On August 16, 2006, the U.S. Department of Education (USDE) Office of Special Education and Rehabilitative Services (OSERS) published in the Federal Registers its final regulations for the Individuals with Disabilities Education Act (IDEA) (FR Vol. 71, No. 156). The regulations included a new provision requiring a local education agency (LEA) to obtain parental consent each time the LEA seeks to access a student’s public insurance benefits (34 CFR §154 (d)(2)(iv)(A)). As a result of this new requirement, many local education agencies (LEA) across the country have experienced significant increases in costs and administrative burdens in the administration of their school-based Medicaid billing programs.

LEAs provide special education related services to students with special needs. The related services provided by LEAs often include speech pathology, audiology, nursing, physical therapy, occupational therapy and behavioral health services as specified in the student’s individualized education program (IEP). Many students that receive related services are eligible for Medicaid (public insurance) benefits and LEAs bill Medicaid for covered services in accordance with Federal and State Medicaid laws and regulations. LEAs usually submit claims to Medicaid on a bi-weekly, monthly or quarterly basis. Obtaining parental consent “each time” services are billed would be impracticable for most school districts from both a financial and administrative standpoint.

To address concerns expressed by LEAs and others regarding the frequency of obtaining parental consent, the Director of the Office of Special Education Programs (OSEP), administered by OSERS, issued at least three advisory letters in 2007 defining “each time” to mean that the LEA must obtain parental consent annually and that a new consent must be obtained during the year if the types and/or volumes of services needed by the student increased. The consent form must indicate the types and volumes of services for each child and the OSEP Director advised that the LEA can bill Medicaid up to the volumes specified in the consent form. The OSEP Director also advised that a parent could give consent to the Medicaid agency, in lieu of the LEA, as long as the consent meets the standards in the IDEA regulation at 34 CFR §300.9 and the LEA must maintain in each student’s record a copy of the signed consent his/her parent gave to the Medicaid
agency.

Even with the clarifications, LEAs still find the IDEA consent requirement burdensome and costly. Creating potentially hundreds of consent forms each year customized for each student to specify the types and volumes of the services the student will receive during the year is neither practicable nor financially feasible for many LEAs, especially if the consent forms must be manually prepared by LEA staff. Other health service providers are not required to obtain patient consent to bill Medicaid in such an extreme manner.

After examining the potential added costs and administrative burdens of the IDEA requirements, some LEAs reportedly discontinued Medicaid billing. Other districts coordinated with their respective state education agencies to develop strategies to comply with the OSEP advisory letters. These strategies often involved training designated staff to discuss the IDEA consent requirement with the parents of Medicaid-eligible students during IEP meetings each year. The designated LEA staff is usually someone involved with coordinating the special education services needed by the student. The discussions with parents about consent to bill Medicaid can unduly distract the LEA staff and the parent from the real subject at hand during an IEP meeting – addressing the child’s needs for special education and related services.

LEAs are familiar with obtaining parental consent in accordance with the Family Educational Rights and Privacy Act (FERPA) guidelines which require LEAs to obtain parental consent prior to disclosing personally identifiable student information to the state Medicaid agency. The IDEA requirement for parental consent to access Medicaid benefits is duplicative of FERPA requirements and, at best, should not be required more frequently than once. In most states, no other parental consent forms in the IEP review process are required to be signed annually by parents. Requiring consent forms for Medicaid billing to be signed by parents at each annual IEP review is burdensome for LEA staff and confusing to parents. Further, the excessive consent process for Medicaid billing does not serve any IDEA purpose that is not already addressed by FERPA guidelines.

Obtaining annual parental consent under the IDEA regulation is further complicated by the fact that the IDEA statute and supporting regulations do not require parents to attend the annual IEP reviews. When a parent elects not to attend an IEP meeting or the IEP team determines that an IEP meeting is not required, LEA staff members must use other means to attempt to obtain the consent. Usually this involves the expenditure of human and financial resources to mail the consent form to the parent and place follow-up phone calls, which can be costly. Further, mailing the consent forms containing personally identifiable student information can actually cause violations of FERPA because of misdirected mail due to family address changes.

The costs and administrative burdens referenced above could be avoided if OSERS changes its requirements regarding parental consent given to the LEA. The IDEA regulation at 34 CFR §300.154(d)(2)(iv)(A) can be revised to require the LEA to obtain parental consent only one time in order to seek access a student’s public health insurance benefits. This change would be consistent with the USDE Secretary’s intent as reflected in the Preamble of proposed IDEA regulations published in the Federal Register in 2005 at 70 FR 35782. On page 35791, the Secretary stated: “Proposed § 300.154(d) (2) (iv) would include a new provision that to access the parent’s public insurance proceeds, the public agency must obtain parental consent, in accordance with proposed § 300.622 the first time that access is sought …” (emphasis added).

When the final IDEA regulation was published “first time” was replace with “each time.” This change can be reversed by inserting the original language.Alternatively, the regulation can be deleted and OSERS can allow LEAs to obtain parental consent in accordance FERPA, which had been sufficient for more than 30 years prior to the publication of the final IDEA regulation.

The OSEP Director’s expressed concerns about the parent’s right to know how much an LEA is billing Medicaid for services provided to his/her child is addressed in the child’s IEP. The IEP specifies the type and volume of each related service that the LEA will provide, including services that may not be billable to Medicaid. The LEA provides the parent with a copy of the IEP and the specific information about the services does not need to be duplicated in the consent form.

The National Alliance for Medicaid in Education (NAME) and LEAnet, advocate organizations for school-based Medicaid billing, are leading a national initiative for school districts to provide OSERS with information about the negative administrative and financial impact of the 2006 requirements for obtaining parental consent to bill Medicaid. For more information about the initiative, contact jhill@doe.in.gov.

For further information please contact your local Public Consulting Group representative or:

Patsy Crawford, Director of Legal Services
PCG Education
Phone: (312) 425-0550
Email: pcrawford@pcgus.com
PCG Education™ Public Focus. Proven Results.™

*Note: This document is not intended as legal advice and is for informational purposes only.