Medicaid Reimbursement in Schools Medicaid is the federal/state program that pays for certain health care services for low-income individuals and families. Medicaid reimbursement for services provided in public schools was authorized by Congress in 1989 (Medicare Catastrophic Coverage Act of 1988). The following questions address major issues related to billing and payment for school-based ... Bottom Line
Bottom Line  |   September 01, 2010
Medicaid Reimbursement in Schools
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School-Based Settings / Practice Management / Bottom Line
Bottom Line   |   September 01, 2010
Medicaid Reimbursement in Schools
The ASHA Leader, September 2010, Vol. 15, 3-29. doi:10.1044/leader.BML1.15112010.3
The ASHA Leader, September 2010, Vol. 15, 3-29. doi:10.1044/leader.BML1.15112010.3
Medicaid is the federal/state program that pays for certain health care services for low-income individuals and families. Medicaid reimbursement for services provided in public schools was authorized by Congress in 1989 (Medicare Catastrophic Coverage Act of 1988). The following questions address major issues related to billing and payment for school-based services for Medicaid-eligible children. This information and additional materials were developed by the ASHA Schools Finance Committee, State Advocacy Team, and Health Care Economics and Advocacy Team, and are available in the Medicaid reimbursement section of ASHA’s web site.
Q: Why do schools bill Medicaid for speech-language pathology and audiology services provided in the school setting?
The federal Medicaid program allows states to use their Medicaid funds to help pay for certain health care services that are delivered in the schools, with the condition that federal Medicaid regulations are followed. For many children, schools are the primary entry point for receiving needed health and social services. Section 1903(c) of the Social Security Act was amended to allow Medicaid coverage of health-related services provided to children under the Individuals with Disabilities Education Act (IDEA).
Q: Are the professional qualification requirements of a speech-language pathologist or audiologist under Medicaid in the schools the same as in health care facilities or private practices?
Yes. Federal regulations require that services be rendered “by or under the direction of” an SLP or audiologist. The regulations define a qualified SLP or audiologist as one who has a CCC from ASHA or has completed the equivalent educational requirements and work experience necessary for the certificate. Requirements differ in the two states that do not have licensure programs for SLPs (Colorado and South Dakota). Qualifications vary by state for those who serve as an assistant or “under the direction of” a qualified SLP or audiologist.
Q: How do schools use Medicaid funds?
Each state’s Medicaid plan outlines how a district may use Medicaid revenue. Medicaid reimbursement may go to the district’s general fund and be used in a variety of ways, including:
  • Individualized Education Program implementation

  • School health services

  • The hiring of staff or salaries for services provided

  • Books, supplies, or other school-related expenses

  • Assistive technology or FM systems

  • Tube-feeding expenses

Schools that receive Medicaid funds for services may return those funds to the program that provided the service. Some school districts, for example, will use funds received from Medicaid for hearing and speech-language services to create innovative intervention programs or to cover SLPs and audiologists’ licensing and association fees, professional development/continuing education, and technology for staff.
Q: How can I get Medicaid funds generated by SLPs or audiologists in my district back into the speech-language or audiology budget?
  • Talk with your colleagues. Find two or three colleagues who share your interest and are willing to work with you. Also try to find a colleague who has been successful in this endeavor. Gain support and learn from others.

  • Do your research. Learn how much in Medicaid funds the SLPs or audiologists are generating for the district. Identify the benefits of allocating the funds to speech-language and hearing programs, not only for the SLPs or audiologists but also for the district. Identify the decision-makers (supervisor, principal, teachers union, or others) and build relationships with them—their support will be critical to achieving your goal.

  • Prepare and present your case. Know exactly what you are asking for and how the funds will be used by the SLPs or audiologists. Remember that the more knowledgeable and prepared you are, the more you will understand what is best for you, your colleagues, and your students.

Q: School administrators have asked me to sign Medicaid claim forms for students who receive services from non-ASHA-certified providers. Can I do that?
The Centers for Medicare and Medicaid Services (CMS) has provided some guidance on supervision but the issue remains unclear. According to federal Medicaid regulations, “Services for individuals with speech, hearing, and language disorders” mean diagnostic, screening, preventive, or corrective services provided by or under the direction of an SLP or audiologist for which a patient is referred by a physician or other practitioner of the healing arts (Code of Federal Regulations, Title 42, section 440.110[c]).
However, there are no federal regulations on how persons providing services “under the direction of” qualified personnel should be supervised. CMS offered an interpretation of “under the direction” within the context of school-based services in 1992, noting that the “direction” requirement means that a qualified (i.e., ASHA-certified or equivalent) SLP must see the student at least once, prescribe the type of care provided, and periodically review the need for continued services. CMS concluded that the qualified SLP accepts ultimate responsibility for intervention provided.
Schools and state Medicaid agencies may establish vague supervision policies that are not consistent with those of ASHA or CMS. ASHA addresses the issue of the “under the direction of” rule in a position statement and technical report. These guidelines can be used as a starting point for negotiations with the school district.
Q: Can school districts require SLPs and audiologists to submit additional documentation for the purposes of billing for their services?
Yes. ASHA has heard from many members that the documentation required by school districts can put a strain on already heavy workloads. To assist with this issue, ASHA has developed “Lighten Your Load: Strategies to Reduce Paperwork for School-Based SLPs.”
Q: Can ASHA-certified clinicians in the schools request a salary supplement for their participation in third-party billing?
Yes. For example, clinicians in Minneapolis public schools were making little progress in their efforts to garner a salary increase until the school district started to bill Medicaid for speech-language pathology services. Because the state required clinicians to have ASHA CCCs (or equivalent) for third-party billing but not to work in the schools, Minneapolis clinicians used the opportunity to push for a salary increase for those holding voluntary national certification. ASHA certification had value as the district began collecting reimbursement to support students in special education and could receive significant reimbursement by having ASHA-certified SLPs fully participate in third-party billing. As a result, the certified SLPs received an annual salary increase of more than $1,500.
Q: What are common reasons for auditors to ask for repayment of school Medicaid claims?
Use of unqualified providers, insufficient documentation, and missing or inappropriate referrals are common reasons for repayment of federal funds (see “Medicaid Audits Reveal Deficiencies in Schools,” The ASHA Leader, Aug. 3, 2010).
Regional Medicare Edits Target Dysphagia Coding

A major Medicare administrative contractor recently indicated that approximately $5 million (17%) of the $30 million in Part B claims for dysphagia services submitted from January through June 2009 would have been denied if new regulations had been in place.

According to an explanation provided to ASHA, the claims failed to use an ICD-9-CM code that indicates the phase of swallow diagnosis. Because the services were provided in a facility (primarily hospitals and skilled nursing facilities), the adminstrator’s notice labels the services as Part A claims even though the claims were reimbursed under Medicare Part B.

National Government Services (NGS), the Medicare administrative contractor for 10 states, based its notice, “Dollars at Risk for Local Coverage Determination L27364,” on a review of 2009 claims. As a Medicare contractor, NGS develops and implements local coverage determinations (LCDs) for a variety of Medicare services. To help ensure that claims are paid based on the medical necessity parameters of the LCD, claims processing edits are created for the services addressed by the LCDs.

NGS indicated that dysphagia edits that call for the identification of the phase of swallow diagnosis became effective in its LCD of July 1, 2009, and that ICD-9-CM coding of dysphagia in the audited claims would have been inappropriate according to those edits.

Because contractors like NGS are beginning to review dysphagia claims carefully, proper diagnostic coding is a must. Providers should avoid submitting claims with the code 787.20 (“Dysphagia, unspecified”) because a specific phase of swallow should be identified (see below). The 787.20 code may be used as an initial diagnosis prior to the clinical and/or instrumental assessment.

The phase-specific codes include:

  • 787.20, Dysphagia, unspecified

  • 787.21, Dysphagia, oral phase

  • 787.22, Dysphagia, oropharyngeal phase

  • 787.23, Dysphagia, pharyngeal phase

  • 787.24, Dysphagia, pharyngoesophageal phase

  • 787.29, Other dysphagia

The LCD L27364 requirements are available at Centers for Medicare and Medicaid’s web site.

Mark Kander, director of health care regulatory analysis, can be reached at

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September 2010
Volume 15, Issue 11