DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
Center for Medicaid and State Operations 
 
                    SMDL #02-018 
 
                November 21, 2002 
 
Dear State Medicaid Director: 
 
This letter addresses the Federal matching rate available for administrative activities performed 
by Skilled Professional Medical Personnel (SPMP) in the school setting.  As described below, 
the purpose of this letter is to inform you that effective January 1, 2003, the enhanced Federal 
matching rate of 75 percent will no longer be available for the activities performed by SPMP 
school staff. 
 
Section 1903(a) of the Social Security Act (the Act) provides for variable Federal matching rates 
to states for administrative functions under Medicaid.  The majority of activities that are 
necessary for the proper and efficient operation of a state Medicaid plan are financed at the 
Federal financial participation (FFP) rate of 50 percent.  However, the costs of certain activities 
may have been claimed at a higher FFP rate; in particular, section 1903 (a)(2) of the Act provides 
for Federal matching at 75 percent for compensation and training of SPMP and their directly 
supporting staff. 
 
Generally, in order for the enhanced matching rate of 75 percent to be available for activities 
performed by SPMPs, the staff performing such functions must have completed a two year 
program leading to an academic degree or certificate in a medically related program and the 
activity itself must require the use of their professional training and expertise. 
 
However, although there are employees in schools who have the qualifications needed to be 
considered an SPMP, CMS has determined that their advanced skills and training are not 
necessary in order to perform the types of administrative activities that take place in school 
settings.  Administrative activities provided in schools may include:  outreach, facilitating 
eligibility determination, program planning and coordination, training, and referral, coordination 
and monitoring of services.  Many school employees conduct such activities, in addition to or 
instead of SPMPs.  Since school employees without the advanced training of an SPMP are able 
to perform such administrative activities, performance of these activities does not require the use 
of an SPMP; nor is not necessary for SPMPs that do perform such activities to utilize their 
professional training and expertise. 
 
Activities that do require individuals with advanced medical skills and training are likely 
provided as part of a medical service, and as such are not reimbursable as administrative costs 
under the Medicaid program.  Federal matching for the costs of the activities provided as medical 
services and performed by such individuals who are qualified Medicaid providers may be   Page 2  State Medicaid Director 
 
 
claimed as medical assistance expenditures under the Medicaid program (as distinguished from 
costs claimed as administration), in accordance with the appropriate requirements associate with 
claiming for medical assistance expenditures. 
 
In summary, effective January 1, 2003, FFP is no longer available at the enhanced rate of 75 
percent for the costs of activities performed by school-based SPMPs.  The Medicaid-related 
administrative activities performed by SPMPs in the school setting may be claimable at the 
regular 50 percent Federal matching rate for administration under Medicaid.  This new policy 
will be addressed in the forthcoming final Medicaid School-Based Administrative Claiming 
Guide. 
 
Effective January 1, 2003, claims for administrative costs at the enhanced SPMP matching rate 
in the school setting are no longer allowable.  However, that does not mean all SPMP claims in 
the past were necessarily allowable.  The allowability of SPMP claims for periods prior to the 
effective date of the policy change will be based on the specific aspects of such claims, in 
accordance with the requirements for claiming at the enhanced SPMP matching rate. 
 
If you have any questions regarding this letter, please contact Richard Strauss of my staff at 
(410) 786-2019. 
 
              Sincerely, 
 
              /s/ 
               
              Dennis G. Smith 
              Director 
 
 
cc: 
CMS Regional Administrators 
 
CMS Associate Regional Administrators 
    for Medicaid and State Operations 
 
Lee Partridge 
Director, Health Policy Unit 
American Public Human Services Association 
 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
 
Matt Salo 
Director of Health Legislation 
National Governors Association 
  Page 3  State Medicaid Director 
 
Brent Ewig 
Senior Director, Access Policy 
Association of State and Territorial Officials 
 
Trudi Matthews 
Senior Health Policy Analyst 
Council of State Governments 
 
Jim Frogue 
Acting Director, Health and Human Services Task Force 
American Legislative Exchange Council