The Centers for Medicare and Medicaid Services has issued a proposed rule regarding Medicaid reimbursement for school-based administration and transportation that is expected to save taxpayers approximately $635 million in federal funds during the first year and $3.6 billion in federal funds over five years. Improper billing by school districts for administrative costs and transportation services under Medicaid is a longstanding concern of the Department of Health and Human Services (HHS), and both HHS’ Office of Inspector General and the Government Accountability Office have identified these categories of expenses as being susceptible to fraud, waste, and abuse.
The proposed rule would eliminate reimbursement under the Medicaid program for the costs of certain activities if the HHS secretary finds that they do not meet the definition of an optional transportation benefit. Based on these determinations, federal Medicaid payments would no longer be available for administrative activities performed by school employees or contractors, or anyone under the control of a public or private educational institution, or for transportation from home to school and back for school-aged children. The proposed rule will be published in the Federal Register on Sept. 7, 2007. View the proposed rule.
