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Medicaid is a federal/state cost sharing benefit program for health and medically necessary services for low-income individuals that was established as Title XIX of the Social Security Act in 1965. Originally, Medicaid benefits could not be used for services provided under the Individuals with Disabilities Education Act (IDEA). In 1988, the Medicare Catastrophic Coverage Act allowed Medicaid to pay for covered medical services provided to Medicaid-enrolled children with special health care needs on their individualized education program (IEP) or individual family service plan (IFSP).
Within the Iowa Department of Education, there are three aspects to reimbursement from the Iowa Medical Assistance Program (Medicaid). A Local Education Agency (LEA) is a community school district that is able to seek reimbursement for services provided to children requiring special education with services identified on an IEP. An Area Education Agency (AEA) is a regional service center able to seek reimbursement for services provided to children requiring special education. The Early ACCESS Program also allows reimbursement for services to children from birth to age three with at least a 25% developmental delay and services identified on an IFSP.
Medicaid services are funded by a mix of state and federal funds. Each state is able to define what services are covered in their program, with federal approval. In Iowa, all three of the education-related provider types return at least the state portion of the Medicaid reimbursement to the Department of Human Services (Iowa’s Medicaid agency). In fiscal year 2020-2021 AEAs and LEAs were able to receive $53 million in federal Medicaid funds for special education services. Medicaid will only reimburse a provider for their ‘cost’ of the service and education regulations prohibit an AEA or LEA from charging more than their ‘cost’ for the service. The Department of Human Services, using cost data provided by the Iowa Department of Education, calculates the reimbursement rates for each AEA and LEA on an annual basis.
Current Medicaid Rates (dates of service from July 1, 2021, to June 30, 2022)
The Medicaid reimbursement rates for local districts and AEAs are cost based with rates set annually. The files below include those new rates.
Archived Medicaid Rates (dates of service from July 1, 2020, to June 30, 2021)
State Share Invoices to be Paid
Any month in which an LEA has claims processed results in a Medicaid Billing Remittance posted to the Iowa Medicaid Portal. Below is a document walking the user through the registration process to access the system.
Medicaid requires all providers to have appropriate documentation of the services reimbursed. The documentation must be kept for 5 years from the date of the claim submission (or last re-submission). As the documentation is sent to Medicaid for payment, FERPA privacy requires a parental consent to release the information to a third party (Medicaid).
Medicaid Annual Notification (2019-05-01)
Parental Consent Form (2014-10-07)
Many districts are utilizing the free software from Iowa Medicaid (PC-ACE Pro 32). Many districts are utilizing the free software from Iowa Medicaid (PC-ACE Pro 32). Learn more at EDI Support Services.
The Iowa Department of Education has designed example documentation forms for the various covered services as follows:
AEA Services for Part B - AEA Medicaid Form (2019-11-01) – AEA Part B (2019-11-01)
Part B Checklist – AEA Record Audit Form (2006-09-21)
AEA Services for Part C - AEA Medicaid Form (2019-11-01) – Infant Toddler Part C (2019-11-01)
Part C Checklist – IT Record Audit Form (2006-09-21)
LEA Service Forms
Service Documentation - Behavior Counseling (Word) (2019-11-01)
Weekly Progress Notes Behavior Services (Word) (2022-02-22)
Accounting entries for Medicaid can be found on the document, UFA Journal Entries, located on the Uniform Financial Accounting webpage. Medicaid entries are on the last tab of the worksheet.
Advisory Group – National Alliance for Medicaid in Education, Inc.
The National Alliance for Medicaid in Education, Inc. (NAME) represents the nation's Medicaid and Education agency staff, along with local education agency administrators, with programmatic responsibility for administering Medicaid's health related service programs in schools. The primary purposes of NAME are to provide an information network among the states on issues pertinent to the Medicaid programs in schools and to act as a focal point of communication between the states. Iowa is well represented in the NAME organization.
October 4-8, 2021 NAME Conference (Virtual)
Each LEA has a Medicaid Eligibility Report that is updated each month.
FAQs and Training
Medicaid FAQs (2013-07-29)
Private Duty Health Care Agency Nurse Guidance
If your district has a student who receives services at school from a home health private health care agency nurse, as an extension of the services provided in the home, it is recommended that the student’s Individualized Education Program (IEP) team: (1) review the necessity of nurse level services; (2) if nurse level services are found necessary, review the necessity of using a private health care agency nurse instead of an employee nurse; and (3) review Iowa Department of Human Services Informational Letter 35. The letter states that “Schools may choose to contract with health care agencies to provide the needed services. Contracted services are the responsibility of the school and the contracted providers should bill the school and not Medicaid for services written in the student’s IEP. While the IEP might order nursing services, the school is not obligated to use the private duty nursing agency that provides services in the student’s home before and/or after school. In addition, an IEP might require health paraprofessional services supervised by the school nurse if private duty nursing services are not medically necessary. If rejected by the IEP team, the private duty nursing agency cannot fail to provide services at the other authorized times of day. The titles below are tools your district might use to determine the necessity of nurse level services and to provide guidelines for private agency nurses.”
The following reference links may also provide valuable information or perspectives related to the Iowa Medicaid within the education environment: