Districts are scrambling to figure out how to pay the bill because federal law requires schools to provide special services for disabled students. "If the money stops, districts are going to have to find the money somewhere else in their budgets," said Suzi Rader, director of district and financial services for the California School Boards Association.
Public comments on the rule change, published Sept. 7 in the Federal Register, are due by Nov. 7. The cuts will take effect by the 2008-09 school year unless the administration changes its mind -- which is unlikely based on the administration's record.Sacramento City Unified School District and other school districts rely on the Medicaid insurance program for the poor, known as Medi-Cal in California, to pay a portion of the costs of transporting children with disabilities. The district transports 1,100 special-needs children each day -- including some who use wheelchairs -- and is still calculating the potential costs.
"This (regulation) is not limited to just the physically disabled, it also includes physical and speech therapy and other services," said Terry Brown, the district's transportation chief. Sandra Duval's 11-year-old daughter is bipolar and attends Sacramento's Marian Anderson Therapeutic Center. Her disability requires her to attend school across town from her home. Because she was adopted, Duval's daughter receives adoption assistance from Medi-Cal and transportation from the Sacramento City school district.
The proposed federal regulations, Duval said, are "just another way to push the funding for these children's special needs onto the state and school districts." "Where are they going to take the money from?" Duval asked. "From classroom aides? From instructional materials? Who knows?" Federal officials say they want to stop paying for transportation and other school-based Medicaid activities that are not medical services.
"In a nutshell, the policy is that taking a child to school is essentially an education service since the child goes to school to receive an education -- not a medical service," said Mary Kahn, a spokeswoman for the federal Center for Medicare and Medicaid Services. The rule change would not affect payments for direct medical services provided in schools to children who qualify for special assistance under the Individuals With Disabilities Education Act.
Medicaid officials say the new regulations would reduce administrative fraud and waste and save the federal government $3.6 billion over five years. Jeff Simering, director of Legislative Services for the Council of the Great City Schools, which represents the nation's largest school districts, said the proposal continues a trend that began in the 1990s during the Clinton administration. At that time, Simering said, several school districts were hiring consultants to help them maximize Medicaid reimbursements.
"Some of the profit motives of these consultants went a little beyond what should have been billed," Simering said. He said "those problems were cleaned up," but Medicaid "is still coming up with tortured interpretations of the law and saying it's not necessary to deliver services to low-income schoolchildren." The proposed regulation, Simering said, follows a government guide the Bush administration issued in 2003 that also restricted school-based Medicaid billings.
Elizabeth Graswich, spokeswoman for the Elk Grove Unified School District, said the district was receiving $1 million a year for the 1,100 special-needs children it transports each year and other school-based Medicaid activities. "But we haven't been (reimbursed) since 2005-06," said Graswich, adding the district is still awaiting payment for the claims it has filed since then. Stan Rosenstein, California's director of Medi-Cal, which is jointly funded by the state and the federal government, noted the latest cuts were included in President Bush's budget.
Rosenstein said Gov. Arnold Schwarzenegger sent letters to Washington opposing the reductions and Rosenstein met several times with federal officials, to no avail. "What they say they are doing is that they found a few school districts that abused (Medicaid) claiming," Rosenstein said. "So rather than just fixing these problems, they're eliminating the funding entirely." Rosenstein said the rule change would cost California $103 million annually, including the transportation program and steering poor families to Medi-Cal services.
Linda Chastain, fleet supervisor for students with special needs in the Sacramento City school district, said the transportation the district provides is invaluable. "We take them to community-based instruction, which gets them out into the community because a lot of students are confined to wheelchairs and don't have the ability to get out," Chastain said. "And we take them on field trips that other students are able to get to by walking."
Maria Lopez, a spokeswoman for the Sacramento City school district, said the proposed regulations are incompatible with "an administration that keeps pushing for leaving No Child Left Behind." A hallmark of the Bush presidency, the sweeping federal law is intended to close the achievement gap and improve the academic achievements of poor children. "This not only leaves them behind, but it locks them up," Lopez said. "School districts will do all they can to continue to provide services for (these) children, but this is so devastating."
