Massachusetts public schools participating in school-based Medicaid claiming may soon see a revenue boost thanks to a CMS reversal of its long-standing Medicaid free care rule. This surprising reversal essentially allows schools to bill Medicaid-covered services for all students—even when those students don’t have a documented Individualized Education Plan (IEP).

In a letter to state Medicaid directors dated December 15, 2014, CMS formally withdrew its prior guidance on the free care policy with the goal of being able “to facilitate and improve access to quality healthcare services and improve the health of communities.”

These developments come in the wake of two other states—California and Oklahoma—successfully challenging the free care rule that had, for years, stated that schools may not use Medicaid funds to pay for covered services that are provided for free to the entire student population.

Both states successfully argued that this rule was not based on federal statute. However, many states—including Massachusetts—have continued to apply the rule due to a lack of technical guidance as well as confusion over whether schools nationwide—or only those in California and Oklahoma—could qualify for federal reimbursement.

In its 2014 letter, the agency goes on to state the following:

Under this guidance, Medicaid reimbursement is available for covered services under the approved state plan that are provided to Medicaid beneficiaries, regardless of whether there is any charge for the service to the beneficiary or the community at large. As a result, Federal Financial Participation (FFP) is available for Medicaid payments for care provided through providers that do not charge individuals for the service, as long as all other Medicaid requirements are met.

States nationwide are slowly coming on board to follow in the footsteps of California and Oklahoma. Massachusetts, for example, may announce statewide changes as soon as October. Once schools are able to expand Medicaid billing for all students, they could see a significant increase in reimbursement—particularly related to nursing services. According to, health advocates see this policy change as an opportunity to develop programs in public schools to help students understand and manage chronic conditions such as asthma, diabetes, and mental illness. In some cases, the additional reimbursement may also be able to help schools hire more nurses. According to the National Association of School Nurses, more than 30% of schools only have a part-time nurse, continuing to drive a school nursing shortage nationwide.

Medicaid-covered services include speech therapy, occupational therapy, physical therapy, audiology services, counseling, nursing services, personal care, behavioral health, and applied behavior analysis.

What can your school do now to prepare for potential changes? Consider these tips:

  1. Review all of your vendor’s services. Does your vendor have experience in school-based Medicaid claiming along with compliance for HIPAA and the Family Educational Rights and Privacy Act (FERPA)? If you haven’t done so already, you’ll need to find a vendor that understands the Medicaid program and all of its requirements. 
  1. Think ‘data integration.’ To bill for a potentially increased volume of Medicaid-covered services, schools must ensure that their billing vendor can streamline the process as much as possible. Has your vendor initiated meetings with various stakeholders to streamline data flow within the school nursing office along with other school departments? Or must the school absorb additional costs to enable that interoperability?
  1. Ensure that documentation is meeting standards. Schools will only receive additional reimbursement when all documentation and billing requirements are met. Specifically, documentation must include the following elements: School district name/provider number, provider credentials, student name, student date of birth, student Medicaid number, date of service, activity/procedure note (including whether the activity/procedure was performed individually or as part of a group), service time, and signatures. Note that thorough and complete documentation also mitigates the risk of a third-party audit.
  1. Seek out resources. For up-to-date information about school-based Medicaid billing, refer to the National Alliance for Medicaid in Education, Inc. (NAME). To learn more about compliant Public School-Based Medicaid Claiming, call Jennifer White at NEMB at 508-297-2068 x233.


About NEMB

New England Medical Billing is a leader in School-based Medicaid claiming and administration. We are a fully HIPAA-compliant Medical Billing Management and Administrative Service Firm. Our expertise is in program and system design as well as effective implementation and administration. Our multi-disciplinary approach and attention to detail consistently yields the maximum allowable returns on every client project.

Since 1993 NEMB has been built carefully, approaching each new engagement using proven management methods. Our superior, time-tested approach is applied to each and every engagement. We “zero-base” every new proposal to build a process that fulfills the unique requirements and goals of each project.

Our billing administration experience in ambulance & EMS services, emergency departments, school-based Medicaid claiming and private physician practices has honed and streamlined our clients’ operations in capturing and maximizing revenue opportunities on a large scale.


Need more information or have questions on any type of billing we do?

Affiliates of VSS Medical Technologies

Sign up for company updates and latest news from NEMB.

Get In Touch 


888 - 771 - 6115
508 - 297 - 2068

19 Norfolk Avenue
South Easton, MA 02375


©Copyright 2024 New England Medical Billing Group LTD. All rights reserved.