Medicaid Update- April 23, 2021

 TO: IAASE Stakeholders

FROM: IAASE Medicaid Committee

DATE: April 22, 2021

SUBJECT: Free Care & Medicaid State Plan Amendment (SPA) Update

Overview Historically, Medicaid only paid for health services included in an IEP/IFSP of a student enrolled in Medicaid. A 2014 change in federal CMS policy provided an opportunity to expand school-based services to ALL Medicaid-enrolled students. This is known as Free Care Policy Reversal and requires Illinois

to submit a State Plan Amendment (SPA) to The Centers for Medicare & Medicaid Services (CMS) to remove restrictions in the Medicaid state plan.

Proposed Timeline

• Notice of SPA: Posted April 9th (view here)
• Effective date of SPA: July 1, 2021
• LEA Handbook changes: July 1, subject to CMS approval of SPA
• Training for District LEA staff: Throughout summer of 2021 to be ready for fall semester

Change in the Claiming Methodology The Illinois Department of Healthcare and Family Services (HFS) is recommending a change from the current rate settlement process to a cost settlement process. Cost settlement is used in 21 states for Fee-for-Service and calculates the “True / Complete” costs for providing services to Medicaid-eligible students. Cost settlement determines the additional revenue or adjustment for each LEA.

Financial Impact According to HFS, ALL states that have changed to cost settlement have resulted in a net increase in federal reimbursement. As a result of Free Care Policy Reversal and cost settlement, HFS anticipates an estimated annual increase of $12 - $18 million in federal matching funds for Illinois LEAs.

• Fee-For-Service billing will be documented and submitted in the same manner that it is currently
• Administrative Outreach quarterly financial data will need to be submitted to PCG within six weeks of the end of the quarter, a notable decrease from the current two year filing window

Proposed Addition of Services HFS is using this opportunity to add additional Medicaid eligible service providers. The HFS/ISBE Workgroup has recommended adding the following service providers:

• Board Certified Behavior Analyst
• Registered Behavior Technician
• Orientation & Mobility Specialist
• School Counselors
• Assistive Technology Specialist
• Teacher of Deaf and Hard of Hearing
• Teacher of Students with Visual
• Impairments
• Music, Recreation, and Art Therapist

Questions & Comments Please contact Kimberly Moore

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