Requirements under the Medicaid program for items and services furnished in or through an educational program or setting to children, including children with developmental, physical, or mental health needs

(a)

Requirements for Payments

Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended— (1)in subsection (i)— (A)in paragraph (22), by striking the period at the end and inserting ; or; and (B)by inserting after paragraph (22), the following new paragraphs:

(23)with respect to any amount expended by, or on behalf of, the State (including by a local educational agency in the State or the lead agency in the State with responsibility for administering part C of the Individuals with Disabilities Education Act) for an item or service provided under the State plan in or through an educational program or setting, or for any administrative cost incurred to carry out the State plan in or through such a program or setting, or for a transportation service for an individual who has not attained age 21, unless the requirements of subsection (y) are met; or (24)with respect to any amount expended for an item or service provided under the State plan in or through an educational program or setting, or for any administrative cost incurred to carry out the plan in or through such a program or setting by, or on behalf of, the State through an agency that is not the State agency with responsibility for administering the State plan (including a local educational agency in the State or the lead agency in the State with responsibility for administering part C of the Individuals with Disabilities Education Act) and that enters into a contract or other arrangement with a person or entity for or in connection with the collection or submission of claims for such an expenditure or cost, unless the agency— (A)if not a public agency operating a consortium with other public agencies, uses a competitive bidding process or otherwise to contract with such person or entity at a reasonable rate commensurate with the services performed by the person or entity; and (B)requires that any fees (including any administrative fees) to be paid to the person or entity for the collection or submission of such claims are identified as a non-contingent, specified dollar amount in the contract.

; and

(2)by adding at the end the following new subsection:

(y)

Requirements for federal financial participation for furnishing medical assistance (including medically needed transportation) in or through an educational program or setting

For purposes of subsection (i)(23), the requirements of this subsection are the following: (1)

Approved methodology for expenditures for bundled items, services, and administrative costs

(A)

In general

In the case of any amount expended by, or on behalf of, the State for a bundle of individual items, services, and administrative costs under the State plan that are furnished in or through an educational program or setting, the expenditure must be made in accordance with a methodology approved by the Secretary which— (i)provides for an itemization to the Secretary in a manner that ensures accountability of the cost of the bundled items, services, and administrative costs and includes payment rates and the methodologies underlying the establishment of such rates; (ii)has a sound basis for determining such payment rates and methodologies; and (iii)matches payments for the bundled items, services, and administrative costs with corresponding items and services provided and administrative costs incurred under the State plan. (B)

Rule of construction

Nothing in subparagraph (A) shall be construed as— (i)requiring a State to establish and apply such a methodology through a State plan amendment; (ii)requiring a State with such an approved methodology to obtain the approval of the Secretary for any increase in rates of reimbursement that are established consistent with such methodology; or (iii)prohibiting the Secretary from reviewing a State's costs for the individual items, services, and administrative costs that make up a proposed bundle of items, services, and costs as a condition of approval of the methodology that the State will establish to determine the rate of reimbursement for such bundle of items, services, and costs. (2)

Application of market rate for individual items, services, administrative costs

In the case of an amount expended by, or on behalf of, the State for an individual item, service, or administrative cost under the State plan that is furnished in or through an educational program or setting, the State must establish that the amount expended— (A)does not exceed the amount that would have been paid for the item, service, or administrative cost if the item or service was provided or the cost was incurred by an entity in or through a program or setting other than an educational program or setting; or (B)if the amount expended for the item, service, or administrative cost is higher than the amount described in subparagraph (A), was necessary. (3)

Transportation services

(A)

In general

In the case of an amount expended by, or on behalf of, the State for furnishing in or through an educational program or setting a transportation service for an individual who has not attained age 21 and who is eligible for medical assistance under the State plan, the State mush establish that— (i)a medical need for transportation is specifically listed in the individualized education program for the individual established pursuant to part B of the Individuals with Disabilities Education Act or, in the case of an infant or a toddler with a disability, in the individualized family service plan established for such infant or toddler pursuant to part C of such Act, or is furnished to the individual pursuant to section 504 of the Rehabilitation Act of 1973; (ii)the vehicle used to furnish such transportation service is specially equipped or staffed to accommodate individuals who have not attained age 21 with developmental, physical, or mental health needs; and (iii)payment for such service is made only for costs directly attributable to costs associated with transporting individuals who have not attained age 21 and whose developmental, physical, or mental health needs require transport in such a vehicle in order to receive the services for which medical assistance is provided under the State plan. (B)

Rule of construction

Nothing in subparagraph (A) shall be construed as modifying the obligation of a State to ensure that an individual who has not attained age 21 and who is eligible for medical assistance under the State plan receives necessary transportation services to and from a provider of medical assistance in or through a program or setting other than an educational program or setting.

(b)

Requirements for the provision of Items and Services Through Medicaid Managed Care Organizations

(1)

Contractual requirements

Section 1903(m)(2) of the Social Security Act (42 U.S.C. 1396b(m)(2)) is amended— (A)in subparagraph (A), by inserting after clause (i) the following new clause:

(ii)the contract with the entity satisfies the requirements of subparagraph (C) (relating to payment for, and coverage of, such services under an individual's education program, an individualized family service plan, or when furnished in or through an educational program or setting);

; and

(B)by inserting after subparagraph (B), the following new subparagraph:

(C)For purposes of clause (ii) of subparagraph (A), the requirements of this subparagraph are the following: (i)The contract with the entity specifies the coverage and payment responsibilities of the entity in relation to medical assistance for items and services that are covered under the State plan and included in the contract, when such items and services are furnished in or through an educational program or setting. (ii)In any case in which the entity is obligated under the contract to pay for items and services covered under the State plan, the contract with the entity requires the entity to— (I)enter into a provider network service agreement with the qualified provider or providers furnishing such items or services in or through an educational program or setting; (II)promptly pay such providers at a rate that is at least equal to the rate that would be paid to a provider furnishing the same service in a non-educational program or setting; and (III)treat as final and binding determinations by State licensed providers or providers eligible for reimbursement under the State plan working in an educational program or setting regarding the medical necessity of an item or service. (iii)The contract with the entity specifies the obligation of the entity to ensure that providers of items or services that are furnished in or through an educational program or setting refer children furnished such items or services to the entity and its provider network for additional services that are not available in or through such program or setting but that are covered under the State plan and included in the entity's contract with the State. (iv)The contract with the entity requires, with respect to payment for, and coverage of, services for which the entity is responsible for, that the entity must demonstrate that the entity has established procedures to— (I)ensure coordination between the State, a local educational agency and the lead agency in the State with responsibility for administering part C of the Individuals with Disabilities Education Act with respect to those services for an individual who has not attained age 21 and who is eligible for medical assistance under the State plan (including an individual who has an individualized education program established pursuant to part B of the Individuals with Disabilities Education Act or otherwise or an infant or toddler with a disability who has an individualized family service plan established pursuant to part C of such Act) which are required for the individual under the individual’s education program or the individualized family service plan, or are furnished to the individual pursuant to section 504 of the Rehabilitation Act of 1973 and which are not specifically included in the services required under the contract, but are the responsibility of the State, a local educational agency, or the lead agency in the State with responsibility for administering part C of the Individuals with Disabilities Education Act; and (II)prevent duplication of services and payments under this title with respect to items and services covered under the State plan that are furnished in or through an educational program or setting to such individuals enrolled under the contract.

(2)

Prohibition on duplicative payments

(A)

In general

Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i)), as amended by subsection (a), is amended— (i)in paragraph (24)(B), by striking the period and inserting ; or; and (ii)by inserting after paragraph (24) the following new paragraph:

(25)with respect to any amount expended under the State plan for an item, service, or administrative cost for which payment is or may be made directly to a person or entity (including a State, local educational agency, or the lead agency in the State with responsibility for administering part C of the Individuals with Disabilities Education Act) under the State plan if payment for such item, service, or administrative cost was included in the determination of a prepaid capitation or other risk-based rate of payment to an entity under a contract pursuant to section 1903(m).

(B)

Conforming amendment

The third sentence of section 1903(i) of such Act (42 U.S.C. 1396b(i)), as amended by subsection (a)(1)(C), is amended by striking and (24) and inserting (24), and (25). (c)

Allowable Share of FFP With Respect to Payment for Services Furnished In or through an educational program or setting

Section 1903(w)(6) of the Social Security Act (42 U.S.C. 1396b(w)(6)) is amended— (1)in subparagraph (A), by inserting subject to subparagraph (C), after subsection,; and (2)by adding at the end the following new subparagraph:

(C)In the case of any Federal financial participation paid under subsection (a) with respect to an expenditure for an item or service provided under the plan, or for any administrative cost incurred to carry out the plan, that is furnished in or through an educational program or setting, the State shall provide that— (i)if 0 percent of the expenditure was made or the cost was incurred directly by the State, the State shall pay the local educational agency in the State or the lead agency in the State with responsibility for administering part C of the Individuals with Disabilities Education Act that made the expenditure or incurred the cost (and, if applicable, any consortium of public agencies that incurred costs in connection with the collection or submission of claims for such expenditures or costs), 100 percent (divided, as appropriate, between such agencies and such a consortium, if applicable) of the amount of the Federal financial participation; and (ii)if 100 or any lesser percent of the expenditure was made or the cost was directly incurred by the State, the State shall retain only such percentage of the Federal financial participation paid for the expenditure or cost as does not exceed the percentage of such expenditure or cost that was funded by State revenues that are dedicated solely for the provision of such medical assistance (and shall pay out of any remaining percentage of such Federal financial participation, the percentage due to the local educational agency in the State or the lead agency in the State with responsibility for administering part C of the Individuals with Disabilities Education Act that made or incurred the remaining percentage of such expenditure or cost (and, if applicable, any consortium of public agencies that incurred costs in connection with the collection or submission of claims for such expenditures or costs)).

(d)

Assurance of reimbursement for administrative, enrollment, and outreach activities conducted by local educational agencies

(1)

Medicaid

Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended by inserting after subsection (j) the following new subsection:

(k)Nothing in this title shall be construed as authorizing the Secretary to prohibit the State agency with responsibility for the administration or supervision of the administration of the State plan from entering into interagency agreements with local educational agencies under which such local educational agencies shall be reimbursed for the Federal share of amounts expended for administrative, enrollment, and outreach activities for which payment is made to the State under section 1903(a)(7), including with respect to such activities as are conducted for purposes of satisfying the requirements of subsection (a)(43).

(2)

SCHIP

Section 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended— (A)by redesignating subparagraphs (B) through (D) as subparagraphs (C) through (E), respectively; and (B)by inserting after subparagraph (A) the following new subparagraph:

(B)Section 1902(k) (relating to interagency agreements with local educational agencies for reimbursement for expenditures for administrative, enrollment, and outreach activities).

(e)

Clarification of coverage of epsdt and items and services furnished to a disabled child pursuant to section 504 of the rehabilitation act of 1973; definition of educational program or setting

Section 1903(c) of the Social Security Act (42 U.S.C. 1396b(c)) is amended— (1)by inserting (1) after (c); (2)by striking Education Act or and inserting Education Act,; (3)by inserting , or furnished to a child with a disability pursuant to section 504 of the Rehabilitation Act of 1973 before the period; and (4)by adding at the end the following new paragraphs:

(2)Nothing in this title shall be construed as prohibiting or restricting, or authorizing the Secretary to prohibit or restrict, payment under subsection (a) for the following items or services furnished in or through an educational program or setting, or costs incurred with respect to the furnishing of such items or services: (A)Medical assistance for items or services described in section 1905(a)(4)(B) (relating to early and periodic screening, diagnostic, and treatment services defined in section 1905(r)) and costs incurred for providing such items or services in accordance with the requirements of section 1902(a)(43). (B)Costs incurred for providing services related to the administration of the State plan, including providing information regarding the availability of, and eligibility for, medical assistance under the plan, and assistance with determinations of eligibility and enrollment and redeterminations of eligibility under the plan. (3)Nothing in this title shall be construed as prohibiting or restricting, or authorizing the Secretary to prohibit or restrict, payment under subsection (a) for medical assistance furnished in or through an educational program or setting or costs described in paragraph (2)(B) solely because— (A)the State utilizes an all-inclusive payment arrangement in making payments for medical assistance described in subsections (a) or (r) of section 1905; or (B)the State utilizes a cost allocation system that meets Federal requirements when paying for the cost of services described in section 1902(a)(43) or other administrative services directly related to the administration of the State plan. (4)(A)For purposes of this title, the term educational program or setting means any location in which the items or services included in a child's individualized education plan established pursuant to part B of the Individuals with Disabilities Education Act or otherwise, or in an infant's or toddler's individualized family service plan established pursuant to part C of such Act, are delivered, including the home, child care setting, or school of the child, infant, or toddler. (B)Such term includes— (i)any location in which an evaluation or assessment is conducted, in accordance with the requirements of section 1902(a)(43) and subsections (a)(4)(B) and (r) of section 1905, to determine if a child is a child with a disability under section 614 of the Individuals with Disabilities Education Act (20 U.S.C. 1414) who requires an individualized education program (IEP) under section 614(d) of such Act (20 U.S.C. 1414(d)) or if an infant or toddler is an infant or toddler with a disability under section 635(a)(3) of such Act (20 U.S.C. 1435(a)(3)) who requires an individualized family service plan under section 636 of such Act (20 U.S.C. 1436) and any location in which a reevaluation or reassessment of such a determination is conducted; and (ii)for purposes of subsection (m)(2)(C), any location in which items or services described in section 1905(a)(4)(B) (relating to early and periodic screening, diagnostic, and treatment services defined in section 1905(r)) are delivered and costs are incurred for providing such items or services in accordance with the requirements of section 1902(a)(43).

(f)

Assurance of compliance with Federal and State requirements

Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)) is amended— (1)in paragraph (69), by striking and at the end; (2)in paragraph (70)(B)(iv), by striking the period at the end and inserting ; and; and (3)by inserting after paragraph (70), the following new paragraph:

(71)provide that— (A)the State will establish procedures to ensure that— (i)any provider of an item or service covered under the plan that is furnished in or through an educational program or setting complies with all Federal and State requirements applicable to providers of such items or services under the plan; and (ii)any educational entity that is engaged in the provision of an activity described in paragraph (43) or any other activity that is directly related to the administration of the plan complies with all Federal and State requirements applicable for payment for such activity; and (B)the State will not furnish medical assistance for an item or service covered under the plan in or through an educational program or setting, or undertake any activity described in paragraph (43) or any other activity that is directly related to the administration of the plan in or through such a program or setting, unless the entity responsible for providing the item or service, or undertaking such an activity, in or through the educational program or setting will be paid under the State plan for the costs related to the furnishing of such item or service or the undertaking of such activity.

(g)

Uniform Methodology for Educational Program or Setting-Based Claims

(1)

In general

Not later than 90 days after the date of enactment of this Act, the Secretary of Health and Human Services and the Secretary of Education, acting jointly and in consultation with State medicaid directors, State educational agencies, local educational agencies, and State agencies with responsibility for administering part C of the Individuals with Disabilities Education Act, shall develop and implement a uniform methodology for claims for payment of medical assistance and related administrative costs furnished under title XIX of the Social Security Act in an educational program or setting. (2)

Requirements

The methodology developed under paragraph (1)— (A)shall not prohibit or restrict payment for medical assistance and administrative activities that are provided or conducted in accordance with section 1903(c) of the Social Security Act (42 U.S.C. 1396b(c)); and (B)with respect to administrative costs, shall be based on— (i)standards related to time studies and population estimates; and (ii)a national standard for determining payment for such costs. (h)

Effective Date

The amendments made by this section shall take effect on the date of enactment of this Act and shall apply to items and services provided and expenditures made on or after such date, without regard to whether implementing regulations are in effect.