Free Care Rule

Federal policy change provides new opportunities for school health services

In 2014, the federal government reversed a long standing policy that impeded the ability of school districts to get reimbursed for the school health services they provide to students (called the “Free Care Rule”). This reversal removes a major barrier for schools to obtain federal Medicaid funding for student health services and creates an opportunity for schools to expand the role they play in improving the health of low-income students. The change in federal policy could open the door for schools to reimagine their role in the health care delivery system and augment their efforts on behalf of children.

Resources for Schools

  • REPORT: Policy Considerations for California Following the 2014 Reversal of the Medicaid “Free Care Rule”
    With our partners, The California Endowment and Harbage Consulting, we are excited to release a report that offers insight into California’s implementation of this change and highlights new possibilities to expand the role of schools in contributing to broad health system transformation. Schools have regular access to children, provide education and preventive, ongoing, and follow-up services, and are trusted by children and parents.

UPDATE: California to make changes to school Medi-Cal billing program

The Department of Health Care Services (DHCS) announced in September 2016 that changes to the provider manual for the LEA Billing Option Program will reflect the most recent policy direction from the Centers for Medicare & Medicaid Services (CMS) regarding “free care.” The updated manual is posted on the LEA Medi-Cal website. The specific updated section is “LEA: Billing and Reimbursement Overview.”

This is an exciting change to the LEA Billing Option program and ensures that Medi-Cal may reimburse LEA providers for services provided to all Medi-Cal eligible students regardless of whether those services are available to the school community free of charge. To learn more about the “free care” policy, the LEA Billing Option program, and CMS’s policy change, check out our resources above. Since CMS’s policy change, we’ve been working closely with DHCS, LEAs, the California School Nurses Organization, and other advocates to make sure that our state makes changes to the LEA program to strengthen school-based health services for children.