The U.S. Department of Education is withdrawing a proposal that sought to streamline how schools bill Medicaid for the mental health and medical services they provide to students, partially with the goal of giving schools new resources to tackle students’ worsening mental health.
The department withdrew the proposed regulation late last month, along with two others that were intended to expand protections for transgender student-athletes and cancel student loans for more than 38 million Americans. Scrapping unfinished proposals prevents President-elect Donald Trump from being able to rewrite them to better support his priorities and finalize his version more quickly. Now, if Trump wants to pursue policies on the same issues, he will have to start from scratch in the regulatory process, which can take months or years to complete.
The department’s withdrawal of the Medicaid proposal is a blow to school administrators, who have long criticized the lengthy bureaucratic process that makes it more difficult for schools to use available funds to help students with mental health and medical needs and receive services to address them at school.
“This is an extremely disappointing development,” said Sasha Pudelski, advocacy director for AASA, The School Superintendents Association. “It’s unfortunate. It’s going to continue to have negative financial and administrative impacts for school districts across the country.”
But parents’ rights groups and disability rights organizations were concerned about the implications of such a change to the billing process. The proposed change, which was first announced May 18, 2023, ran into a large amount of opposition during the public comment period, according to the department’s withdrawal notice.
The proposal would have changed a requirement under the Individuals with Disabilities Education Act that schools must get written parental consent before billing Medicaid or the Children’s Health Insurance Program, another source of publicly funded health coverage for children from families whose income is too high to qualify for Medicaid, for the cost of mental health and medical services students receive at school. Billing the programs doesn’t involve any cost to parents, but schools are still required to receive their consent.
School officials have said that requesting that consent is burdensome on staff and is confusing for parents, who have already consented to schools serving their children through the Family Educational Rights and Privacy Act and other provisions in IDEA.
Though school officials said that the Biden administration’s proposal would clear hurdles and streamline the process, it was the subject of two sizable write-in campaigns in opposition to the changes, including from a national parents’ rights organization, the department wrote in its withdrawal notice.
The department said it received more than 9,700 comments, including more than 8,000 from the write-in campaigns opposing the change. In the roughly 1,700 remaining comments, about half were supportive and included backing from entities like national membership groups that represent educators and service providers. The other half, which included disability rights organizations and parent organizations, opposed it, the department said.
In its withdrawal notice, the department said some opponents were concerned that students with disabilities could be denied reimbursement for and access to Medicaid services outside of school after their public benefits were billed for in-school services. Opponents also argued that decisions should lie with families, rather than school administrators.
“Health care decisions, whether in the doctor’s office or the billing department, are best left to the student, their parent(s), and their clinician,” wrote Robert M. Augustine, the 2023 president of the American Speech-Language-Hearing Association, which represents speech-language pathologists and others in the field, in a public comment.
Bill Knudsen, the director of education policy at ASHA, said the Biden administration withdrawing the proposal prevented possible “unintended consequences.”
“With our partners on these issues, we look forward to continuing to work with the new Administration to ensure all children have access to the audiology and speech-language pathology services they need—both in clinical and educational settings,” he said in a statement.
Advocates say they will try again with the Trump administration
The department changed its focus to providing technical assistance and working with other agencies to “improve implementation of school-based Medicaid rather than engage in further rulemaking,” Secretary of Education Miguel Cardona wrote in the notice.
But advocates of the proposal said the change would not have had such negative effects on families.
“This decision signals a continued lack of understanding about Medicaid and the ability of local school districts to seek reimbursement for services that are provided to students with disabilities in our public schools,” read a statement from the Council of Administrators of Special Education. “It is clear that local districts’ access to reimbursement for services would never result in additional costs to the parent or reduced benefits to the child.”
Pudelski said AASA would continue to support such a change, and push for it with the incoming Trump administration.
“I think if you care about special education services in schools, and you want to make sure districts have the resources to deliver them appropriately, you should have been in favor of this regulation, because it would have delivered more dollars to your special education program,” Pudelski said.
The department wrote that it instead worked with the Centers for Medicare and Medicaid Services within the U.S. Department of Health and Human Services to address the barriers related to accessing Medicaid for services outside of school.
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