaid Matters.

Impact of Proposed American Health Care Act Fact Sheet
Medicaid is a cost-effective and efficient funder of essential health care services for children.

Proposed Changes to Medicaid Would Harm Children and Youth (Infographic)
This infographic depicts how the proposed cuts to Medicaid would adversely impact children and youth and features how to take action by visiting the NASP Advocacy Action Center.

Cuts in Medicaid Funding Will Directly Impact School Psychological Services (Infographic)
This infographic displays how decreased funding in Medicaid would directly impact school psychological services for children and youth.