[Federal Register Volume 88, Number 96 (Thursday, May 18, 2023)]
[Proposed Rules]
[Pages 31659-31667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-10542]


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DEPARTMENT OF EDUCATION

34 CFR Part 300

[Docket ID ED-2022-OSERS-0052]
RIN 1820-AB82


Assistance to States for the Education of Children With 
Disabilities

AGENCY: Office of Special Education and Rehabilitative Services, 
Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to amend regulations under Part B of 
the Individuals with Disabilities Education Act (Part B of IDEA or the 
Act) that govern the Assistance to States for the Education of Children 
with Disabilities program, including the Preschool Grants program. 
Specifically, the Secretary proposes to amend the IDEA Part B 
regulations to remove the requirement for public agencies to obtain 
parental consent prior to accessing for the first time a child's public 
benefits or insurance (e.g., Medicaid, Children's Health Insurance 
Program (CHIP)) to provide or pay for required IDEA Part B services. As 
there are no comparable consent requirements prior to accessing public 
benefits for children without disabilities, the removal of this consent 
requirement would align public benefits consent requirements for 
children with disabilities to those for children without disabilities 
and ensure equal treatment of both groups of children.

DATES: We must receive your comments on or before August 1, 2023.

ADDRESSES: Comments must be submitted via the Federal eRulemaking 
Portal at regulations.gov. However, if you require an accommodation or 
cannot otherwise submit your comments via regulations.gov, please 
contact the program contact person listed under FOR FURTHER INFORMATION 
CONTACT. The Department will not accept comments by fax or by email, or 
comments submitted after the comment period closes. To ensure that the 
Department does not receive duplicate copies, please submit your 
comments only once. Additionally, please include the Docket ID at the 
top of your comments.
    Federal eRulemaking Portal: Please go to www.regulations.gov to 
submit your comments electronically. Information on using 
Regulations.gov, including instructions for finding a rule on the site 
and submitting comments, is available on the site under ``FAQ.''
    Note: The Department's policy is to generally make comments 
received from members of the public available for

[[Page 31660]]

public viewing at www.regulations.gov. Therefore, commenters should 
include in their comments only information about themselves that they 
wish to make publicly available.

FOR FURTHER INFORMATION CONTACT: Rebecca Walawender, U.S. Department of 
Education, 400 Maryland Ave. SW, Room 5130, Potomac Center Plaza, 
Washington, DC 20202. Telephone: (202) 245-7399. Email: 
[email protected].
    If you are deaf, hard of hearing, or have a speech disability and 
wish to access telecommunications relay services, please dial 7-1-1.

SUPPLEMENTARY INFORMATION:
    Invitation to Comment: We invite you to submit comments regarding 
this proposed regulation. To ensure that your comments have maximum 
effect in developing the final regulation, we urge you to clearly 
identify the specific section or sections of the proposed regulation 
that each of your comments addresses.
    Directed Questions: As currently drafted, the proposed regulatory 
language would retain the requirement to include in the written 
notification to parents the ``no cost'' provisions in 34 CFR 
300.154(d)(2)(i) through (iii). We invite your comments on the 
following questions relating to the written notification related to the 
``no cost'' provisions in Sec.  300.154(d)(2)(i) through (iii),\1\ 
which will continue to remain in effect and would not be changed by 
this proposed regulatory action:
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    \1\ IDEA requires that special education, related services and 
supplementary aids and services are provided at no-cost to a child 
or their family. IDEA calls this a Free Appropriate Public Education 
in Sec.  300.17. The no cost provisions in 300.154(d)(2)(ii) through 
(iii) are unallowable examples where accessing public benefits would 
incur costs to the family, including co-pays, deductibles, and 
increased premiums.
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    1. Should the ``no cost'' provisions in Sec.  300.154(d)(2)(i) 
through (iii) continue to be included in the written notification to 
parents prior to accessing the child's public benefits or insurance for 
the first time and annually thereafter?
    2. Should the ``no cost'' provisions in Sec.  300.154(d)(2)(i) 
through (iii) be included in the written notification to parents prior 
to accessing the child's public benefits or insurance for the first 
time, but removed in annual written notifications thereafter?
    3. Should the ``no cost'' provisions in Sec.  300.154(d)(2)(i) 
through (iii) be removed from the written notification to parents 
altogether?
    We invite you to assist us in complying with the specific 
requirements of Executive Orders 12866 and 13563 and their overall 
requirement of reducing regulatory burden that might result from this 
proposed regulation. Please let us know of any further ways we could 
reduce potential costs or increase potential benefits while preserving 
the effective and efficient administration of the Department's programs 
and activities. The Department also welcomes comments on any 
alternative approaches to the subjects addressed in the proposed 
regulation.
    During and after the comment period, you may inspect public 
comments about this proposed regulation by accessing Regulations.gov.
    Assistance to Individuals with Disabilities in Reviewing the 
Rulemaking Record: On request, we will provide an appropriate 
accommodation or auxiliary aid to an individual with a disability who 
needs assistance to review the comments or other documents in the 
public rulemaking record for the proposed regulation. To schedule an 
appointment for this type of accommodation or auxiliary aid, please 
contact the person listed under FOR FURTHER INFORMATION CONTACT.

Background

Prior Actions

    Since IDEA's reauthorization in 2004, the Department has on 
multiple occasions examined the administrative steps that must be taken 
when a public agency seeks to access a child's or parent's public 
benefits or insurance (such as Medicaid) to pay for services required 
under IDEA Part B for children with disabilities. In 2006, the 
Department enacted IDEA Part B regulations that required a public 
agency to obtain parental consent each time the agency seeks access to 
a child's or parent's public benefits or insurance. 34 CFR 
300.154(d)(2)(iv). See 71 FR 46539, 46772 (Aug. 14, 2006). This 
regulatory provision was further clarified through nonregulatory 
guidance. Because the regulation appeared to require consent every time 
a service was provided (if, for example, a child's individualized 
education program (IEP) included a service covered by public insurance 
that was provided multiple times each week, then consent would be 
required each time the service was delivered), in 2007 the Department 
advised that a public agency alternatively could obtain parental 
consent under Sec.  300.154 for a specific time period (e.g., annual 
consent). Office of Special Education Programs (OSEP) Memo 07-10.\2\ 
Further, the Department noted that consent was required under Sec.  
300.154 if the public agency sought to use such benefits for additional 
hours of service (if, for example, the IEP was revised or extended) or 
sought to charge different amounts for the services. OSEP Memo 07-10.
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    \2\ https://sites.ed.gov/idea/files/idea/policy/speced/guid/idea/memosdcltrs/osep07-10interpretationof34cfr300154.pdf.
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    In 2013, the Department revised Sec.  300.154 to its current form. 
78 FR 10525 (Feb. 14, 2013). As currently written, the provision 
requires a one-time initial parental consent after the public agency 
has given written notification of its intent to access the child's or 
parent's public benefits or insurance, and annual written notification 
thereafter. 34 CFR 300.154(d)(2)(iv) and (v). Such consent is to permit 
the use of public benefits or insurance to seek the appropriate 
reimbursement for the appropriate service. Id. The consent requirement 
in 34 CFR 300.154(d)(2) is separate from, and in addition to, the 
parental consent requirements under both Part B of the IDEA (34 CFR 
300.622) and the Family Educational Rights and Privacy Act (FERPA) (20 
U.S.C. 1232g and 34 CFR 99.30), which require the participating agency 
(usually the local educational agency (LEA)) to obtain parent consent 
to disclose personally identifiable information (PII) to a public 
benefits or public insurance agency for billing purposes. This consent 
requirement is separate from and does not change the parental consent 
required for the initial evaluation to determine whether a child is a 
child with a disability under IDEA (34 CFR 300.300(a)), consent for the 
initial provision of special education and related services under IDEA 
(34 CFR 300.300(b)), consent for the reevaluation of a child with a 
disability (34 CFR 300.300(c)), or consent to disclose PII to a State 
entity for Medicaid billing under either FERPA (34 CFR part 99) or IDEA 
(34 CFR 300.622).
    In the 2013 rulemaking, several commenters asked the Department to 
remove the consent process to reduce administrative burden and increase 
access to Medicaid reimbursement for services required under IDEA. At 
that time, the Department acknowledged the importance of reducing 
funding barriers and streamlining consent requirements specific to IDEA 
Part B, and ultimately added both the initial consent requirement 
(removing the requirement that consent be obtained each time access to 
public benefits or insurance is

[[Page 31661]]

sought) and the parental notification requirement in Sec.  300.154(d). 
Based on the Department's oversight and administration of IDEA since 
that time as well as continued stakeholder concerns regarding the 
barriers this requirement imposes on accessing public benefits and 
insurance,\3\ and for the reasons described below, the Secretary no 
longer believes the initial consent requirement in Sec.  300.154 is 
necessary, given the existing regulatory protections in IDEA Part B and 
FERPA that protect the privacy rights of parents and students as well 
as the ``no-cost'' protections in the notification provisions in Sec.  
300.154. The Secretary thus proposes to rescind the Department's 
current requirements in Sec.  300.154(d)(2)(iv) and revise the 
requirements in current Sec.  300.154(d)(2)(v).
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    \3\ See Obtraining Parenal Consent to Bill Medicaid: An 
Unnecessary, Time-Consuming and Emotionally Fraught Process for 
Districts and Parents, a report jointly issued by the School 
Superintendents Association, the Association of Educational Services 
Agencies and the National Allicance for Medicaid in Education. 
https://www.aasa.org/docs/default-source/advocacy/medicaid-parental-consent-2023.pdf?sfvrsn=f8d706b2_3.
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Administration's Policy Priorities

    The Biden-Harris Administration has established a clear policy goal 
to increase access to health and mental health services. The 
Administration's mental health strategy is focused on three elements: 
strengthening system capacity, connecting people to care, and creating 
a continuum of support.\4\ Increasing access to needed health and 
mental health services that can be delivered to students at school is a 
key element of this policy goal.
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    \4\ See The White House, ``Fact Sheet: President Biden to 
Announce Strategy to Address Our National Mental Health Crisis, as 
Part of Unity Agenda In His First State of The Union'' (Mar. 1, 
2022). https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/01/fact-sheet-president-biden-to-announce-strategy-to-address-our-national-mental-health-crisis-as-part-of-unity-agenda-in-his-first-state-of-the-union/.
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    Consistent with section 11003 of the Bipartisan Safer Communities 
Act and Executive Orders 14009, Strengthening Medicaid and the 
Affordable Care Act and 14070 Continuing to Strengthen Americans' 
Access to Affordable, Quality Health Coverage, the Biden-Harris 
Administration is committed to strengthening and increasing access to 
school-based health services. Section 11003 of the Bipartisan Safer 
Communities Act requires the Department, along with the U.S. Department 
of Health and Human Services, to collaborate to eliminate barriers to 
the delivery of Medicaid services to enrolled children. Public Law 117-
159. To this end, the Departments are jointly developing policies that 
will increase access to school-based health services for children who 
are enrolled in Medicaid.
    Now, more than ever, ensuring access to school-based Medicaid 
services for children with disabilities is essential. Recent research 
from the Substance Abuse and Mental Health Services Agency (SAMHSA) 
shows that individuals of low-socioeconomic status are more vulnerable 
during and after a disaster (e.g., pandemics or catastrophic weather 
events), including by living in fragile housing, having difficulty 
accessing resources after a disaster, and experiencing trauma both 
during and after a disaster.\5\ Our Nation's youth generally are 
experiencing unprecedented mental health challenges. As described in 
the Biden-Harris Administration's mental health strategy, ``Our youth 
have been particularly impacted as losses from COVID and disruptions in 
routines and relationships have led to increased social isolation, 
anxiety, and learning loss. More than half of parents express concern 
over their children's mental well-being.'' \6\
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    \5\ Substance Abuse and Mental Health Services Agency, Disaster 
Technical Assistance Center Supplemental Research Bulletin, 
``Greater Impact: How Disasters Affect People of Low Socioeconomic 
Status'' (July 2017). Available at: https://www.samhsa.gov/sites/default/files/dtac/srb-low-ses_2.pdf.
    \6\ Id. The Unity Agenda also noted that, ``[i]n 2019, one in 
three high school students and half of female students reported 
persistent feelings of sadness or hopelessness, an overall increase 
of 40 percent from 2009. Emergency department visits for attempted 
suicide have risen 51 percent among adolescent girls.''
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    Children with disabilities are disproportionately and significantly 
more affected by these challenges. Data in the Department's report on 
Supporting Child and Student Social, Emotional, Behavioral and Mental 
Health Needs \7\ indicate that, compared to students without 
disabilities, children and students with disabilities experience higher 
rates of mental health challenges, including anxiety, depression, 
academic-related stress, suicidal ideation, suicide attempts, non-
suicidal self-injury, and peer victimization. Fragmented delivery 
systems and policy and funding gaps make this mental health crisis more 
challenging to address. Id. The report recommends establishing an 
integrated framework of educational, social, emotional, and behavioral 
health support for all and to leverage policy and funding.
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    \7\ U.S. Department of Education, Office of Special Education 
and Rehabilitative Services, ``Supporting Child and Student Social, 
Emotional, Behavioral, and Mental Health Needs,'' (2021). Available 
at: https://www2.ed.gov/documents/students/supporting-child-student-social-emotional-behavioral-mental-health.pdf.
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Medicaid Funding in Schools

    Medicaid is one of our Nation's primary sources of funding for 
health and mental health services for children with and without 
disabilities, covering approximately 41.6 million children and 42 
percent of all childbirths,\8\ and funding health and mental health 
services in schools. Under Medicaid's Early Periodic Screening 
Diagnosis and Treatment benefit, eligible children can receive 
comprehensive primary health, mental health and behavioral health 
services.\9\ In 2014 guidance to State Medicaid Directors (SMDs), the 
Centers for Medicare & Medicaid Services (CMS) clarified that Medicaid 
payment is permitted for any covered services provided to Medicaid-
eligible beneficiaries as long as they are delivered by Medicaid-
qualified providers.\10\ That guidance was intended to facilitate 
access to quality healthcare services within school settings and 
improve the health of communities, and ensure that Medicaid 
reimbursement is available for covered services that are provided to 
Medicaid beneficiaries, regardless of whether there is any charge for 
the service to the beneficiary or the community at large.\11\
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    \8\ See December 2022 Medicaid & CHIP Enrollment Data Highlights 
https://www.medicaid.gov/medicaid/program-information/medicaid-and-
chip-enrollment-data/report-highlights/
index.html#:~:text=92%2C340%2C585%20individuals%20were%20enrolled%20i
n,individuals%20were%20enrolled%20in%20CHIP and National Vital 
Statistics Reports Volume 70, Number 2, March 23 Births: Final Data 
for 2019 (cdc.gov).
    \9\ https://www.medicaid.gov/federal-policy-guidance/downloads/sbscib081820222.pdf.
    \10\ SMD# 14-006. Available at: https://www.medicaid.gov/federal-policy-guidance/downloads/smd-medicaid-payment-for-services-provided-without-charge-free-care.pdf.
    \11\ SMD# 14-006. Available at: https://www.medicaid.gov/federal-policy-guidance/downloads/smd-medicaid-payment-for-services-provided-without-charge-free-care.pdf.
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    Many children with disabilities receiving services under IDEA are 
also enrolled in Medicaid due to their disability status and/or based 
on their family income. Children with disabilities and special health 
care needs are more likely to be low-income, and those covered by 
Medicaid are more likely to have greater health care needs than those 
who are covered by private insurance.\12\ Further, the COVID-19

[[Page 31662]]

pandemic has limited access to critical services for children with 
disabilities and other vulnerable populations.\13\ To meet the 
Administration's goal of increasing access to health and mental health 
services, it is imperative to specifically address barriers to 
accessing funding and Medicaid services for low-income children with 
disabilities.
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    \12\ Williams, Elizabeth & Musumeci, MaryBeth (2021). ``Children 
with Special Health Care Needs: Coverage, Affordability, and HCBS 
Access.'' Kaiser Family Foundation. Available at: https://www.kff.org/medicaid/issue-brief/children-with-special-health-care-needs-coverage-affordability-and-hcbs-access/.
    \13\ U.S. Department of Education, Office of Special Education 
and Rehabilitative Services, ``Supporting Child and Student Social, 
Emotional, Behavioral, and Mental Health Needs,'' (2021). Available 
at: https://www2.ed.gov/documents/students/supporting-child-student-social-emotional-behavioral-mental-health.pdf. See also: U.S. 
Department of Education, Office for Civil Rights. ''Education in a 
Pandemic: The Disparate Impacts of COVID-19 on America's Students,'' 
(2021). Available at: https://www2.ed.gov/about/offices/list/ocr/docs/20210608-impacts-of-covid19.pdf.
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    IDEA requires public agencies to make a free appropriate public 
education (FAPE) available to all eligible children with disabilities, 
which means, among other things, that the services identified on a 
child's IEP must be provided at public expense and without charge to 
the child or the child's parents. A public agency may access a child's 
or parent's public benefits or insurance to pay for IDEA Part B 
services, but this requires the agency to share PII about the child in 
question with the agency or entity managing the benefits. IDEA 
contemplates that public agencies should, in appropriate circumstances, 
access public benefits and insurance programs to help pay for services 
required under Part B, while reaffirming the requirement that such 
services be delivered at no cost to parents.

Equal Treatment of Children With and Without Disabilities

    Medicaid regulations do not require Medicaid agencies or providers 
(such as schools) to obtain consent from the beneficiary or family 
member prior to exchanging the individual's information for a purpose 
directly connected to the administration of the Medicaid State plan, 
which includes billing Medicaid for providing services to the 
beneficiaries. 42 CFR 431.306. Instead, the act of enrolling a child or 
parent in Medicaid serves as consent for Medicaid providers to access 
public benefits for billing purposes. For children with disabilities, 
however, regardless of Medicaid, FERPA (34 CFR 99.30) and IDEA (34 CFR 
300.622) require parental consent before disclosing PII, and the 
transfer of PII is often a necessary step in billing Medicaid. In 
addition, for Medicaid-eligible children with disabilities, current 
IDEA requirements in Sec.  300.154(d)(2)(iv) and (v) require schools to 
secure parental consent to bill Medicaid before seeking reimbursement 
for services identified on a child's IEP. This last regulatory 
requirement does not exist to access Medicaid for services provided to 
Medicaid-eligible children without disabilities. Rescinding 34 CFR 
300.154(d)(2)(iv) and revising 34 CFR 300.154(d)(2)(v), while 
maintaining existing PII disclosure protections in FERPA (34 CFR 99.30) 
and IDEA (34 CFR 300.622), would ensure equal treatment of Medicaid 
beneficiaries, reduce administrative burden, and eliminate a barrier to 
reimbursement.
    Reimbursement of health care costs through school-based Medicaid 
claims can be an important source of financial support for public 
agencies providing school-based services. According to the Medicaid 
Financial Management Report, in FY 2021,\14\ $4,280,950,805 was 
expended for school-based services and funded through Medicaid's 
Medical Assistance Program, and an additional $1,699,326,212 in school-
based administration costs were reimbursed through Medicaid. By 
increasing the ability of public agencies to bill Medicaid for school-
based services, this proposed change would increase the overall level 
of financial support for public agencies, and would increase the 
funding available to State and local educational agencies to provide 
important services and supports to students under the IDEA.
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    \14\ https://www.medicaid.gov/medicaid/financial-management/downloads/financial-management-report-fy2021.zip.
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    Section 300.154. Methods of Ensuring Services Statute: 20 U.S.C. 
1412(a)(12) requires, as a condition of eligibility for an IDEA Part B 
grant award, each State to provide assurances that it has a statute, 
regulation, an interagency agreement or other appropriate written 
mechanism for interagency coordination that is in effect to identify 
the financial responsibility of non-educational public agencies for 
providing services required to ensure FAPE to children with 
disabilities, and that the financial responsibility of those agencies, 
including the State Medicaid agency and other public insurers of 
children with disabilities, precedes the financial responsibility of 
the LEA or the State agency responsible for developing the child's IEP. 
This requirement is consistent with IDEA's payor of last resort 
requirements in IDEA sections 612(e) and 640(c) and section 1903(c) of 
the Medicaid statute, which state that as between Federal IDEA funds 
and Medicaid, Medicaid is the payor of first resort.
    Current Regulations: Section 300.154(d)(2)(iv) requires a public 
agency to obtain a one-time consent from the parent, after providing 
written notification, before accessing the child's or the parent's 
public benefits or insurance for the first time. This consent must 
specify PII that may be disclosed, the purpose of the disclosure, and 
the agency to which the disclosure may be made. See Sec. Sec.  99.30 
and 300.622. The consent also must specify that the parent understands 
and agrees that the public agency may access the child's or parent's 
public benefits or insurance to pay for IDEA Part B services.
    Section 300.154(d)(2)(v) requires that the written notification to 
the child's parents be consistent with Sec.  300.503(c)--that is, be in 
a language understandable to the general public, and in the native 
language of the parent or other mode of communication used by the 
parent (unless it is clearly not feasible to do so). The notification 
must be provided before accessing the child's or the parent's public 
benefits or insurance for the first time, prior to obtaining the one-
time parental consent, and annually thereafter. The written 
notification must include: (1) a statement of the parental consent 
provisions in Sec.  300.154(d)(2)(iv)(A) and (B); (2) a statement of 
the ``no cost'' provisions under Sec.  300.154(d)(2)(i) through (iii) 
informing the parent that the agency may not require parents to enroll 
in Medicaid, may not require parents to incur an out-of-pocket expense 
incurred in filing a claim for services, and may not use a child's 
Medicaid benefits if that use would decrease lifetime coverage or any 
other insured benefit, result in the family paying for services that 
would otherwise be covered by Medicaid and that are required for the 
child outside of the time the child is in school, increase premiums or 
lead to discontinuation of benefits or insurance, or risk loss of 
eligibility for home and community-based waivers; (3) a statement that 
the parents have the right to withdraw consent to disclosure of their 
child's PII to the agency responsible for the administration of the 
State's public benefits or insurance program at any time; and (4) a 
statement that refusal to provide consent or withdrawal of consent to 
disclose PII to the agency responsible for the administration of the 
State's public benefits or insurance program does not relieve the 
public agency of its responsibility to ensure that all required 
services are provided at no cost to the parents.

[[Page 31663]]

    Proposed Regulations: We propose to rescind current Sec.  
300.154(d)(2)(iv), which would remove the requirement for parental 
consent prior to accessing a child's or parent's public benefits or 
insurance for the first time.
    We propose to revise the current parental notification requirements 
in Sec.  300.154(d)(2)(v). The revised provision would continue to 
state that the required parental notification must be consistent with 
Sec.  300.503(c), and it would still include a statement of the ``no 
cost'' provisions in current Sec.  300.154(d)(2)(i) through (iii). The 
proposed revision of Sec.  300.154(d)(2)(v) would modify the reference 
to parental consent, to confirm that parental consent to disclose PII 
is required separately under Sec. Sec.  99.30 and 300.622 and that 
parents retain all applicable privacy rights under those provisions. 
Section 300.154(d)(2)(v) would be further revised to no longer require 
the following two statements: a statement that the parents have the 
right to withdraw consent to disclose their child's PII to the agency 
responsible for the administration of the State's public benefits or 
insurance program at any time; and a statement that refusal to provide 
consent or withdrawal of consent to disclose PII to the agency 
responsible for the administration of the State's public benefits or 
insurance program does not relieve the public agency of its 
responsibility to ensure that all required services are provided at no 
cost to the parents. It is important to note that nothing in this 
proposed regulation will change or diminish parents' rights to consent 
to an evaluation under IDEA or the initial provision of special 
education and related services under IDEA.
    Reasons: In light of the challenges described in the ``Background'' 
section, and consistent with the Administration's priorities, the 
Secretary believes that the Department should eliminate regulatory 
provisions that present unnecessary barriers to public agencies seeking 
Medicaid reimbursement for school-based Medicaid services provided to 
children receiving special education and related services under IDEA 
Part B, particularly where such barriers do not exist for similarly 
situated children without disabilities. The one-time consent provision 
in Sec.  300.154(d)(2)(iv) represents such a barrier. As discussed 
further below, that provision slows down or may prevent public agencies 
from accessing available funding for needed IDEA services without 
providing any additional protection to families.
    Federal regulations do not prohibit public agencies from accessing 
a child's or parent's public benefits or insurance to pay for special 
education and related services if such use would not result in 
additional costs to the parent or reduce benefits to the child. To 
maximize public agencies' access to Federal Medicaid funds, the 
proposed regulations would no longer require the public agency to 
obtain parental consent prior to accessing a child's or parent's public 
benefits or insurance for the first time, other than the consent to 
release PII that already is required consistent with part 99 and Sec.  
300.622. Public agencies would continue to be required to provide 
written notification to parents prior to accessing a child's or 
parent's public benefits or insurance for the first time and annually 
thereafter. The timing of the written notification to the parent would 
continue to be at the agency's discretion, so long as the first such 
written notification is given before the public agency seeks access to 
the child's or parent's public benefits or insurance for the first 
time.
    These changes would align Medicaid billing for children with and 
without disabilities, while retaining important protections for 
children and families. The privacy rights of children with disabilities 
remain important to the Department, and, as noted above, the Department 
would retain written consent protections under FERPA and the IDEA Part 
B regulations that require a public agency to obtain written consent 
before disclosing PII from a child's education records. See 34 CFR 
99.30 (FERPA), 300.622 (IDEA). In addition, parents remain protected by 
the IDEA ``no-cost'' regulations that prohibit public agencies from 
requiring parents to enroll in public benefits or insurance in order 
for their child to receive FAPE and using public benefits or insurance 
to pay for special education and related services if such use would 
result in additional specific costs to the parent or reduce benefits to 
the child. See Sec.  300.154(d)(2)(i)through (iii). Finally, we propose 
to retain an annual notification requirement in Sec.  300.154(d)(2)(v), 
which would include written notification of the ``no-cost'' provisions 
described above. Preserving such notification would ensure that the 
child's parents are continually informed of their rights and 
protections under the IDEA.
    The proposed amendment to Sec.  300.154(d)(2) would help address 
unequal funding access for certain Medicaid services that are available 
to both children with disabilities and children without disabilities 
(as covered services may be delivered to all Medicaid-enrolled 
students). As noted above, CMS' 2014 guidance clearly indicated that 
Medicaid funds could be used to pay for services furnished to Medicaid-
eligible students, even if the services were provided within a school 
at no cost to such students. The IDEA one-time consent provision within 
current Sec.  300.154(d)(2)(iv) creates a barrier to accessing Medicaid 
for IDEA-eligible children that does not exist for non-IDEA-eligible 
children. The Secretary believes it is inappropriate to maintain such a 
barrier in light of the Biden-Harris Administration's goals of 
increasing access to health and mental health services for all youth.
    Reducing the administrative burden for all parties is consistent 
with the Administration's goals and the Bipartisan Safer Communities 
Act's directive to increase access to Medicaid funding for health 
services in schools. With this change, parents would continue to retain 
their privacy rights and schools would have greater access to an 
important funding stream to support the provision of FAPE to eligible 
children with disabilities.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    Under Executive Order 12866, the Office of Management and Budget 
(OMB) must determine whether this regulatory action is ``significant'' 
and, therefore, subject to the requirements of the Executive order and 
subject to review by OMB. Section 3(f) of Executive Order 12866 defines 
a ``significant regulatory action'' as an action likely to result in a 
rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local, or 
Tribal governments or communities in a material way (also referred to 
as an ``economically significant'' rule);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in the 
Executive order.
    This proposed regulatory action is not a significant regulatory 
action subject to review by OMB under section 3(f) of Executive Order 
12866.
    We have also reviewed the proposed regulation under Executive Order 
13563, which supplements and

[[Page 31664]]

explicitly reaffirms the principles, structures, and definitions 
governing regulatory review established in Executive Order 12866. To 
the extent permitted by law, Executive Order 13563 requires that an 
agency--
    (1) Propose or adopt regulations only on a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing the proposed regulation only on a reasoned 
determination that its benefits would justify its costs. We are issuing 
this proposed regulation after conducting a policy review per the 
Bipartisan Safer Communities Act and determining that the proposed 
changes closely adhere to policy goals of the Biden-Harris 
Administration. In choosing among alternative regulatory approaches, we 
selected the approach that maximizes net benefits. Based on the 
analysis that follows, the Department believes that this regulation is 
consistent with the principles in Executive Order 13563.
    We also have determined that this regulatory action does not unduly 
interfere with State, local, or Tribal governments in the exercise of 
their governmental functions.
    In accordance with both Executive orders, the Department has 
assessed the potential costs and benefits, both quantitative and 
qualitative, of this regulatory action. The potential costs associated 
with this regulatory action are those resulting from statutory 
requirements and those we have determined as necessary for 
administering the Department's programs and activities. The potential 
benefits for LEAs include reduced administrative burden associated with 
the removal of the additional Federal consent requirement, and 
increased revenue for schools to enhance programs for students with 
disabilities and the provision of IDEA services as a result of 
leveraging Medicaid funding.

Discussion of Costs and Benefits

    The Department has reviewed these proposed regulations to assess 
their potential impact. Based on the information provided by States in 
the Federal fiscal year 2020 State Performance Plan/Annual Performance 
Report,\15\ the Department determined that approximately 524,652 
children were found eligible for special education in school year 2020-
2021. Data indicates that 56 percent of children with disabilities are 
covered through Medicaid or the Children's Health Insurance Program. 
Therefore approximately 293,805 of these children are determined to be 
eligible for Medicaid in the 2020-2021 school year. As a result, we 
assume 524,652 new students will enroll in IDEA Part B each year, of 
which 293,805 would be eligible for Medicaid. As detailed further 
below, we estimate that the reduced administrative burden associated 
with the removal of IDEA Medicaid consent requirements would have an 
initial first-year cost of $2,484,856 and initial first-year benefit of 
$5,981,870. For the first ten years, the overall benefit to impacted 
agencies and individuals would be $39,691,856 using a 7 percent 
discount rate and $48,614,083 using a 3 percent discount rate. This 
estimate assumes that all 51 State educational agencies \16\ (SEAs) 
currently accessing Medicaid to pay for covered services utilize a 
joint form for requesting FERPA and IDEA parent consent to disclose PII 
under Part B of IDEA (Sec.  300.622) and FERPA (Sec.  99.30).
---------------------------------------------------------------------------

    \15\ https://aspe.hhs.gov/sites/default/files/documents/77d7cc41648a371e0b5128f0dec2470e/aspe-childrens-health-coverage.pdf.
    \16\ Under Part B of the IDEA, there are 60 SEAs, which include 
the 50 States, the District of Columbia, Puerto Rico, the Bureau of 
Indian Education, the outlying areas (the U.S. Virgin Islands, Guam, 
American Samoa, and the Commonwealth of the Northern Mariana 
Islands), and the freely associated States (the Marshall Islands, 
the Federated States of Micronesia, and the Republic of Palau). For 
the purposes of this regulatory impact analysis, we include only the 
50 States and the District of Columbia, which represent the SEAs 
that access Medicaid to pay for covered services.
---------------------------------------------------------------------------

Costs

    We estimate that costs of this proposed rule to state educational 
agencies (SEAs) would account for $60,792 of our total estimated first-
year costs of $2,484,856. We assume that an Education Administrator and 
lawyer from each SEA would require two hours each to read and 
understand the proposed rule. We estimate that the cost per SEA of 
these proposed regulatory changes would be no more than $525, for a 
national cost of $26,775. In addition, we assume that it would take no 
more than 3 hours per SEA for a lawyer to revise the joint SEA IDEA and 
FERPA consent forms; we estimate the cost of revising the consent form 
to be no more than $427 per SEA, for a national cost of $21,777. We 
assume it would take 2 hours for an Education Administrator to draft 
guidance to LEAs on the revisions to consent forms and impact on LEAs; 
we estimate the cost of providing guidance to SEAs to be $240 per SEA, 
for a national cost of $12,240. These estimates are calculated using 
average national wage rates for Education Administrators employed by 
States of $120.15 \17\ and lawyers employed by State governments of 
$142.34.\18\
---------------------------------------------------------------------------

    \17\ As reported in the national Compensation Survey, May 2021 
National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm#00-0000) with 100 percent loaded 
wage rate.
    \18\ As reported in the national Compensation Survey, May 2021 
National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm#00-0000) with 100 percent loaded 
wage rate.
---------------------------------------------------------------------------

    We estimate that costs of this proposed rule to LEAs would account 
for $2,424,064 of our total estimated first-year costs of $2,484,856. 
We assume that, for each of the 17,824 LEAs,\19\ an Education 
Administrator would require 30 minutes and an Administrative Assistant 
from each LEA would require two hours to ensure LEA forms align with 
revised State forms. We estimate that the cost per LEA for ensuring 
that LEA consent forms align with revised SEA forms would be no more 
than $136, for a national cost of $2,424,064. These estimates are

[[Page 31665]]

calculated using average national wage rates for education 
administrators employed by local governments of $118.58 \20\ and 
administrative assistants employed by local governments of $38.54.\21\
---------------------------------------------------------------------------

    \19\ As reported in the National Center for Education 
Statistics, Common Core of Data Elementary/Secondary Information 
System table generator with data compiled from a district based 
table with the following filters applied: 2021-22 school year, 50 
States plus Washington, DC, excludes records with missing values, 
and includes districts with enrollment greater than zero.
    \20\ As reported in the national Compensation Survey, May 2021 
National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm#00-0000) with 100 percent loaded 
wage rate.
    \21\ As reported in the national Compensation Survey, May 2021 
National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm#00-0000) with 100 percent loaded 
wage rate.
---------------------------------------------------------------------------

Benefits

    Overall, the Department estimates the proposed regulations would 
result in cost savings of $5,981,870 during the first year due to a 
reduction in time and effort on the part of both LEA staff and parents. 
We estimate that, as a result of this proposed rule, cost reductions to 
LEAs equal to $4,924,172 and benefits to parents equal to $1,057,698 
during the first year. We assume that for each of the 293,805 new 
students eligible to receive services under Medicaid, Special Education 
Teachers and parents would benefit as a result of this proposed rule 
due to time saved resulting from the removal of IDEA requirements from 
standard Medicaid consent forms. We estimate a benefit to LEAs of 
$16.76 per student, for a national benefit of $4,924,172 for time saved 
(15 minutes saved for each eligible student), because it would take 
Special Education Teachers less time to explain and review the IDEA-
specific sections of Medicaid consent forms. We estimate a benefit to 
parents of $3.60 per student, for a national benefit of $1,057,698, due 
to a reduction in time required for a parent to review and understand 
the IDEA-specific sections of Medicaid consent forms. These estimates 
are calculated using the average national wage rate for special 
education teachers employed by local governments of $67.05 \22\ and, 
for parents, the 25th percentile of the average national wage rate for 
all occupations of $14.40.\23\
---------------------------------------------------------------------------

    \22\ As reported in the national Compensation Survey, May 2021 
National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm#00-0000) with 100 percent loaded 
wage rate.
    \23\ As reported in the national Compensation Survey, May 2021 
National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm#00-0000) without loading.
---------------------------------------------------------------------------

    Elsewhere in this section under Paperwork Reduction Act of 1995, we 
identify and explain burdens specifically associated with information 
collection requirements.

Alternatives Considered

    The Department reviewed and assessed various alternatives to the 
proposed regulations. The Department considered removing both the 
consent requirement and the notice provision. The Department also 
considered maintaining the current regulations requiring the one-time 
consent prior to the first time an LEA sought to bill a child or 
parent's public benefits or insurance and the notification provision 
prior to and an annually thereafter. The Department determined that 
removing the one-time consent and retaining the annual notification was 
the most efficient option to decrease administrative burden, ensure 
equal treatment of Medicaid-eligible children with disabilities and 
their nondisabled peers, and maintain transparency for parents.

Clarity of the Regulation

    Executive Order 12866 and the Presidential memorandum ``Plain 
Language in Government Writing'' require each agency to write 
regulations that are easy to understand. The Secretary invites comments 
on how to make the regulation easier to understand, including answers 
to questions such as the following:
     Are the requirements in the proposed regulation clearly 
stated?
     Does the proposed regulation contain technical terms or 
other wording that interferes with its clarity?
     Does the format of the proposed regulation (use of 
headings, paragraphing, etc.) aid or reduce its clarity?
     Would the proposed regulation be easier to understand if 
we divided it into more (but shorter) sections? (A ``section'' is 
preceded by the symbol ``Sec.  '' and a numbered heading; for example, 
Sec.  106.9 Dissemination of policy.)
     Could the description of the proposed regulation in the 
SUPPLEMENTARY INFORMATION section of this preamble be more helpful in 
making the proposed regulation easier to understand? If so, how?
     What else could we do to make the proposed regulation 
easier to understand?
    To send any comments that concern how the Department could make 
these proposed regulations easier to understand, see the instructions 
in the ADDRESSES section.

Regulatory Flexibility Act Certification

    The Secretary certifies that the proposed regulation would not have 
a significant economic impact on a substantial number of small 
entities. The U.S. Small Business Administration Size Standards define 
proprietary institutions as small businesses if they are independently 
owned and operated, are not dominant in their field of operation, and 
have total annual revenue below $7,000,000. Nonprofit institutions are 
defined as small entities if they are independently owned and operated 
and not dominant in their field of operation. Public institutions are 
defined as small organizations if they are operated by a government 
overseeing a population below 50,000.
    The small entities that this proposed regulatory action would 
affect are school districts or other public agencies seeking to access 
public insurance and benefits to reimburse services required to be 
provided to students with disabilities under IDEA Part B. The Secretary 
believes that the costs imposed on public agencies by the proposed 
regulation would be limited to the paperwork burden related to 
preparing the appropriate parental notice and that the benefits of 
implementing this proposal would outweigh any costs incurred by those 
agencies. As described in the Discussion of Costs and Benefits section 
of this document, the Department estimates that the proposed 
regulations would result in cost savings.
    The Department invites comment from members of the public regarding 
our estimates and whether this proposed rule may have a significant 
economic impact on a substantial number of small entities.

Paperwork Reduction Act of 1995

    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department provides the general public and Federal agencies 
with an opportunity to comment on proposed and continuing collections 
of information in accordance with the Paperwork Reduction Act of 1995 
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that the public 
understands the Department's collection instructions, respondents can 
provide the requested data in the desired format, reporting burden 
(time and financial resources) is minimized, collection instruments are 
clearly understood, and the Department can properly assess the impact 
of collection requirements on respondents.
    Proposed newly redesignated Sec.  300.154(d)(iv) contains an 
information collection requirement, although the information collected 
is not submitted to the Department. Under the PRA, the Department has 
submitted a copy of this section to OMB for its review.

[[Page 31666]]

    A Federal agency may not conduct or sponsor a collection of 
information unless OMB approves the collection under the PRA and the 
corresponding information collection instrument displays a currently 
valid OMB control number. Notwithstanding any other provision of law, 
no person is required to comply with, or is subject to penalty for 
failure to comply with, a collection of information if the collection 
instrument does not display a currently valid OMB control number.
    In the final regulations, we will display the control number 1820-
0600 assigned by OMB to any information collection requirement proposed 
in this NPRM and adopted in the final regulations.
    Under proposed newly redesignated Sec.  300.154(d)(2)(iv), each LEA 
must provide a written notification to parents prior to accessing a 
child's or parent's public benefits or insurance for the first time and 
annually thereafter. We assume that each SEA would amend the standard 
notice that its LEAs can use and that it would take an average of about 
10 hours to amend the notice for each of the 51 grantees currently 
accessing Medicaid to pay for covered services under Part B of IDEA, 
representing a total burden of 510 hours. We further estimate that as 
an uppermost bound it would take an additional 8,912 hours for LEA 
staff to obtain and modify an existing model notification, based on not 
more than 30 minutes for each of the 17,824 LEAs. However, we expect 
that most LEAs would simply use the model from its SEA. Therefore, we 
estimate the one-time burden for the first year of implementation of 
this notification requirement to be not more than 9,422 hours. With the 
addition of the burden to SEAs and LEAs associated with proposed Sec.  
300.154, the total annual record keeping and notification burden for 
1820-0600 is estimated to be approximately 383,751 hours for the 75,527 
separate responses from SEAs and LEAs.
    The following chart describes the sections of the proposed 
regulations involving information collections, the information being 
collected, and the collections the Department will submit to OMB for 
approval and public comment under the PRA.

------------------------------------------------------------------------
                                   Collection        OMB control number
     Regulatory section            information      and estimated burden
------------------------------------------------------------------------
Sec.   300.154(d)...........  Requires that         Information
                               parents receive a     collection 1820-
                               written               0600 ``State and
                               notification prior    Local Educational
                               to LEAs accessing a   Agency Record
                               child's or parent's   Keeping,
                               public benefits or    Notification, and
                               insurance for the     Reporting
                               first time and        Requirements under
                               annually thereafter.  Part B of the
                                                     Individuals with
                                                     Disabilities
                                                     Education Act.''
                                                     The burden would be
                                                     9,422 hours.
------------------------------------------------------------------------

    We have prepared an Information Collection Request (ICR) for this 
collection. This proposed collection is identified as proposed 
collection OMB control number 1820-0600. If you want to review and 
comment on the ICR, please follow the instructions listed below in this 
section. Please note that the Office of Information and Regulatory 
Affairs (OIRA) and the Department of Education review all comments 
posted at www.regulations.gov.
    We consider your comments on this proposed collection of 
information in--
     Deciding whether the proposed collection is necessary for 
the proper performance of our functions, including whether the 
information will have practical use;
     Evaluating the accuracy of our estimate of the burden of 
the proposed collection, including the validity of our methodology and 
assumptions;
     Enhancing the quality, usefulness, and clarity of the 
information we collect; and
     Minimizing the burden on those who must respond. This 
includes exploring the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques.
    Comments submitted in response to this document should be submitted 
electronically through the Federal eRulemaking Portal at 
www.regulations.gov by selecting Docket ID Number ED-2022-OSERS-0052. 
Please specify the Docket ID number and indicate ``Information 
Collection Comments'' if your comment(s) relate to the information 
collection for this proposed rule. Written requests for information or 
comments submitted by postal mail or delivery should be addressed to 
the Strategic Collections and Clearance Director, U.S. Department of 
Education, 400 Maryland Avenue SW, LBJ Room 6W201, Washington, DC 
20202-8240. For further information contact [email protected].
    Consistent with 5 CFR 1320.8(d), the Department is soliciting 
comments on the information collection through this document. OMB is 
required to make a decision concerning the collection of information 
contained in these proposed regulations between 30 and 60 days after 
publication of this document in the Federal Register. Therefore, to 
ensure that OMB gives your comments full consideration, it is important 
that OMB receives your comments by June 20, 2023. This does not affect 
the deadline for your comments to us on the proposed regulations.

Intergovernmental Review

    This program is subject to Executive Order 12372 and the 
regulations in 34 CFR part 79. One of the objectives of the Executive 
order is to foster an intergovernmental partnership and a strengthened 
federalism by relying on processes developed by State and local 
governments for coordination and review of proposed Federal financial 
assistance.
    This document provides early notification of the Department's 
specific plans and actions for this program.

Federalism

    Executive Order 13132 requires us to ensure meaningful and timely 
input by State and local elected officials in the development of 
regulatory policies that have federalism implications. ``Federalism 
implications'' means substantial direct effects on the States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. The proposed regulation does not have federalism 
implications.
    Accessible Format: On request to the program contact person listed 
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities 
can obtain this document in an accessible format. The Department will 
provide the requestor with an accessible format that may include Rich 
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, 
braille, large print, audiotape, or compact disc, or other accessible 
format.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the

[[Page 31667]]

Code of Federal Regulations at www.govinfo.gov. At this site you can 
view this document, as well as all other documents of this Department 
published in the Federal Register, in text or PDF. To use PDF you must 
have Adobe Acrobat Reader, which is available at no cost to the user at 
the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

List of Subjects in 34 CFR Part 300

    Administrative practice and procedure, Education of individuals 
with disabilities, Elementary and secondary education, Equal 
educational opportunity, Grant programs--education, Privacy, Private 
schools, Reporting and recordkeeping requirements.

Miguel A. Cardona,
Secretary of Education.

    For the reasons discussed in the preamble, the Secretary of 
Education proposes to revise part 300 of title 34 of the Code of 
Federal Regulations as follows:

PART 300--ASSISTANCE TO STATES FOR THE EDUCATION OF CHILDREN WITH 
DISABILITIES

0
1. The authority citation for part 300 continues to read as follows:

    Authority:  20 U.S.C. 1221e-3, 1406, 1411-1419, and 3474; Pub. 
L. 111-256, 124 Stat. 2643; unless otherwise noted.

0
2. Section 300.154 is amended by:
0
a. Removing paragraph (d)(2)(iv);
0
b. Redesignating paragraph (d)(2)(v) as paragraph (d)(2)(iv); and
0
c. Revising newly redesignated paragraph (d)(2)(iv).
    The revision reads as follows:


Sec.  300.154   Methods of ensuring services.

* * * * *
    (d) * * *
    (2) * * *
    (iv) Prior to accessing a child's or parent's public benefits or 
insurance for the first time, and annually thereafter, must provide 
written notification to the child's parents, consistent with Sec.  
300.503(c), that includes--
    (A) A statement confirming that parental consent to disclose 
personally identifiable information is required separately under 34 CFR 
99.30 and 300.622 and that parents retain all applicable privacy rights 
under those provisions; and
    (B) A statement of the ``no cost'' provisions in paragraphs 
(d)(2)(i) through (iii) of this section.
* * * * *
[FR Doc. 2023-10542 Filed 5-16-23; 4:15 pm]
BILLING CODE 4000-01-P