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.

UPDATE: CMS approves California SPA 15-021

In April 2020, the Centers for Medicare and Medicaid Services (CMS) approved California’s State Plan Amendment (SPA) 15-021. This brings to a close the state’s five-year process to expand coverage of health services to all Medicaid enrolled students, per the change to the “free care rule.” SPA 15-021 expands access to Federal Medicaid funds for LEAs, through the following three primary changes: (1) incorporating Random Moment Time Survey (RMTS) into the cost settlement process, (2) adding new service practitioners and new services covered under the LEA BOP, and (3) expanding the population covered under the LEA BOP to include Medicaid beneficiaries outside of special education to those covered by an Individualized Health and Support Plan (IHSP) also known as a “Care Plan”. 

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