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Michael Petruzzelli

, National Council for Behavioral Health

CMS Clarifies Reimbursement Policy on “Free Care” in Schools

January 8, 2015 | Children and Youth | Medicaid | Comments
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The Centers for Medicare and Medicaid Services (CMS) recently sent a letter to State Medicaid Directors withdrawing its prior guidance on the “free care” policy as expressed in the School-Based Administrative Claiming Guide and other guidances. This withdrawal will benefit children and children’s providers by clarifying complex Medicaid reimbursement policy related to “free care” provided at schools.

Traditionally, providers have been restricted from billing Medicaid for services that they would provide for free to non-Medicaid beneficiaries. Additionally, prior CMS regulations instructed providers to collect payment from other payers before billing Medicaid. However, confusion among states and providers has arisen because providers are unsure of whom to bill when providing care to uninsured patients. For patients who are covered by Medicaid, many providers have expressed confusion as to whether they should bill a school or child welfare agency before billing Medicaid.

The new guidance primarily clarifies two things for State Medicaid Directors:

  1. CMS does not generally consider public agencies and programs as legally liable third parties for purposes of Medicaid reimbursement, with some exceptions.
  2. Whether in schools or in other community settings, Medicaid reimbursement is available when provided to Medicaid beneficiaries for services covered under the state’s Medicaid plan, regardless of whether there is normally any charge for the service to the beneficiary or the community at large.

Providers still have to pursue legally liable third party payers, such as Medicare and private insurance. However, they do not have to institute a sliding fee scale for all non-Medicaid beneficiaries. Read the full letter here.