Contracts between school districts, health departments not affected under state’s managed care

By Shannon Stiglitz, Director, KSBA Governmental Relations Service

The relationship between school districts and local health departments will not change if the state switches to a managed-care system to administer Medicaid services, based on terms outlined in a request for proposals for managed-care organizations.

To provide school-based health services, many school districts contract with local health departments to provide Individual Education Plan-related and non-IEP related services. These services are critical to ensure a quality education for Kentucky’s students. Gov. Steve Beshear has recommended the state move to a managed-care model for administering Medicaid services. He said this would save $168 million, the projected shortfall in the Medicaid budget. Currently, there is only one managed-care contract in Kentucky, operated by Passport Health Plan and serving a 16-county region.

Health departments and school districts were concerned that if the state adopted a managed-care model, health departments would not be eligible for reimbursement for non-IEP services provided to Medicaid-eligible students in the school setting. The concern was prompted by the Passport model, in which a Medicaid client has a single provider – a “medical home” – who directs all care for that person. In the Passport region it is not advantageous for health departments to contract with school districts because they cannot seek reimbursement for non-IEP services under the terms of the Passport arrangement. Most school districts in that region hire nurses on staff to provide these services.

KSBA staff worked closely with the Cabinet for Health and Family Services to make the case that if school districts could not contract with health departments, they may not have providers for school-based health services, especially in rural communities. KSBA was also concerned that costs to school districts would increase if health departments were not considered providers under any managed-care contracts. Further, the managed-care organizations will set contribution rates, which may not be the same as current reimbursement rates for school-based Medicaid services. The cabinet ultimately agreed that the RFP would require the contracted managed-care organization to reimburse health departments.

It states, “…School-based health services provided by schools are excluded from MCO coverage and are paid by the Department through fee-for-service Medicaid when provided by a Medicaid-enrolled provider. School-based health services provided by public health departments are included in MCO coverage.”

KSBA will continue to monitor the RFP process going forward through selection of the vendors.

As the RFP indicates, school districts need not worry about reimbursements that they are receiving directly from Medicaid for IEP services. These services are paid for with federal funds and will not be affected by any managed-care contracts. School districts are the only service providers allowed to bill Medicaid for IEP services. If you have any questions, please contact Stephanie Aldridge at 1-800-372-2962 or Stephanie.aldridge@ksba.org.
Please click the link below and follow the detailed steps to view the RFP Medicaid.

  •     Click on ‘View Solicitation.’
  •     Click on the ‘CHFS Medicaid Managed Care Organization RFP’ published April 7.
  •     The PDF access is at the top left, and the attachments are included in a tab next to that.
If you have more questions, please feel free to contact Stephanie Aldridge, KSBA School-Based Health Services, at 1-800-372-2962.

← BACK
Print This Article
View text-based website