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AFT-Maryland and the Moore Administration Work Together to Increase Medicaid Funding for Schools


Maryland can now bring in federal dollars to cover the cost of health services that are already being provided in schools. This will allow the hiring of additional staff and expand services to provide care to more children and improve healthcare access for low-income children.

In 2014, the Centers for Medicare and Medicaid Services (CMS) reversed the 1997 Medicaid policy known as the “Free Care Rule” that limited the ability of schools to bill Medicaid for student healthcare services. This reversal provides reimbursement for in-school services for children with special health care needs (CYSHCN). To implement this reversal, many states needed to pass legislation to conform with the federal policy, including Maryland. 

AFT-MD brought this issue to the Moore Administration to see if they were willing, by executive order or by asking the federal government to override state law, to accept the money from CMS. The Moore Administration agreed to ask CMS to override the state and provide the funds to the schools. The state will begin to accept these funds in January 2024.

The removal of the free care rule is a game-changer, enabling children already enrolled in Medicaid to receive the lion’s share of their health services at school, where they spend most of their time. These services include health screenings, immunizations, chronic disease management, and therapies.

It also allows schools to take full advantage of opportunities to expand their Medicaid programs and increase the types of healthcare and school-based health that they can provide. These services are essential to the Community School model that seeks to attend to the whole student beyond their needs in the classroom.  


In 1997, CMS established the Medicaid “Free Care Rule,” which prohibited schools from billing Medicaid for health care services unless certain conditions were met: 
1) The student is enrolled in Medicaid 
2) The student has an Individualized Education Plan (IEP) 
3) The healthcare services provided are related specifically to the IEP 

This policy limited schools’ ability to seek reimbursement for services provided to students enrolled in Medicaid. 

In 2014, the Obama Administration required CMS to reverse the “Free Care Rule” and allow schools to be reimbursed for services provided to students enrolled in Medicaid, whether or not they meet the IEP criteria. 


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