“Relationship Between Special Education and Medicaid”

Dennis C. McAndrews, Esquire

I)     History of Federal Education Entitlement

A)   PARC Consent Decree of 1972

B)   Rehabilitation Act of 1973 and its 1975 regulations

C)   Education for All Handicapped Children Act of 1975

1)    Emphasis on access to special education

2)    Creation of the Free Appropriate Public Education (FAPE) and Least Restrictive Environment (LRE) standards

3)    Funding for research begins in earnest

4)    Court cases gradually recognize that

(i)   “Education” means more than academics, and involves all school-based needs, including academic, social, emotional, and behavioral domains, and

(ii)  Federal law requires FAPE to involve meaningful educational benefit toward independence and self-sufficiency in light of the child’s potential

5)    Pennsylvania’s Cordero decision in 1993 held that a variety of agencies other than local school districts have overlapping obligations to provide FAPE:

“In light of the fact that relevant programs and resources are distributed among Commonwealth agencies, Defendants must pursue an interagency approach to remedy in this case. For some children, an appropriate public education must include services and/or placements currently associated with systems such as the Mental Health, Mental Retardation, and Children and Youth systems that are operated and supervised at the Commonwealth level by the Department of Public Welfare; in these instances, moreover, such services or placements must be provided at no cost to the family.”

D)   IDEA Reauthorizations of 1997 and 2004

1)    Emphasis on educational results, not mere access

2)    Clarifies that FAPE involves meaningful progress in a child’s functional performance, which includes social, emotional, and behavioral functioning

3)    Clarifies that educational agencies must coordinate their activities with other relevant agencies, including Medicaid agencies, and allows educational agencies to pursue Medicaid funding

–        Pennsylvania created a Memorandum of Understanding (MOU) in 1999 to resolve funding disputes among state and local agencies regarding responsibilities to provide FAPE

4)    Requires robust and effective Transition Plans based on appropriate assessments and community-based programs

5)    IDEA – 2004 requires that Specially Designed Instruction and Related Services be based upon Peer-Reviewed Research

II)   Critical and Practical Considerations Regarding Medicaid and FAPE

A)   All children with disabilities in Pennsylvania are eligible for Medicaid without regard to parental income or the child’s own resources, but a child’s own income may be considered (generally not disqualifying)

B)   The concept of “Medical Necessity” in Pennsylvania is very broad, and is found at 55 Pa. Code §1102.21a:

“Clarification regarding the definition of “medically necessary” – statement of policy.  A service, item, procedure or level of care that is necessary for the proper treatment or management of an illness, injury or disability is one that:

1)    Will, or is reasonably expected to, prevent the onset of an illness, condition, injury or disability.

2)    Will, or is reasonably expected to, reduce or ameliorate the physical, mental or developmental effects of an illness, condition, injury, or disability.

3)    Will assist the recipient to achieve or maintain maximum functional capacity in performing daily activities, taking into account both the functional capacity of the recipient and those functional capacities that are appropriate of recipients of the same age.”

C)   Medicaid in Pennsylvania includes Wraparound Services in the home

D)   The overlap between Education and Medicaid is expressly recognized in federal special education regulations, and while educational agencies must insure that FAPE is provided, the responsibility to fund “overlap” services falls last upon education agencies, and the 1999 MOU is designed to address financial disputes among public agencies 34 C.F.R. §300.154

E)    Managed Care For Behavioral Health in Pennsylvania provides incentives to deny or reduce services

F)    The responsibilities of state and local Mental Health and Mental Retardation Administrations to provide appropriate, “Normalized” services is broad and stretches from cradle to grave.  Pennsylvania’s Interagency process is available to pursue solutions involving multiple agencies

G)   The Commitment Processes under the Mental Health and Mental Retardation Act and the Mental Health Procedures Act can be used to obtain a wide variety of services, including residential and community-based services

H)   The Juvenile Court Dependency System may be used to obtain services for “Incorrigible” children

I)     An underused service in obtaining fully appropriate programming is the Extended School Day– States other than Pennsylvania are sometimes more open to providing Extended School Day Programs

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