Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
June 17, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 1783 words
HEADLINE:
TESTIMONY June 17, 1999 GREGORY A. VADNER DIRECTOR DIVISION OF MEDICAL SERVICES
DEPARTMENT OF SOCIAL SERVICES SENATE FINANCE MEDICADE AND
SCHOOL-BASED SERVICES
BODY:
TESTIMONY FOR THE
SENATE FINANCE COMMITTEE HEARING ON MEDICAID FUNDING FOR SCHOOL BASED HEALTH
SERVICES GREGORY A. VADNER DIRECTOR DIVISION OF MEDICAL SERVICES DEPARTMENT OF
SOCIAL SERVICES STATE OF MISSOURI JUNE 17, 1999 Mr. Chairman, Members of the
Committee: Thank you for inviting me to appear before you today. I am the
director of the Missouri Medicaid Program, and I am here in that capacity. We
believe school based services are an important asset to ensuring children's
access to health care services. These services are a critical component of
children's readiness to learn, especially in the case of children with special
health care needs. The importance of this issue has recently been highlighted by
four developments: -Recent efforts by states to increase their ability to
capture allowable Medicaid funding for school based health care services,
particularly through bundling groups of services for the purpose of rate setting
and the administrative efficiencies this brings; a bundled rate is merely the
setting of an average per child cost of serving disabled children; -Accompanying
scrutiny by stakeholders such as yourself concerning these efforts to make sure
program integrity is maintained; -The Health Care Financing Administration's
(HCFA) May 21, 1999 letter outlawing current and future bundled rate payment
systems; and -The March 3, 1999 U.S. Supreme Court case, Cedar Rapids Community
School District, v. Garret F. This case will have the effect of increasing each
school system's need to make sure Medicaid eligible children are on the program
and to find ways to efficiently bill Medicaid for all eligible services.
Missouri is a state that is exploring the development of a bundling system,
which HCFA has chosen to outlaw. Missouri Medicaid currently pays for school
based administrative case management and direct services in a fee for service
system. These are allowable Medicaid costs all schools have. Our program began
in the early nineties with 6 districts out of 525 participating. We reached a
peak in 1996 with less than 20% of all districts participating. Why this
discrepancy? Simple, our schools tell us they are not in the business of billing
for services. They got into this thinking that billing would be easy for them,
and it is not. The results have been disappointing: -Funding for services and
service coordination through case management is not equitable. Sophisticated
"wealthier" systems are better able to participate, while poorer and smaller
rural districts have not; -Money is spent chasing paper, not coordinating access
and services. This runs counter to the current trend of buying packages of
services and coverage instead of piecemeal services; -The resulting situation
with most districts not able to participate puts pressure on all of us to look
for efficiencies and increase participation. If a good, sound bundling system is
not allowed, I predict states will have to pursue other ways to streamline
Medicaid payment for school based services. My fear is these ways will be less
efficient and more open to error or abuse than a sound bundling program with
good documentation. Regardless, the need for services and the accompanying
Medicaid funding will not go away. Every state looks for ways to deliver and
fund school based services in the best way for them. Most of these models are
similar in some respects and unique in others. That is the nature of states and
why they are such vibrant examples of innovation, because they each approach
problems with a focus on their own particular circumstances. The federal
government must play a critical role in this process. It is important that HCFA
review each state's Medicaid plan, whether bundled or fee for service, to
ensure: -The integrity and efficiency of program designs so that money is not
wasted and the chance of fraud or abuse is minimized; -Where outside contractors
are part of the design or operation of the program, the competitive bid process
states use should be validated; and -Most importantly, any approved plan must
have a method to ensure that children receive the health care services to which
they need. In most cases this could be built in as part of a student's
Individual Education Plan (IEP). I am concerned that the recent HCFA directive
suddenly outlaws currently approved programs. Allowing states time to make the
transition to some other, unknown system seems small consolation when suddenly
faced with a complete reversal of policy. We are talking about throwing away
fully approved and operational state plans with lengthy development and federal
approval processes behind them, a terrible precedent for this federal/state
partnership. Wouldn't a better approach be to work with states to identify and
correct any weaknesses in these plans. Where abuses are found, tough measures
should be taken to stop them. In my opinion, current and developing bundled rate
programs ought to be made to meet the federal tests I have outlined. They should
not be invalidated overnight as a simple solution to tough policy issues. Close
federal scrutiny and legitimate concerns ought to bring constructive
improvements developed in full and ongoing partnership with the states. I hope
this debate does not cloud our view of the benefits of increased school based
services through Medicaid. This would help states do a better job with the
Early, Periodic, Screening, Diagnostic and Treatment (EPSDT) program. It would
help the schools achieve their federal mandate under the Individuals
with Disabilities Education Act (IDEA), especially with the recent
Cedar Rapids case. Most importantly, increasing participation in this program
would directly benefit students with special health care needs and their
non-disabled classmates who might otherwise see regular education budgets
diverted for these costs. Missouri, and I believe the other states join us,
stands ready to work with Congress and HCFA so that we can show everyone the
solutions to these concerns. I have included additional background materials
with my submission for the record. I thank the committee for visiting these
important issues. Supporting Documentation to the Testimony of Gregory A.
Vadner, Director Division of Medical Services Missouri Department of Social
Services June 17, 1999 For many years, public schools and state Medicaid
programs have struggled with the division of responsibility for providing
school-based health services to poor children with disabilities who are enrolled
in Medicaid. These school-based health services can range from scheduled
sessions for occupational or speech therapy to the hour-by-hour personal care to
children who have multiple physical impairments or who may be
ventilator-dependent. Public schools are required to provide these services
whenever they have been prescribed by a child's Individualized Education
Program, or IEP -- which is required under the Individuals with
Disabilities Education Act ("IDEA") to ensure that "all children with
disabilities have access to a free appropriate public education which emphasizes
special education and related services designed to meet their unique needs." 20
U.S.C. 1400(c). For a time after the IDEA was enacted, schools and state
Medicaid agencies, and the federal Health Care Financing Administration, were
unclear as to which entity was responsible for paying for school-based health
services that were prescribed as part of an IEP for a child enrolled in
Medicaid. On the one hand, schools were required to provide these services if
they were part of an IEP; on the other, state Medicaid agencies are responsible
for paying for medical assistance to Medicaid-enrolled children, no matter the
particular location where that care may be provided. In 1988, Congress amended
title XIX to make clear that Medicaid could not refuse to pay for a covered
service to a disabled child simply because that service was prescribed as part
of an IEP. See 42 U.S.C. 1903(c) (added as part of the Medicare Catastrophic
Coverage Act of 1988). More recently, in 1997, Congress amended the IDEA to
provide that the state education agency and the state Medicaid agency had to
enter into cooperative agreements regarding the provisions of these school-based
health services, and emphasizing that Medicaid's financial responsibility was to
precede that of the school districts. See 20 U.S.C. 1412(a)(12)(A)(i).
School-based health services is thus an exception to the general rule that
Medicaid is the payor of last resort. The cost of providing these services to
children with severe disabilities can become very high, as is illustrated by the
U.S. Supreme Court's decision a few months ago in Cedar Rapids Community School
District v. Garrett F., 119 S. Ct. 992 (1999). In that case, the Supreme Court
held that IDEA required the school district to provided one-on-one continual
nursing care to a child who was in a wheelchair and ventilator dependent. The
Court's decision describes quite vividly the array of health care services that
may need to be provided throughout the school day in order for a disabled child
to remain in school. The school district argued that IDEA did not require it to
provide this type of continual care, which it estimated would cost $30,000 to
$40,000 a year, but the Supreme Court disagreed and held that the school had to
provide and pay for the care necessary to keep the child in school. In light of
the congressional mandates that Medicaid and not local school budgets could and
should pay for these services where appropriate, a number of state Medicaid
agencies have in recent years been looking at how to pay for these services. One
way to pay for services is the so-called "bundled rate" under which schools are
paid a set fee for each Medicaid-enrolled disabled child in that district, and
the fee is intended to cover the range of services that would typically be
accessed by a child with that disability. The "bundled rate" concept is very
similar to the type of per diem rates that Medicaid typically pays hospitals and
nursing homes, under which the facility is expected to provide a range of
services for each inpatient day, even though on any particular day some patients
may require very few services, and some may require a lot. In both cases, the
rate is set according to the average costs of providing services. Bundled rate
systems for school-based health services allow participation rates by school
districts. Schools have found it convenient and not inconsistent with their
educational mission to seek Medicaid reimbursement based on a bundled system as
opposed to the time-consuming, paper-driven fee-for-service billing.
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