On September 6, the U.S. Department of Education (DOE) Office of Special Education and Rehabilitative Services (OSERS) announced its intent to amend its regulations to eliminate the requirement for a local education agency (LEA) to obtain parental consent “each time” the LEA seeks to access a student’s public insurance (Medicaid) benefits.  This action by OSERS culminates a five-year lobbying effort by school districts, states and advocates across the country to eliminate the burdensome requirement.

Under the 1974 Family Educational Rights and Privacy Act (FERPA) and implementing regulations, LEAs are required to obtain parental consent prior to disclosing personally identifiable student information contained in a student’s education records.  Since 1990, LEAs have billed Medicaid for covered services provided to Medicaid-eligible students in accordance with the student’s individualized education program (IEP) under the Individuals with Disabilities Education Act (IDEA).  A 1997 advisory letter from DOE clarified that FERPA requires LEAs to obtain written and signed parental consent prior to disclosing personally identifiable student information to a state Medicaid agency for Medicaid billing purposes; however, the frequency of consent was not specified.  Several subsequent DOE advisory letters confirmed its parental consent policy with regard to the disclosure of student information to a state Medicaid agency.

OSERS’ 2006 regulations to implement the 2004 reauthorization of IDEA included a new requirement, at 34 CFR 300.154(d)(2)(iv)(A), that LEAs must obtain parental consent “each time” access to a student’s Medicaid benefits is sought.  The new frequency requirement caused confusion and consternation since most LEAs submit student information to their respective state Medicaid agencies for billing purposes at least monthly.  A strict interpretation of the new regulation would require LEAs to obtain consent multiple times each year.  OSERS subsequently provided, in non-legally binding advisory letters, that “each time” means at least annually and any time during the year that services are increased.  Although helpful, the OSERS clarification did not alleviate the administrative and financial burdens faced by LEAs in attempting to obtain parental consent to bill Medicaid multiple times. 
In the Preamble to the proposed amendment to eliminate the “each time” requirement, OSERS acknowledged the deluge of statements of concern it received about the burdens faced by LEAs because of the increased frequency of obtaining consent to bill Medicaid.  OSERS particularly acknowledged information presented by the National Alliance for Medicaid in Education (NAME) based on NAME’s 2009 Biennial Survey that collected information from education and Medicaid agencies.  According to the Preamble, the NAME Survey results effectively demonstrated to OSERS  that “the regulation requiring parental consent to bill Medicaid each time that access to public benefits or insurance is sought had a direct negative effect on an LEA’s ability to bill Medicaid” for covered services provided to Medicaid-eligible students.  OSERS pointed out the IDEA specifically intended that Medicaid payments would be available to LEAs to the extent consistent with Medicaid law.

Although parental consent to bill Medicaid is still required under the proposed amendment to 34 CFR 300.154(d)(2)(iv), the frequency of obtaining consent is not dictated, consistent with FERPA.  Under the proposed amendment, the LEA would be required to provide parents with a one-time written notice that includes the following statements:

1. Parental consent must be obtained in accordance with FERPA before the LEA can disclose personally identifiable student information to the Medicaid agency for billing purposes;
2. the student’s Medicaid benefits may not be used if that use would negatively impact other public benefits;
3. parents have the right under FERPA to withdraw their consent at any time; and
4. withdrawal or refusal of consent does not relieve the LEA of its responsibility to provide required IDEA related services at no cost to the parents.

In the Preamble to the proposed amendment, OSERS stated that “Thus, under these proposed regulations, the public agency would no longer be required to obtain parental consent each time that it seeks access to public benefits or insurance… The exact timing and frequency of a public agency’s provision of the one-time written notification to the parent would be at the discretion of the public agency, so long as the public agency provides the notification before the public agency seeks access to the child’s or parent’s public benefits or insurance.”

As of September 8, 2011, the proposed amendment has not been published in the Federal Register; however, an unofficial version is available on the OSERS Web site: http://www2.ed.gov/about/offices/list/osers/news.html.