DEPARTMENT OF HEALTH  & HUMAN SERVICES  
Centers for Medicare & Medicaid Services  
7500 Security Boulevard, Mail Stop S2-26-12  
Baltimore, Maryland   21244-1850   CENTERS FOR MEDICARE & MEDICAID SERVICES 
CENTER FOR MEDICAID & CHIP SERVICES 
 
       
CMCS Informational Bulletin  
 
Date:  May 18, 2023  
 
From:  Daniel Tsai, Deputy  Administrator  and Director  
 
Subject:  Information on School-Based Services  in Medicaid:  Policy  Flexibilities and  Guide on 
Coverage, Billing, Reimbursement, Documentation and School-Based Administrative Claiming                            
 
Background:   
 
The  purpose of  this  informational bulletin  is to introduce  the  comprehensive guide  Delivering 
Service in School-Based Settings: A Comprehensive Guide to  Medicaid Services and 
Administrative Claiming  that the  Centers for Medicare & Medicaid Services (CMS), in  
consultation with the  U. S. Department  of Education (ED),  is  issuing  to improve the delivery of  
covered Medicaid and Childrens Health Insurance Program (CHIP) services to enrolled  students  
in school-based settings  and  to  meet the requirements  of Section 11003 of the Bipartisan Safer  
Communities Act  (BSCA)  (P.L. 117-159).    
 
Medicaid and CHIP are joint State-federal programs that  offer health coverage to  tens of  millions  
of Americans,  including  more than  half of all children across the country.  With this new  
comprehensive guide,  CMS and ED  strongly encourage States and schools to expand their  
offering of school-based services  (SBS)  as a way to  increase crucial  health care access to  
children enrolled  in Medicaid and CHIP  and meet  Early and Periodic Screening, Diagnostic and  
Treatment (EPSDT)  requirements. Preliminary CMS data indicates that  the volume and rate of  
primary, preventive, and  mental health service use declined  during the  pandemic  and have not  
yet rebounded to pre-pandemic levels.1  Additionally, the Centers for Disease Control and  
Prevention reports  that from 2011 to 2021, poor mental  health and suicidal thoughts and  
behaviors increased  for nearly all youth  groups.2   
 
SBS play an important  role  in the  health of students.  Health care services delivered  in  schools are  
an opportunity to meet children where they are and deliver services to children  in  a setting where 
they spend a  majority of their time   in school. SBS can include all  services covered under  
EPSDT,  which  provides  a comprehensive  array of  preventive, diagnostic, and treatment services  
for eligible  individuals under 21  enrolled  in Medicaid.  These services  include, but are not limited  
to,  preventive care, mental health and substance use disorder (SUD) services, physical and 
occupational therapy, and disease management.  
                                                
1  https://www.medicaid.gov/state-resource-center/downloads/covid-19-medicaid-data-snapshot-07312022.pdf  
2  https://www.cdc.gov/healthyyouth/data/yrbs/yrbs_data_summary_and_trends.htm   Page  2  CMCS Informational Bulletin  
 
 
Schools  can also help  enhance early  identification  of health  needs and connect students  to a 
broad range of health care services,  including  mental  health and SUD services,  and  other  
community-based  services. Specifically, SBS providers  can help promote  health and educational  
equity and  increase school attendance by:3,4  
 
1.   Helping eligible students enroll  in  the  Medicaid  program.   
2.   Connecting students  Medicaid-eligible  family  members with  Medicaid  health  coverage.  
3.   Providing Medicaid-covered  health  services  in  schools  and  seeking  payment  for  services  
furnished.  Health  services  can  include  any  covered  service,  including  EPSDT  services,  at  
the  State  Medicaid  agencys  discretion.  
4.   Offering  Medicaid-covered  services that  support  at-risk  Medicaid  eligible  students.  
5.   Providing Medicaid-covered services and performing  Medicaid  administrative activities  
to improving student wellness.5  
6.   Providing Medicaid-covered services that  reduce emergency room  visits.  
7.   Providing Medicaid-covered services  and performing  Medicaid  administrative activities  
that promotes a healthy  environment and promotes learning.  
 
Where possible,  we encourage States  to ease administrative burden placed on school-based  
health providers to promote  their participation  in  Medicaid and CHIP,  and thereby increase  
access to covered services, while also  maintaining fiscal and programmatic integrity of Medicaid  
and CHIP. Billing arrangements for SBS vary by State and locality, and operate within  
parameters set by the State Medicaid agency.  This comprehensive guide includes a series of  new  
flexibilities on billing, documentation, and time studies (e.g., worker logs, random  moment time  
studies (RMTS))  to help ease the administration of SBS for  local education agencies (LEAs).  
These flexibilities are all options for  States  to adopt in their  State Medicaid plan.  CMS  urges  
States  to adopt  these flexibilities to make it easier for LEAs to bill  and is  available for  technical  
assistance to help  State  Medicaid agencies  submit  a new State Plan Amendment (SPA)  to  
implement  the new  flexibilities outlined  in the comprehensive guide.     
 
Schools are important providers of  Medicaid  direct medical  services  for children,  as well as 
participants  in Medicaid administrative activities  for which  federal  matching  funds are available  
(e.g.,  Medicaid outreach, enrollment,  and  referrals  and care  coordination  performed as an  
administrative activity and  not a direct medical service). This  guide, following  all relevant  
regulations and  laws,  provides comprehensive details regarding  both  SBS direct medical services  
                                                
3  This document contains  links to  non-United States Government websites. We are providing  these links because  
they contain additional information relevant  to the topic(s) discussed in  this document or that otherwise may be  
useful to the reader. We cannot  attest to the accuracy  of information provided on  the cited third-party websites or  
any other  linked third-party site. We are providing these links for  reference only; linking to a  non-United States  
Government website does not constitute an endorsement by CMS, HHS, or any of their employees of the sponsors  
or the information  and/or any products presented on the website. Also, please be aware that the privacy protections  
generally provided by  United States Government websites do not apply to third-party sites.  
4  California School Based Health Alliance. Top  Ten Benefits  of School-Based Health Centers, available at URL: 
https://www.schoolhealthcenters.org/school-based-health/awareness-month/why-sbhcs/#:~:text=School-
based%20health%20centers%20%28SBHCs%29%20promote%20health%20and%20educational,Improve%20welln 
ess%20policies%20and%20health%20programs.%20More%20items    
5  See:  https://www.thecommunityguide.org/media/pdf/SDOH-School-Based-Health-Centers-508.pdf  
 
  Page  3  CMCS Informational Bulletin  
 
and  SBS administrative claiming.  It also  details  policies and  new  flexibilities  intended to ease the  
administrative burden associated with billing and  payment  for Medicaid and CHIP services,  
including  associated Medicaid administrative activities.   
   
Specifically, this  comprehensive  guide:  
 
   Clarifies  how payments can be made to school-based  providers  under Medicaid and  
CHIP;  
   Discusses strategies and tools to  reduce administrative burden and simplify  billing for  
LEAs,  including rural and small  LEAs;   
   Provides best practices and examples of approved methods that State Medicaid  agencies  
and LEAs  have used to pay  for Medicaid covered services;   
   Gives  examples of the types of providers that can participate in Medicaid  and furnish  
covered services  within school settings, and;    
   Provides  best practices to enroll qualified providers.  
 
This comprehensive guide updates and supersedes previous guidance  issued by CMS on school-
based services,  including the 1997 School-Based Services Technical Review Guide and the 2003 
School-Based Administrative Claiming Guide, and explains other policies and practices that  
States  may employ in implementing  SBS.   
 
New Flexibilities  Included in the Guide  
States are  able to  immediately  take advantage of the following  new  flexibilities  regarding  school-
based Medicaid billing, documentation, and claiming:   
 
Billing  for States  and LEAs that utilize cost-based  reimbursement  
 
Roster Billing Methodology:  This optional  methodology allows  States  to compute a rate  that is  
representative of services delivered, and the LEAs  would  multiply that rate,  on a quarterly or  
monthly  basis, by the number of Medicaid-enrolled students  that receive a covered service within  
the service period. The roster billing approach presents a streamlined process compared to billing  
for  individual claims through  the Medicaid Management  Information System.  These 
quarterly/monthly payments would then  be reconciled to actual costs at  the end of each cost  
reporting year.    
 
Per Child, Per Month (PCPM)  Interim Rate:  This optional  methodology allows  States to  create 
an  interim rate that can be  based on  the providers previous  years actual cost. These payments  
could  be paid out each month on a PCPM-basis  or on an average cost per  service basis. These 
monthly payments would then be reconciled to actual costs at  the end of each  cost reporting  year.  
 
Option to Not Submit Bills  for Each Service:  If a  State chooses a roster billing or  PCPM  
methodology, schools  in the  State would not be required to submit a bill  for each service to  
Medicaid, as  long as  the  interim rates and payments are reconciled to actual costs at  the end of  
each year.  
 
 
  Page  4  CMCS Informational Bulletin  
 
As LEAs, State  Medicaid  agencies, CMS,  and ED  begin to implement  the billing  flexibilities  for  
Medicaid-covered services provided  in  schools, we are cognizant  of the potential  for data loss  
that may  be associated with the flexibilities. Collection of basic data metrics (e.g.,  the number of  
children receiving SBS)  is crucial  for the Medicaid program  in order  to monitor  trends  in care 
and support performance improvement across physical and  mental  health services. Regardless of  
the delivery setting,  it is  important  that CMS,  States, and stakeholders  have visibility into  
essential  services, including  EPSDT services,  being provided to children and the quality of those  
services.       
 
To ensure that  States and CMS have information available to understand that quality care is  
delivered  in schools to Medicaid eligible children, we  intend to explore  over  the next year,  in 
partnership with  States and LEAs, additional  methods  to collect school-based data for a set  of  
essential physical and  mental  health services, and particularly reporting of core data metrics. The 
goal  is  for CMS  to issue national guidance to capture a consistent, simplified set  of  metrics while  
avoiding placing additional administrative  burden on schools. Through collaboration in the SBS  
Technical  Assistance Center, we will  further define these reporting parameters and options  for  
LEAs to implement billing flexibilities, while  maintaining the necessary supporting 
documentation  for States and Federal  entities to assess access, quality of care, and health equity.  
Further guidance on this  issue will  be developed by  CMS as part  of our  ongoing technical  
assistance.  
 
Billing for State  and LEAs that utilize  rate-based  payments  
 
Fee Schedule Rates that Exceed the Community Rate:  This  flexibility allows  States to pay  higher  
fee schedule rates for services offered  in schools as  long as the State demonstrates that  the rate is  
economic and efficient, as required by section 1902(a)(30)(A) of the Social Security  Act (the 
Act).  
 
Clarification of  Restrictions on Bundled Payment  Rates:  CMS previously  issued a  1999 State  
Medicaid Directors Letter (SMDL)  that  prohibited the use of bundled rates  in school-based  
settings based on concerns over service documentation and  financial oversight. The SMDL was  
issued prior  to  States implementing reconciled cost methodologies as the predominant method to  
pay for  SBS. The  comprehensive  guide clarifies  that bundled  rates  are permissible as  interim 
payments when the bundled  rates  are reconciled to  the  actual cost  of providing Medicaid 
services.  
 
Documentation  
 
Due the Family Educational Rights and Privacy Act  (FERPA),  States and LEAs have been 
unable to provide the necessary documentation to support  the billing of Medicaid services and 
claiming of  Federal financial  participation (FFP). To offer  States  and LEAs  flexibility  for  
supporting claims of FFP, CMS  and ED are  offering States and LEAs the following options:  
 
De-identified Data:  This  flexibility allows LEAs and school-based providers to furnish some de-
identified or masked data to support Medicaid Enrollment Ratios (MERs)  or  other allocation  
statistics.   Permitting this type of de-identified data can help support schools  in responding to 
 
  Page  5  CMCS Informational Bulletin  
 
audits,  however, this  does  not supersede  the requirement to provide the  minimum documentation  
required  for payment  for Medicaid services.  
Utilization of a  General Allocation Ratio:  Historically,  most school-based providers that were 
reimbursed actual costs utilized an  Individualized  Educational Program  (IEP)-based  ratio to  
allocate costs  to Medicaid at  the local LEA  level:  Number  of Medicaid enrolled students with 
an IEP receiving medical services  divided by number  of students with an IEP receiving  
medical services. This guide  discusses the use of  a more general ratio:  Number  of Medicaid  
enrolled students  divided by  total  number  of students in the LEA.   This eliminates the  
burden of producing documentation related to non-Medicaid enrolled students with an IEP.  
Utilization of  Time Study Moments as a  One-step Allocation Methodology:  Instead of a two-
step process  to allocate costs  to Medicaid using a time study and then a MER,  the  comprehensive 
guide  discusses the option  for  States  to construct  time study activity codes to capture time  study 
moments that are both medical  in  nature and  specifically applicable to  Medicaid activities  and  
services. These time study results can then  be used  to allocate cost.   
Provider Qualifications  
 
This  flexibility  allows  States  to establish provider qualifications  for school-based providers that  
differ  from the qualifications of  non-school-based  providers of the same Medicaid services, as  
long as  States provider qualifications are not unique to Medicaid-covered services.  Prior CMS  
guidance made it  difficult for  States to rely on ED  provider qualifications or  to establish different  
provider qualifications  for school-based and non-school-based providers of the same Medicaid  
services.   
 
Third Party Liability  
 
This  flexibility  eases  administrative burden at schools  by allowing States to  suspend  or terminate 
efforts  to seek reimbursement from a liable third party  if they determine that  the recovery would  
not be cost-effective pursuant  to 42 C.F.R. 433.139(f),  including for  Individuals with  
Disabilities Education  Act  (IDEA)  or 504-plan services.   
 
Time Studies   
 
Time  Study Error  Rate:  This  flexibility allows States to increase the error rate  in time study  
implementation plans  from +/- two  percent to  +/- five  percent.  This change  will allow  States to  
conduct unified time studies  with far fewer moments, which also eases administrative burden.  
Time Study  Notification and Response Period:  This  flexibility allows  States  to submit time study  
implementation plans that include up to a  two-day notification window and up to a  two-day 
response period for queried moments  in their time studies  for school-based providers,  instead of  
a zero-day notification window and  two-day response window.  
 
 
 
  Page  6    CMCS Informational Bulletin  
 
Implementation of the SBS Flexibilities  
 
CMS and ED  recognize the high administrative burden  for schools seeking payment for  
Medicaid and CHIP services. CMS and ED are supportive of school-based health programs and,  
where possible, encourage State  Medicaid agencies  to ease administrative burdens placed on  
school-based health providers to promote  their participation  in Medicaid and CHIP and thereby  
increase access to covered services. State  Medicaid agencies  should adopt policies discussed 
within  the comprehensive  guide  in a  manner that  maintains the  fiscal and programmatic integrity  
of the Medicaid and CHIP programs.   
 
States seeking to  take immediate  action  related  to  any of the  flexibilities  offered  in the  
comprehensive guide,  should  submit any applicable SPAs,  administrative  claiming  plan 
amendments, or  amendments to  time study  implementation plans  as soon as possible.  We  
encourage States  to review the timing requirements  in 42 C.F.R.  430.20 to ensure amendments  
are effective when  needed. For example, a State would need to submit a SPA to CMS by  
September 30, 2023, in order for it to be effective as of July 1, 2023 (and must comply with  
existing public notice requirements and tribal consultation, as applicable).  
 
CMS acknowledges that  States  may choose  to direct some,  but not always  all,  of the  federal  
share of SBS  expenditures  to school-based providers. However, CMS strongly encourages  States  
to direct  all of  the federal share for any SBS  to school-based providers.  This is essential for  
schools to sustain and expand SBS, especially  for schools with  fewer resources.   
 
SBS Comprehensive  Guide Compliance  
 
In the  comprehensive  guide, we  discuss new policies,  provide policy clarifications,  and reiterate 
existing  federal requirements  regarding the recognition of cost,  the notification and response 
windows  for  time studies, and the standard  for  documenting  services rendered, among other  
matters.  If States are not already  adhering to  applicable federal  standards and requirements  as 
discussed in this guide, CMS expects that  States submit SPAs,  administrative  claiming  plan  
amendments, and/or amendments to  time study  implementation plans  to comply  as soon as  
possible, but no later  than the start  of the first quarter at least  three  years  after  the  publication  
date of the guide. If States  need  assistance to submit SPAs, administrative  claiming  plan  
amendments,  and/or  amendments to  time study  implementation plans  to comply with the 
comprehensive guide,  or  to  take advantage of new  policy  flexibilities,  CMS encourages  States  
and school-based providers to use the SBS  Technical  Assistance Center  to aid with their  
compliance efforts.  
 
Technical Assistance Center  
 
The BSCA also requires  the Department  of Health and Human Services,  in collaboration with 
ED,  to establish a technical assistance center  to: (1)  support State  Medicaid agencies,  LEAs,  and  
school-based entities seeking to expand their capacity  for providing Medicaid SBS, (2) reduce  
administrative burden,  (3)  support such entities  in  obtaining payment  for providing Medicaid 
SBS,  (4) ensure ongoing coordination and collaboration between ED and  the Department of  
Health and Human Services regarding Medicaid SBS, and (5)  provide guidance with regard to  
 
  Page  7  CMCS Informational Bulletin  
 
utilization of various  funding sources.  CMS intends to establish the  SBS  Technical  Assistance  
Center consistent with statutory requirements and encourages stakeholders to use the Technical  
Assistance Center  to assist in  implementing the  flexibilities and requirements  discussed  in this  
SBS guide. CMS intends to share more information regarding the Technical  Assistance Center  
soon.    
 
As stakeholders review the comprehensive guide, there may  be content areas  they  believe CMS  
should expand upon or further explore via the Technical  Assistance Center. A request for  
proposal  for a Technical  Assistance Center contractor  was released on April 20, 2023.   
 
States should  contact  CMS  to discuss the  above  SBS flexibilities  before  submission of any SPAs,  
administrative  claiming  plan amendments, and/or  amendments to  time study  implementation  
plans, CMS  is available to provide technical assistance to  States  and stakeholders  to best  
implement, enhance, and expand  their  SBS programs.  Questions regarding  implementation of  
these options,  compliance efforts,  or thoughts  about content areas CMS should  further explore  
should  be directed to  CMS at: SchoolBasedServices@cms.hhs.gov.