In the state of Massachusetts, the Medicaid program is administered by MassHealth, which works jointly with the School-Based Medicaid Program (SBMP), and is administered by the University of Massachusetts Medical School (UMMS). Our team of medical billing and coding experts helps systems just like yours with Medicaid Billing For Schools.

Program Overview

In the state of Massachusetts, school children can be enrolled in the Medicaid program, so as to have access to benefits which are made available to them through state and federal funding. Matching funds from the Federal Financial Participation program are made available to participating LEA’s who are members of the school-based Medicaid program. Reimbursement for SBMP services and for the administration of activities is based on allowable costs which are incurred by the LEA’s.

When a claim is made through MassHealth, the state is authorized to pass along that claim so as to receive federal funding for administrative activities and direct services, which have previously been approved by the Centers for Medicare and Medicaid (CMS). There are three major components to the SBMP, which include direct service claims submitted to MassHealth, administrative activities claims, and the Random Moment Time Study, each of which will be explained in detail below.

Direct Service Claiming

The program known as Direct Service Claiming (DSC) provides a channel through which LEA’s can seek federal reimbursement for Medicaid-provided services delivered in their schools. These types of direct medical services include physical and occupational therapies, speech therapies, counseling of a psychological nature, audiology services, skilled nursing, personal care services, and therapy services considered to be in the arena of Applied Behavior Analysis (ABA).

Up until July 1, 2019, any of these services covered by Medicaid can only be reimbursed when they are provided in concordance with a student’s Individualized Education Plan (IEP). After July 1, the program will be expanded to include reimbursement for all services covered under Medicaid, even without the IEP accompaniment.

This will now include such additional services as behavioral health screenings, fluoride varnish treatments, and many other services which are ordered by a physician, a nurse practitioner, or a physician assistant, as deemed medically necessary. When the fiscal year concludes on June 30, all LEA’s are required to submit a Cost Report which details the total allowable costs incurred by the LEA during the previous fiscal year. This Gross Medicaid Reimbursable Amount report must necessarily be submitted with a certification that verifies the accuracy of all claims listed on the report.

Administrative Activities claims

The program identified as the Administrative Activities Claiming (AAC) program works to reimburse government agencies for allowable costs related to Medicaid administrative functions. Reimbursement for the AAC element of SBMP services centers around allowable incurred Medicaid costs which are related to the execution of Medicaid administration activities, as described by the Random Moment Time Study (RMTS).

All these expenditures are detailed quarterly, under the administrative claim made in the Massachusetts School-Based Medicaid program. Examples of the allowable administrative expenditures which would be reimbursed under the program include all of the following:

  • transportation expenditures of a specialized nature
  • tuition expenditures that are out of district
  • supply and material costs which are supporting Medicaid administrative activities
  • employer-paid benefits and staff salary expenditures
  • capital costs which are derived by applying a pre-set capital percentage allocation rate
  • indirect costs derived by applying a DESE indirect cost rate.

Random Moment Time Study

In order to quantify the actual portion of reimbursable staff time claimed through direct service claims and administrative activity claims, the method known as the Random Moment Time Study is imposed. At random moments through the entire school year, LEA staff time is sampled by having pool respondents provide answers to questions about what they were doing at a specific random moment in time. After compiling statewide results from these responses, the methodology then generates a statistically valid proportion of reimbursable time for each of the respondent pools participating in the survey.

This entire process is carried out online using the Massachusetts RMTS system and is designed to be as quick and unobtrusive as possible. The results of the statewide RMTS survey are combined with costs relative to each provider and are then submitted in an annual cost report, so as to determine the level of reimbursement appropriate for Direct Service Claiming, as well as for Administrative Activity Claims.

SBMP, MassHealth and Medicaid Billing For Schools

MassHealth is the agency that oversees the School-Based Medicaid Program in Massachusetts. The organization develops policies as well as ensures that schools are in compliance with federal and state regulations for the Medicaid program. The University of Massachusetts Medical School works with MassHealth to administer SBMP. LEAs must seek reimbursement through MassHealth. The contracting process begins through the MassHealth Provider Enrollment Center.


While there is currently a requirement that direct services be through an IEP, this requirement will be lifted beginning July 1, 2019. In addition, additional provider types and services will be added through an effort called Expansion. The goal of the Expansion is to broaden the program and to provide services for students that may not be associated with an IEP. Specifically, services will be covered if they are part of a section 504 plan, an individual health care plan (IHCP), an individualized family service plan (IFSP), any state-mandated screenings, and some services deemed medically appropriate. This broadens access to reimbursement significantly to include nutritionists, school psychologists, respiratory therapists, dental hygienists, and other health care professionals working through educational institutions. The four pools of services acceptable under the Expansion are medical services, therapy services, behavioral/mental health services, and administrative services.

To help make this transition easier, the SBMP will offer training as well as updated website information and documents in the SBMP Resource Center.

Training programs include:

  • RMTS
  • Cost Report
  • Administrative Claiming
  • Interim Claiming

Training dates will be made available to LEAs.

Program guides will be made available for:

  • RMTS User Guide
  • SBMP Administrative Claims Instruction Guide
  • Massachusetts School-Based Cost Report Instruction Guide
  • SBMP User Guide
  • Procedure codes and interim rate bulletin for providers

Challenges to keep in mind

There is a difference between a covered service and a reimbursable service. Even though a service may be included in what is covered and reimbursed, there are requirements that must be met in order for reimbursement to take place. Along with factors like parental consent, a reimbursable service must be part of the direct service pool and documented correctly. If a service does not meet reimbursement requirements, even if it is covered under the program, it will not be reimbursed.

Parental consent is needed for the service in order for it to be reimbursable. In alignment with federal law as well as the Department of Elementary and Secondary Education’s (DESE’s) student records regulations, parental consent is required for reimbursement. LEAs should only submit claims for MassHealth-enrolled students after parental consent has been obtained. In addition, only students from whom parental consent has been obtained should be included in Medicaid eligibility statistics. A sample parental consent form can be found on DESE’s website. The link for the sample form can also be obtained from MassHealth.

LEAs are directly involved in the process. Updated contact requirements mean that LEAs are involved in most processes rather than relying on billing vendors. It is the LEAs who is the contracted provider. It’s important to remember that LEAs are the entities audited by agencies like MassHealth.


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