Mandated School Billing for Special Education Health Services

The 1998 Minnesota K-12 Omnibus Education bill mandated that all schools bill third-party payers (HMOs, insurers, and Medicaid) for health care services given under Special Education. M.S. 125A now mandates that funds ($50,000) be provided for training school staff in coding and other necessary skills and information for submitting Medicaid and insurance claims.

The Minnesota Department of Children, Families and Learning (DCFL), in cooperation with the Department of Human Services (DHS), must develop a statewide data management system for school districts and cooperative units to use to maximize medical assistance reimbursement for health and health-related services provided under Individual Education Plans (IEPs) and Individual Family Service Plan (IFSPs). The statewide data system must enable school district staff to: establish or improve Medical Assistance (MA) billing systems; understand MA billing codes; comply with IDEA; contract with billing agents; carry out other activites necessary to meximize MA. The legislature appropriated $200,000 to develop and implement a statewide third-party billing system.

Schools Become Providers
125A.74 Medical assistance payments to school districts.
Subdivision 1. Eligibility. A district may enroll as
a provider in the medical assistance program and receive medical
assistance payments for covered special education services
provided to persons eligible for medical assistance under
chapter 256B. To receive medical assistance payments, the
district must comply with relevant provisions of state and
federal statutes and regulations governing the medical
assistance program.
Subd. 2. Funding. A district that provides a covered
service to an eligible person and complies with relevant
requirements of the medical assistance program is entitled to
receive payment for the service provided, including that portion
of the payment that will subsequently be reimbursed by the
federal government, in the same manner as other medical
assistance providers. The school district is not required to
provide matching funds or pay part of the costs of the service,
as long as the rate charged for the service does not exceed
medical assistance limits that apply to all medical assistance
Subd. 3. Contract for services. A district may
contract for the provision of medical assistance-covered
services, and may contract with a third party agency to assist
in administering and billing for these services.
Subd. 4. Private insurers. A district may enroll as
a provider for insurance companies to provide covered special
education services to eligible persons. To receive payments,
the district must comply with relevant state and federal
statutes. A district may contract for services, and may
contract with a third party agency to assist in administering
and billing for these services.
Subd. 5. No reduction in revenue. A district's
revenue for special education programs must not be reduced by
any payments for medical assistance or insurance received
according to this section.

Informed Consent

No parent shall be required to provide information necessary for the school to submit the claims request, and informed consent must be given before asking a parent to provide third party enrollee numbers, social security numbers, or other identifying information.

Subd. 5. Informed consent. When obtaining informed
consent, consistent with sections 13.05, subdivision 4,
paragraph (d); and 256B.77, subdivision 2, paragraph (p), to
bill health plans for covered services, the school district must
notify the legal representative (1) that the cost of the
person's private health insurance premium may increase due to
providing the covered service in the school setting, (2) that
the school district may pay certain enrollee health plan costs,
including but not limited to, copayments, coinsurance,
deductibles, premium increases or other enrollee cost-sharing
amounts for health and related services required by an
individual service plan, or individual family service plan, and
(3) that the school's billing for each type of covered service
may affect service limits and prior authorization thresholds.
The informed consent may be revoked in writing at any time by
the person authorizing the billing of the health plan.

Concerns include:

  • Mingling of public and private medical data
  • Future employability and insurability of the child
  • Increased insurance premiums for child's policy
  • Access to other medical service programs (TEFRA, etc.)
  • Health plans may decrease the number of at-home services provided
  • Annual insurance medical service limits may be affected
  • Use of Medicaid dollars for other school projects and initiatives
  • Complex Medicaid coding process
  • Additional cost to school for contracting for a claims submission if school staff unable to code
  • Data privacy concerns with outside claims submission and processing
  • Schools may provide less services believing that the health plans should provide them.
  • Health plans may deny services that can be provided in school and funded by taxpayers through Medicaid