By ANDY ZIEMINSKI, Capital News Service
ANNAPOLIS - Maryland officials said a recent decision by federal Medicaid administrators to stop reimbursing states for the cost of transporting disabled students to and from school is part of a "mean-spirited," months-long trend to "dump additional costs onto the states."
The change would hit Baltimore City and Prince George's County the hardest: Baltimore billed Medicaid for $593,503 in fiscal 2007 for special-needs transportation and Prince George's County billed for $106,560, said Bill Reinhard, a state Department of Education spokesman.
While many schools in the state decline to seek Medicaid assistance because of the paperwork involved, the statewide total reimbursement for student transport in fiscal 2007 was about $1 million, officials said.
Now, the state and the jurisdictions that do bill Medicaid are "going to have to pick up the tab for it," said Maryland Disabilities Department Secretary Catherine A. Raggio.
She added, "I don't think children will be without transportation."
Raggio said notification of the change was "mean-spirited," because it was e-mailed to state officials late on the Friday before the Labor Day holiday. That followed another cut in Medicaid assistance that was announced late on a Friday two weeks earlier.
"It's sort of this series of new rules coming out in the last five or six months that together are really hitting the states hard," said John Folkemer, the state's Medicaid director.
The student transport announcement declared that getting disabled children to school would be re-classified as an administrative cost, not a covered medical expense, and therefore could not be billed to Medicaid.
Federal officials said the change is an effort to cut back on waste and fraud, claiming it would save taxpayers $3.6 billion over the next five years.
Billing Medicaid for general transportation costs—rather than strictly for medical services—is a "pervasive problem" among school jurisdictions nationwide, said Mary Kahn, a spokeswoman with the Centers for Medicaid and Medicare Services, which announced both cuts.
For example, federal health inspectors found that $96 million given to New York City's Education Department in Medicaid claims should not have been allowed because the claims did not meet all state and federal requirements.
Kahn said Medicaid will continue to pay for specific services required during a student's journey to and from school, such as an oxygen tank or a special seat.
The student transport cuts came two weeks after the government announced another plan that would effectively block children from qualifying for the State Children's Health Insurance Program (SCHIP) if their families earned 250 percent or more of the poverty limit—$51,625 for a family of four.
The Bush administration has said the SCHIP change is intended to force states to focus more on insuring children from poorer families.
The move will cause 3,700 Maryland children to lose insurance, Raggio said.
"All of these changes compounded make it difficult for states to meet the needs of their students," she said.
Officials could not say how many Maryland children would be affected by the bus cuts. Those cuts will have a relatively small financial effect on Maryland, but Folkemer pointed to other examples of Medicaid tightening its reimbursement rules for state programs.
A May proposal that is still pending would prohibit hospitals from billing Medicaid for expenses associated with training graduate students, which it has been doing since the 1960s, he said.
A rule from August reduces billable rehabilitation services, particularly for foster care and mental rehabilitation, Folkemer said.
Neither rule was announced on a Friday, he said, but that does not make them any less painful to the state.
"It's really cutting way back on services the state had been providing through Medicaid," Folkemer said.