Frequently Asked Questions

All inquiries for the TAC and CMS regarding Medicaid School-Based Services and the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming should be directed to the TAC mailbox at SchoolBasedServices@cms.hhs.gov. More information on where to send SPA submission packages, including submission systems, pages, and CMS 179 Forms, can be found on Slide 9 of the following CMS Training Slides: https://www.medicaid.gov/state-resource-center/downloads/spa-and-1915-waiver-processing/training-slides.pdf

No, while an RMTS is typically used to identify and allocate cost, it is not the only option. States also have the flexibility to utilize an alternative methodology for reimbursement and/or allocation, provided there is appropriate documentation for CMS review of the chosen methodology. Regulations on personnel expenses in 45 C.F.R. § 75.430(i) require that charges to federal awards must be based on records that reflect the actual work performed. The records must:

• be supported by a system of internal controls that provides reasonable assurance charges are accurate, allowable, and properly allocated,
• reflect the total activity for which the employee is compensated,
• encompass both federally assisted and all other activities for which the employee is compensated, and
• support the distribution of the employee's salary or wages among specific activities or cost objectives.

First, the activities must be allowable as State program administrative activities. Secondly, the State and/or claiming unit must implement a methodology to properly identify and allocate Medicaid’s portion of cost associated with the allowable State program administrative activity. Finally, the identification and allocation of this cost must be documented in the State’s Public Assistance Cost Allocation Plan (PACAP). According to 45 C.F.R. § 95.517, State Medicaid agencies (SMAs) that intend to claim for allowable administrative activities must have an approved PACAP. As the PACAP is primarily used by the Federal cognizant agency to allocate cost incurred by one direct federal awardee, yet funded by another federal awardee, there may be instances where costs applicable to allowable State program activities are incurred and funded by the SMA. In this instance, the State may identify and allocate the cost via a Medicaid Administrative Claiming (MAC) Plan and include a reference to the identification and allocation of the cost via the MAC Plan in its PACAP.

CMS encourages SMAs to reimburse school districts their allowable costs of conducting Medicaid and CHIP administrative activities. School districts should work with SMAs to develop a plan to document their costs so that the SMA can distribute Medicaid and CHIP FFP to school districts in proportion to each district’s relative expenditures for Medicaid and CHIP administrative activities.

Generally, the TAC goals are to:

• Support SMAs, SEAs, LEAs, and school-based entities seeking to expand their capacity for providing Medicaid SBS.
• Help states reduce administrative burden and simplify billing for, LEAs, in particular small and rural LEAs, and support compliance with Federal requirements regarding billing, payment, and recordkeeping, including by aligning direct service billing and school-based administrative claiming payment systems.
• Support state entities in obtaining reimbursement for providing and expanding Medicaid SBS, including a comprehensive list of best practices and examples of approved methods that SMAs and LEAs have used to pay for, and increase the availability of, assistance under Medicaid, including expanding State programs to include all Medicaid-enrolled students, providing EPSDT services in schools, utilizing telehealth, coordinating with community-based mental health and substance use disorder treatment providers and organizations, coordinating with managed care entities, and supporting the provision of culturally competent and trauma-informed care in school settings
• Ensure ongoing coordination and collaboration between states, ED, and CMS regarding Medicaid SBS.
• Provide guidance with regard to utilization of various funding sources.

Please email the TAC at SchoolBasedServices@cms.hhs.gov for any questions about Medicaid SBS or technical assistance.

Yes, States are expected to apply the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming guidance to all MAC programs for all entities. Both previous guidance documents issued by CMS, including the 1997 School-based Services Technical Review Guide and the 2003 School-based Administrative Claiming Guide, are superseded by the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming.

As stated on page 44 of the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming, if public charter schools are funded predominantly by State and local funds, including local tax revenue or appropriations, similar to other governmental entities, they may be eligible to provide the non-federal share of Medicaid or CHIP expenditures through CPEs.

However, other school entities that are not units of State or local government, including private schools, would not be considered governmental entities under 42 CF.R. § 433.51(b) and § 457.220. Direct payments to private or non-governmental educational institutions for Medicaid and CHIP SBS are available but are typically funded by State appropriations to the Medicaid/CHIP agency. Private and other non-governmental school entities may not participate directly in a CPE. However, an LEA that is a unit of government can contract with providers to provide eligible Medicaid/CHIP services to children in private entities, and CPE the contracted costs, as long as the arrangement adheres to the requirements discussed on page 43 in the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming.

In addition to a cost methodology, LEAs that are units of government may also transfer the non-federal share funds via intergovernmental transfers (IGTs) to the SMA for services provided in private schools as long as the provider receives and retains the entire Medicaid payment described in the Medicaid State plan.

CMS’ longstanding standard policy has been to recommend a 15 percent oversampling for RMTS to ensure a valid response rate of at least 85 percent or include all nonresponses as non-Medicaid and unallowable.

In general, all completed responses should be used in an RMTS. However, CMS allows for the use of an alternate methodology in cases where the TSIP specifies an oversample to ensure an adequate number of valid responses for the treatment of time study nonresponses are achieved. The alternate methodology CMS historically has approved uses an 85 percent valid response rate. CMS recommends an oversample of 15 percent to ensure an adequate number of valid responses are received and to meet the required precision level. Per page 113 of the 2023 Comprehensive Guide to Medicaid Services and Administrative Claiming, an oversample may be used only to compensate, not substitute, for the potential number of nonresponses.

If the valid response rate is above 85 percent, nonresponses may be discarded and not included in the time study results. However, if the valid response rate is below 85 percent, regardless of the 15 percent oversample, CMS has required all non-responses to be included and coded as non-Medicaid.

CMS’s general standard regarding time study notification and response time is up to two-day upfront notification and up to a two-day response period. CMS is also willing to work with States that are not immediately able to meet these standards to work out a plan to eventually get to no more than a two-day upfront notification and a two-day response period. If a State believes that up to two days prior notice and two days response is not achievable, the State can propose an alternative to CMS and provide its rationale. CMS will consider additional time for prior notification and/or response time upon request from a State in such circumstances.