DISCUSSION DRAFT

COMMENTS ON HCFA ADMINISTRATIVE CLAIMING GUIDE

(HCFA SUBMISSION DEADLINE – APRIL 3, 2000)

The Council of the Great City Schools appreciates the opportunity for school districts and other interest parties to submit comments to the Health Care Financing Administration (HCFA) on the draft Medicaid School-based Administrative Claiming Guide issued to the Council on February 16, 2000. The Council is pleased to serve as a comment coordinating entity and facilitate the transmittal of analyses, responses, opinions and suggestions for our own urban membership and our colleagues in other school districts and education-related organizations.

However, the Council must express the universal concerns of commenting school districts with the content of the draft Guide. This draft Guide is not a useful tool for school districts attempting to effectively participate in the Medicaid program. It does little to resolve the complexities acknowledged in the earlier HCFA school-based guide. The references to thousands of pages of program authority dating back to the mid-1980s suggest that the target audience for the Guide may be the Medicaid specialists in the HCFA regions or the States, rather than school administrators.

School reviewers have noted that the emphasis of the Guide appears to be on explaining disallowances of historically acceptable Medicaid practices from a number of the regions and states. It also has been noted that nowhere in the Guide is any school-based expenditure clearly deemed as "allowable and reimbursable", but only referenced as "may be" available. The Guide, therefore, tends to set a negative rather than a positive tone for facilitating access to Medicaid health services for millions of eligible schoolchildren.

Children come to the schoolhouse door with a variety of health, nutrition, social and safety needs that must be addressed in order to fulfill our primary mission of education. These needs are particularly acute in low-income and urban centers. The 57 member school districts of the Council of the Great City Schools enroll approximately 25% of the nation’s poor children, and 13% of the nation’s disabled schoolchildren, as well as 40% of the nation’s limited English proficient students and 32% of the African-American students -- often cited as medically at-risk populations.

Commenting school districts agree with the recognition in the draft Guide that "the school setting offers unique advantages and opportunities to reach children and families and to inform and encourage them to enroll in the Medicaid program as well as to provide assistance to student in accessing medical services." Yet, not one of the school district commenters supports the draft Guide in even a qualified manner.

Clearly HCFA, there is a problem here. And in order to help resolve this problem, the Council submits the following set of general and specific comments on the draft Guide, as well as strongly recommends the total rewriting of the Guide through an active collaborative effort between HCFA, school districts, the states and other interested parties. Finally, this Guide in draft form is already apparently in active use by some HCFA regions and states, thereby raising significant questions about whether revisions are contemplated by HCFA following the comment process on this draft.

The Comment Collection Process

The Council of the Great City Schools established the following steps to solicit, collect, and synthesize comments from our 57 large central city school districts, other school districts, and other interested organizations, including national education and disability advocacy groups that have formed a partnership on local implementation practices for the 1997 amendments to the Individuals with Disabilities Education Act:

  1. Posted the Draft Guide on the Council website and established an e-mail address to receive comments;
  2. Sent information and request for comment to all Great City Schools’ Medicaid coordinators, special education directors, and chief financial officers;
  3. Sent information and request for comment to all IDEA partnering organizations;
  4. Sent information and request for comment to all 70 participants in the November 1999 Conference on School-based Medicaid Services coordinated by the Council;
  5. Conducted multiple conference calls with a working group of school-based Medicaid coordinators;
  6. Convened a two-day working session of a cross-section of school-based Medicaid coordinators, special education directors, and school finance administrators to assist in interpreting and developing comments;
  7. Received and synthesized nearly ____ comments via mail, electronically, and by phone; and
  8. Drafted comments and submitted the draft back to the majority of the above commenters for revision recommendations.

COMMENTS ON THE DRAFT GUIDE

GENERAL COMMENTS

Importance of School-based Medicaid Participation

Though tangential to a school district’s primary mission of education, virtually every school district in the nation provides medical and health related assistance to its schoolchildren. These necessary health services represent a significant financial burden on this primary education mission, and can be extremely costly particularly for serving severely health-impaired children. A number of federal statutes and associated judicial orders (most recently Cedar Rapids Community School District v. Garret F., __ U.S. __, 1999) specifically mandate that public school districts provide health-related services to disabled schoolchildren in order to ensure their access to an equal educational opportunity.

The Council and its partner organizations want to assure HCFA of our commitment to work for appropriate Medicaid financial assistance to support eligible school-based services, and to facilitate access and services for our Medicaid eligible population. School district participation has been limited over the years, irrespective of enabling 1988 legislation (sec. 1903(c)) regarding IDEA children, due to the complexities and administrative barriers to school-based Medicaid implementation. In short, for more than a decade, school districts have been shouldering a financial burden for services to eligible children that are the legitimate responsibility of the Medicaid program. The increased participation by school districts in the last few years in the Medicaid program should be a welcomed indicator of increased access to services for eligible children, not an unwelcome federal budgetary expenditure.

The Importance of Administrative Outreach, Enrollment, Planning, Coordination, Referral and Follow-Up to the Access and Delivery of Medical Services

"Administrative claiming" under the Medicaid program consists of a broad variety of services and activities. Such administrative services include outreach to identify potentially eligible children and to assist in enrollment and eligibility determination. Such administrative services also include accessing medical services through planning, coordination, referral and case management activities. It is frequently overlooked that the process of identification and arranging for necessary medical services as well as coordinating with the providers, the child’s school program, and the family’s schedule may be more time consuming and involved than the actual provision of the medical intervention itself. And, without such "administrative" services, the medical intervention may never take place at all.

The Guide Creates New Policy and Departs from Historically Acceptable Medicaid Practices

Contrary to introductory statements in the draft Guide about merely providing information and clarification on existing requirements and not creating new policy, the commenting school districts uniformly find that the Guide does establish new Medicaid policies and interpretations. In fact, the Guide departs from historically acceptable Medicaid practices that have been knowingly approved or accepted across the HCFA regions and states. The Council acknowledges some disparity in the directives and interpretations among regions and states. Yet, this lack of uniformity is concurrently heralded as the critical flexibility element of the Medicaid program.

Lack of Federal Technical Assistance to School Districts

Neither HCFA nor the U.S. Department of Education has made significant efforts to operationally assist school districts with participation in the Medicaid program. The 1997 HCFA Medicaid and School Health Guide recognized that some assistance was needed, but there was no follow-up or outreach to the education community in the form of national or regional meetings, offers of technical assistance, funding of technical assistance contractors, or the like. Similarly, the Education Department has done little to facilitate the implementation of the provisions of the IDEA amendments of 1997 designed to ensure interagency collaboration and financial participation in certain services for disabled schoolchildren. Both HCFA and the Education Department have left school districts to figure out by themselves the admitted complexities and disparities within the program, or to turn to expensive national consultants for technical assistance.

This draft Guide, rightly or wrongly, is viewed by school commenters as disparate overregulation of the school sector by the Medicaid program. Though the history of school-based Medicaid participation is limited, commenting school districts find no similar set of guidelines or equivalent interpretations directed to other Medicaid providers or participants. The Guide is perceived not as a technical aid to schools, but as an additional regulatory authority for schools -- in effect a stricter framework than imposed on other providers.

Enabling Rather Than Restrictive Interpretations for the Draft Guide

The Council recommends that HCFA make every effort to interpret the provisions of Medicaid law in a manner that enables school districts to effectively participate in the Medicaid program. The Council finds no compelling justification for adopting unnecessarily restrictive practices and interpretations. To the contrary, the potential of schools to secure services for unserved and underserved Medicaid eligible children should be maximized not restricted. Commenting school districts, however, find that the draft Guide appears to follow the more restrictive, rather than the more enabling course -- an approach for which we recommend reconsideration and revision.

Overemphasis on the Elusive "Free Care Rule"

The draft Guide makes multiple references to the "free care rule" as a basis for denying Medicaid financial reimbursement for otherwise eligible services to eligible children. Ironically, the Medicaid program periodically invokes the "free care rule" to maintain a shift of financial responsibility for health services to other governmental units and agencies, which originated in part from implementation gaps in Medicaid and EPSDT.

The Council cannot find an express statutory basis for the "free care rule." This rule seems to have evolved from the third party liability provisions that were arguably intended to prevent private insurers from escaping their financial responsibilities. Moreover, other public and private health care providers suggest that aggressive implementation by HCFA of the free care rule would "wreck havoc" on a broad range of Medicaid providers.

The Medicaid and School Health Guide issued by HCFA in 1997 seems to suggest a better approach. This 1997 guide (see page 50 in the website version) recognizes that a broad interpretation of the free care rule could pose administrative difficulties within a school setting, and states that alternative interpretations or approaches are under consideration by HCFA to try to resolve these problems. Based on this statement, there are apparently alternative interpretations available to HCFA regarding the non-statutory "free care rule". The Council is concerned that HCFA appears to have discarded these alternative considerations in this new draft Guide.

This restrictive rather than enabling approach to school-based Medicaid services, exemplified by the free care interpretation, adds complications to a potentially viable partnership between HCFA and the schools that will benefit the at-risk populations, which both agencies serve.

Failure to Serve Section 504 Children

The draft Guide expressly precludes reimbursement for eligible services for low-income disabled children covered by section 504 of the Rehabilitation Act of 1973. Analogous to IDEA eligible children, section 504 children are identified as having one or more disabilities by federal law and also are required to receive a "free appropriate public education", including health related services, as are IDEA children. The draft Guide establishes a distinction between these analogous groups of federally identified disabled schoolchildren. School district commenters recommend HCFA reconsideration of this distinction.

SPECIFIC COMMENTS

Education Related Activities Can Also Be Medical and Health Related Activities

Nearly every activity performed by a school district relates generally to its primary mission of education. Similarly, education statutes like IDEA authorize a variety of services that are educational, or directly or indirectly related to education. Merely because an education law has been enacted at the national, state or local level does not mean that every requirement of that law is solely educational or should be labeled as such by HCFA. National and state legislatures, as well as our local citizenry recognize that the role of the school has expanded significantly in the past few decades. The social services, the public safety services, the nutritional services, the mental health services, and the medical and health services performed by school districts are related, and at times interrelated to the primary education role of the school. The draft Guide, however, consistently fails to recognize that the education relationship does not diminish the medical and health related nature of certain services provided by a school district, or preclude the proper eligibility of these services for Medicaid reimbursement. A seemingly simplistic label, like "special education teacher", often belies the complexity and multi-faceted elements of the function.

The draft Guide does a credible job of acknowledging that payment for certain services, such as evaluations or assessments conducted to determine a child’s health related needs, may be payable under Medicaid (page 18, paragraph 4). Yet in the preceding paragraph (paragraph 3 on page 18) as well as on pages 12 and 13, the draft Guide simplistically labels virtually all IDEA/IEP activities as education related activities, then generally disallows these costs under Medicaid (page 18, paragraph 3 and final sentence on page 12). Though there are ambiguities built into these blanket statements of disallowance, a chilling effect is created. While the draft Guide recognizes direct Medicaid services performed in an education related setting as well as extensions of direct services under Code 4 on page 27, the draft appears to erroneously preclude, for example, arranging, coordinating or case managing such eligible direct services as an allowable administrative claim. The minimal references found on pages 34 and 35 under Codes 9(b) are too narrow and insufficient to cure the inaccuracies of the blanket disallowance statements regarding IDEA/IEP activities. This draft Guide requires substantial revision in this regard, in order to properly accommodate the multiple functions performed by school.

Inaccurate Interpretations of IDEA

Uncertainty Created between Direct/Extension Service Claims and Administrative Claims

The draft Guide proposes unnecessary micromanagement of how states and local providers differentiate administrative activities in relation to direct Medicaid services. Overlapping activity code explanations add confusion as well. The draft Guide suggests that billing, related paperwork, clerical activities, scheduling, staff travel, case management (at times), etc. on pages 10, 27, 29, and 33 are extensions of direct services. In other sections of the draft Guide similar activities of case management, planning, arranging, coordinating, staff travel, monitoring, documentation and record keeping are administrative claims. The draft Guide should not require school district employees to make unnecessary surgical distinctions among similar activities.

School district commenters recommend maintaining state and local flexibility in differentiating these claimable activities. The emphasis in the draft Guide should be on preventing duplication of services. This objective can be properly accomplished through maintaining the state flexibility to establish a clear coding and definition system that categorizes functions into discernible direct, and administrative activities. The validation process outlined on page 39 appears to already provide a failsafe mechanism for a flexible and non-duplicative process. However, this validation process must be reasonably efficient, and allow reviewing the aggregate, as opposed to burdensome individual by individual comparisons of time coded to administrative claims and to direct services claims.

Assigning Appropriate Responsibility for Ensuring the Ultimate Provision of Direct Services

School districts along with HCFA share the goal of ensuring that children, particularly the at-risk Medicaid and CHIP populations, are provided with the medical services and health care needed to maximize their individual potential. Just as it would be unfair and impractical to require an outreach provider to be responsible for each contacted individual being deemed eligible and ultimately provided direct Medicaid services, it is similarly unfair and impractical to link the payment of other administrative claims to the performance of each eligible direct service provider. A school district which performs an outreach and referral process with complete competence, for example, has no control and should not be financially responsibility for the performance of a managed care clinic, for example, that delays or fails to deliver the eligible referred service. In such an instance, there is a problem with the end line provider, even though the referral was performed properly. This failure of the direct service provider, ironically, could result in the necessity of a subsequent referral and a subsequent administrative claim.

There is no easy or simple answer regarding the responsibility for inadequate performance in subsequent components of the public health system. However, where there is a nexus between the referral agent and the direct service agent, there may arguably be a greater responsibility -- for example where the school district is both the referral agent and the direct service provider. Yet, requiring school staff to track thousands of eligible students provided with access and referral assistance to each end line provider of service, as suggested on pages 6, 16 and 17, may not be the most practical or cost effective solution. Also, requiring school staff to track referrals to eligible direct providers, ostensibly covered and furnished under a managed care contract or capitated rate on pages 6 and 9, may be similarly impractical. CHECK THIS! Moreover, referrals for disabled students processed under school confidentiality procedures have no differentiation of poverty status, and are "discounted" to the proportionate share of such Medicaid eligible students. The draft Guide, therefore, could necessitate staff monitoring of each end line provider for each disabled student – non-Medicaid, Medicaid and CHIP eligible. The Council has no ready solution for this dilemma, but proposes to work with HCFA to establish guidelines that delineate an appropriate responsibility linkage.

Example #2 on page 17, however, is troubling to the Council and numerous school district commenters. It presents a contrasting problem, though a desirable service outcome. Here, direct eligible services are provided by a school district that is not a Medicaid direct service provider due to its small size or preclusion by state law or state administrative action. Though such school districts provide administrative planning, coordination, case management and referral services analogous to example #3, it is often just as efficient and effective, and frequently more timely, for the nonprovider school district to deliver the eligible direct service themselves. Here the end goal of the Medicaid program to deliver needed medical and health related services has been met. In such instances where the nonprovider school district delivers the eligible direct service, school district commenters recommend that the associated administrative activities be allowable. While reimbursing for administrative services, the Medicaid program is saving money by having eligible Medicaid children served with school district funds rather than Medicaid funds. Since the ultimate goal is to ensure the provision of necessary medical services to eligible children, the Council recommends interpreting section 1903(c) "Nothing in this title shall be construed as prohibiting or restricting …", to make administrative claims in example #2 allowable, or as a less desirable alternative, interpret the same subsection to require the States to approve direct provider status for school districts.

The draft Guide appears to clarify by example #3 on page 17 that a school district, which is not a Medicaid participating direct service provider, may perform allowable administrative activities. This is a useful clarification.

Enhanced Rate Issues

While enhanced rates are described on pages 13-16, there is no delineation for where to code these enhance rates in the coding descriptions on pages 22-36. Therefore, the Council recommends that the FFP of 75% and 90% be added as appropriate to the 50% FFP now found in codes 1(b), 7(b), 8(b) and 9(b). Additionally, the Council recommends deleting the underscore of the word "and" in relation to family planning services on page 16, in order to encourage and facilitate outreach and referral to these important services. CHECK THE CFR REFERENCE HERE! Finally, the Council and many of our school district colleagues are puzzled by the list of mandatory SPMP criteria on page 14. The cross-reference in criteria VI to the State employer-employee relationship with the SPMP appears erroneous, having little applicability to the local agency-SPMP relationship. A modified reference to criteria I, II, III and V seems warranted. Further, such corrected cross-reference to an employer-employee relationship would not then exclude a locally contracted relationship for such professional services. Additionally, such a contracted professional may have a functional supervisory role over district-employed support staff, but as an independent contractor would not have a direct supervisory line of authority over these school district employees. A clarification that the SPMP must be functionally responsible for SPMP-related work of supporting staff would appropriately reflect school district operations.

Outreach Issues

States and their school districts must have the flexibility to design effective and efficient outreach activities that reflect the operational realities of identifying and screening potentially eligible children, not only for Medicaid but also for CHIP services. Efficient outreach practices for identifying the potential service population in a low-income central city school district will be quite different from the practices of identifying the potential service population in an affluent suburban county school district. In each instance, school-based outreach personnel rarely have direct access to state Medicaid or CHIP eligibility lists, in order to effectively narrow the "potentially eligible" pool. Improved access to such eligibility data clearly would improve the efficiency of outreach activities. However, absent such data sharing or presumptive eligibility through free and reduced priced lunch data, school districts will have adopted varied outreach procedures appropriately tailored to capture the potentially eligible individuals in their varied service areas. The importance of this state and local flexibility should be reflected in the outreach explanation on pages 23 and 24.

Time Study Issues

Most school districts submitting administrative claims use either cluster sampling or random moment sampling procedures. School district commenters recommend inserting the term "cluster sampling" after "random moment sampling" (on page 37 subpart V(B), paragraph 1, and on page 39 in the first partial sentence) in order to prevent the impression of preference for one allowable sampling methodology over another.

Citation to personal activity reports and equivalent documentation from OMB Circular A-87, section 11.h.(5) are duplicated on pages 7 and 36-37 in nearly identical form. However, page 7 paragraph 3 includes a useful clarifying note that the reference in the immediately proceeding paragraph is not applicable to conducting time studies. The note should be replicated on page 37. Additionally, the more complete citation to OMB Circular A-87 covering documentation, and the sampling system/substitute system exceptions "section 11.h.(4), (5) and (6)" should be added on pages 7 and 36.

In order to utilize certain time study codes, the draft Guide inappropriately directs the job descriptions of school district employees to reflect those HCFA administrative time study codes (see page 7, and more specifically on pages 30 and 31). Requiring the time study methodology "include a description of the job classifications to be sampled" would appear to suffice (see final paragraph of page 42) without the additional job description requirements. HCFA should note that school districts are often the largest employer in their community, and for some of the Great City Schools, among the largest employers in their states. Revising job descriptions within such large personnel systems is a sizeable task that also may require collective bargaining to accomplish. These references to job description, therefore, should be deleted, since the employee is already functionally coding and attesting to their time in each activity.

As noted above, under the comment on the relationship between direct/extension claims and administrative claims, validation of time studies in comparison to direct services is an appropriate procedure to avoid duplication in claiming. However, clarifying the acceptability of a reasonable validation review of the aggregate, as opposed to an individual by individual comparison (see page 39) of time coded administrative to direct service activity is recommended. An individual by individual validation would entail a major administrative burden and a major unnecessary cost to the program. Adding "aggregate" to proceed "administrative time study results" on page 39 paragraph 4 would provide this clarification. An additional clarification by deleting "universe" in the staff training explanation on page 39 paragraph 5 is warranted. It is unnecessary to train all staff in the time study process when only the "sampled" staff will be involved.

Inappropriate Exclusions of State Funded Activities and Staff

A clarification is needed on page 38 to ensure that "third party payers" used in the context of the sample universe for time studies excludes staff funded by state and local governmental units. Virtually all local school district staff, whether involved in the time study or not, are supported by state or local funds. To consider staff supported by state and local funds as having 100% of their costs covered by a "third party payer" would exclude virtually all school district staff from the time study and frustrate the underlying purpose of administrative claim reimbursement.

School district commenters generally agree with excluding federally funded program staff from the sample universe. School district commenters suggest that the duplicate payment statements regarding administrative activities paid for with local or state program funds on page 8 are not appropriate. School districts view the Medicaid program as a financial partner reimbursing an established percentage of the costs of state and locally funded program activities. It is, therefore, recommended to strike "some other local, State or" as well as "State, local, and" in paragraph 3 on page 8. The invitation to appeal to the HHS Department Appeal Board in this same paragraph does not reflect practical guidance on this issue in the opinion of the Council.

School district commenters are generally troubled by the exclusion of state-mandated services, which often are created to serve medically at-risk children. State mandated screening, whether or not paid for with state funds, proliferate year after year -- vision, hearing, asthma, scoliosis, etc. State and local governments should not have to bear these costs alone. The Council finds it difficult to believe that the "third party liability" in Medicaid was intended to apply analogously to units of state and local government as to private insurers.

Concern Over Medicaid Matching Exclusions

The section of the draft Guide on Offsetting Revenues (page 40) suggests certain exclusions in the Medicaid claiming process due to use of local expenditures to meet the required state matching requirements. This issue has raised grave concerns in the vast majority of school district comments received by the Council. School districts view the Medicaid partnership as reimbursing a percentage of school outlays for eligible services to eligible children. It is acknowledged that the manner in which the State claims and documents the required Medicaid State match is not within school district control. Yet school district funds comprise a sizable portion of that match. If the state uses our entire local contribution submission as part of the state match, school districts are extremely concerned over potential exclusion of a sizable number of staff from the administrative time study, and in turn the exclusion of an equivalent amount of Medicaid claimed reimbursements. The draft Guide, with limited exceptions, should direct reimbursement to the school district of the entire federal financial percentage attributable to our school district contribution to the state match.

Delayed Services for Children due to Expansion of HCFA Approval Requirements

The draft Guide is replete with references to required HCFA or HHS review and/or approval for a variety of school-based Medicaid procedures and plans (pages 2, 4, 5, 6, 16, 20, 41, and 43). In certain instances, HCFA acknowledges the lack of explicit approval authority, but crafts an implicit authority. In other instances, approval authority is derived by reference to another federal authority, such as Circular A-87, to justify review and approval of a program component or a related component. The problem is not solely the expansion of agency authority through this nonregulatory guidance, but the historic difficulty in securing HCFA approval on issues under its current practices. School districts fear that substantial delays in services to children and in the Medicaid reimburse to the school districts will result from these expanded approval requirements. School districts recommend that states continue their approval authority as equal partners in the Medicaid program, and that HCFA reduce the areas where federal approval is needed.

Perpetuating Erroneous Transportation Interpretations

Since the issuance of the May 21, 1999 letter detailing transportation policy interpretations by HCFA, school districts have attempted to point out certain problems with the interpretation. Although the May 21, 1999 transportation policy is not entirely inaccurate, the draft Guide does perpetuate those interpretation problems. HCFA should not attempt to prescribe to schools the proper content of an IEP. The blanket interpretation that a disabled child riding a regular bus with non-disabled children to the neighborhood school should not have transportation written into the IEP is clearly wrong for many instances. Many disabled children may be receiving specialized transportation services on a regular school bus. Specialized trip routing, door to door service, other special accommodations, specialized training of the driver or a bus aide are only a few of the transportation services appropriate on an IEP. Moreover, federal law prohibits nonessential segregation of disabled children, including during transportation services. The "specially equipped vehicle" policy of HCFA continues to offer a disincentive contrary to the least restrictive environment policy of the Congress in civil rights law. The draft Guide on page 46 and the May 21, 1999 HCFA letter require a number of revisions, primarily to focus on the "special service" rather than the "special vehicle".

 

 

PAGE BY PAGE COMMENTS

 

(AND CLOSING STATEMENT)

 

TO BE ADDED