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[Federal Register Volume 78, Number 31 (Thursday, February 14, 2013)]
[Rules and Regulations]
[Pages 10525-10538]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-03443]

[[Page 10525]]

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DEPARTMENT OF EDUCATION

34 CFR Part 300

RIN 1820-AB64
[Docket ID ED-2011-OSERS-0012]

Assistance to States for the Education of Children With 
Disabilities

AGENCY: Office of Special Education and Rehabilitative Services, 
Department of Education.

ACTION: Final regulations.

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SUMMARY: The Secretary of Education (Secretary) amends regulations for 
Part B of the Individuals with Disabilities Education Act (IDEA or 
Act). These regulations govern the Assistance to States for the 
Education of Children with Disabilities program, including the 
Preschool Grants for Children with Disabilities program. These 
amendments revise the parental consent requirements a public agency 
must meet before it may access for the first time a child's or parent's 
public benefits or insurance (e.g., Medicaid) to pay for services 
required under the Act; ensure that parents of children with 
disabilities are specifically informed of all of their legal 
protections when public agencies seek to access public benefits or 
insurance (e.g., Medicaid) to pay for services required under the Act; 
and address the concerns expressed by State educational agencies (SEAs) 
and local educational agencies (LEAs) that requiring parental consent 
each time access to public benefits or insurance is sought, in addition 
to the parental consent required by the Family Educational Rights and 
Privacy Act (FERPA) and section 617(c) of the IDEA, imposes unnecessary 
costs and administrative burdens.

DATES: These regulations are effective on March 18, 2013.

FOR FURTHER INFORMATION CONTACT: Mary Louise Dirrigl, U.S. Department 
of Education, 550 12th Street SW., Potomac Center Plaza, Room 5156, 
Washington, DC 20202-2641. Telephone: (202) 245-7324. If you use a 
telecommunications device for the deaf (TDD) or a text telephone (TTY), 
you may call the Federal Relay System (FRS) at 1-800-877-8339.
    Individuals with disabilities can obtain a copy of this document in 
an alternative format (e.g., Braille, large print, audiotape, or 
compact disk) upon request to the contact person listed in the 
preceding paragraph.

SUPPLEMENTARY INFORMATION:
    Background: Section 300.154 of current regulations, which 
implements section 612(a)(12) and section 612(e) of the Act, addresses 
methods for ensuring services to children with disabilities, including 
the responsibility of non-educational public agencies to provide or pay 
for required special education or related services that are necessary 
to ensure the provision of a free appropriate public education (FAPE) 
to children with disabilities in the State. Specifically, Sec.  
300.154(h), which implements section 612(e) of the Act, provides that 
Part B of the Act does not alter requirements imposed on States by 
Titles XIX and XXI of the Social Security Act or other public benefits 
or insurance programs. Accordingly, Sec.  300.154(a) reinforces this 
important principle and emphasizes each State's obligation to develop 
interagency agreements or other mechanisms for coordination between 
educational and non-educational public agencies to ensure that all 
services necessary to provide FAPE are provided to children with 
disabilities at no cost to the parent, including services such as 
assistive technology devices or assistive technology services, related 
services, supplementary aids and services, and transition services. To 
that end, Sec.  300.154(a), consistent with section 612(a)(12)(A)(i) of 
the Act, requires States to identify the financial responsibility of 
non-educational public agencies, including the State Medicaid agency or 
other public insurers of children with disabilities, for providing 
services required for FAPE, and specifies that the financial 
responsibility of Medicaid and other public insurers of children with 
disabilities must precede the financial responsibility of the LEA 
responsible for developing the child's IEP. Further, Sec.  
300.154(b)(1)(ii), provides that a non-educational public agency may 
not disqualify a covered service for reimbursement because that service 
is provided in a school context.
    On September 28, 2011, the Department published a notice of 
proposed rulemaking (NPRM) in the Federal Register (76 FR 60310). In 
the preamble, the Secretary discussed the changes proposed to the 
regulations that govern the use of a child's or parent's public 
benefits or insurance to provide or pay for services required under 
Part B of the IDEA.

Major Changes in the Regulations

    The Department has made several significant changes to the 
regulations proposed in the NPRM. Specifically:
     We have added new Sec.  300.154(d)(2)(iv), which clarifies 
the parental consent a public agency must obtain prior to accessing a 
child's or parent's public benefits or insurance for the first time. 
Paragraph (A) of new Sec.  300.154(d)(2)(iv) describes the specific 
elements of the written parental consent that a public agency must 
obtain under FERPA and IDEA before it may release for billing purposes 
a child's personally identifiable information to a public benefits or 
insurance program (e.g., Medicaid). Paragraph (B) of new Sec.  
300.154(d)(2)(iv) requires that the one-time consent described in new 
Sec.  300.154(d)(2)(iv)(A) must specify that the parent understands and 
agrees that the public agency may access the child's or parent's public 
benefits or insurance to pay for services under part 300.
     Because we have added the parental consent provision in 
new Sec.  300.154(d)(2)(iv), we have moved the provision requiring 
public agencies to provide written notification to the child's parents 
in proposed Sec.  300.154(d)(2)(iv) to new Sec.  300.154(d)(2)(v). This 
new paragraph incorporates, with some minor modifications from the 
proposed regulations, the specific information that must be included in 
this written notification. In addition final Sec.  300.154(d)(2)(v) 
requires that the public agency provide this written notification to 
the child's parents both prior to accessing a child's or parent's 
public benefits or insurance for the first time, and annually 
thereafter. The Department's rationale for these changes is discussed 
in the Analysis of Comments and Changes section of this preamble.

Analysis of Comments and Changes

Introduction

    In response to the invitation in the NPRM, more than 500 parties 
submitted comments. An analysis of the comments and of the changes we 
made to the regulations as a result follows this introduction. The 
perspectives of parents, individuals with disabilities, State and local 
education officials, advocacy organizations, and others were useful in 
helping us identify and formulate these changes.
    We discuss substantive issues under the sections of the regulations 
to which they pertain. The analysis generally does not address--
    (a) Minor changes, including technical changes made to the language 
published in the NPRM;
    (b) Suggested changes the Secretary is not legally authorized to 
make under applicable statutory authority; and
    (c) Comments that express concerns of a general nature about the 
Department or other matters that are not directly relevant to these 
regulations, including requests for information about the

[[Page 10526]]

provision of special education and related services and other matters 
that are within the purview of State and local decision-makers.

Methods of Ensuring Services (Sec.  300.154)

Nature of Public Benefits or Insurance Programs
    Comment: One commenter requested clarification on the meaning of 
the phrase ``seeking to bill or otherwise access the Medicaid or other 
public benefits or insurance programs in which a child participates to 
provide or pay for services required under Part B of the Act'' in the 
preamble of the NPRM.
    Discussion: We interpret the comment as a request to clarify the 
phrase ``other public benefits or insurance programs.'' The names of 
public benefits or insurance programs may vary across States. 
Generally, these programs are associated with the State agency that is 
responsible for the administration of a State's Medicaid program, which 
is a source of funding for medically necessary school-based services 
that are covered benefits under Medicaid. Another example of a public 
benefits or insurance program is the Children's Health Insurance 
Program (CHIP). These final regulations apply to all public benefits 
and insurance programs regardless of whether they are Medicaid 
programs.
    All of these programs provide sources of funding for public 
agencies to pay for services required under part 300, provided certain 
conditions are met. Specifically, provided the conditions described in 
new Sec.  300.154(d)(2)(iv) and (v) for obtaining parental consent and 
providing written notification to the child's parents are met, public 
agencies may access benefits from these programs to bill for services 
provided by the LEA that are required under Part B of the Act.
    We note that in some States, public benefits or insurance programs 
may also be the provider of services that are required under part 300 
and are included in the individualized education programs (IEPs) of 
children with disabilities. In these situations the public agency would 
use the public benefits or insurance program to pay for those services. 
However, the parental consent required under FERPA and Sec.  300.622 
that is described in new Sec.  300.154(d)(2)(iv)(A) and the written 
notification to the child's parents required in new Sec.  
300.154(d)(2)(v) would apply only if the public agency seeks to access 
funds under the public benefits or insurance program for billing 
purposes to pay for services required under part 300.
    Changes: None.

Parental Consent

    Comment: Many commenters supported removing the requirement in 
current Sec.  300.154(d)(2)(iv)(A) that a public agency obtain parental 
consent each time it seeks access to public benefits or insurance. The 
commenters stated that eliminating this requirement would reduce 
paperwork and simplify the process for public agencies to access a 
child's or parent's public benefits or insurance. Other commenters 
expressed concern that eliminating the parental consent requirement 
would diminish parental rights. Another commenter requested that the 
regulations be revised to require consent to access a child's or 
parent's public benefits or insurance once every three years.
    Discussion: We continue to believe that current Sec.  
300.154(d)(2)(iv)(A) should be removed. As we discussed in the NPRM, 
this change will help alleviate the burden on public agencies to obtain 
parental consent each time they seek to access public benefits or 
insurance, and will result in a more streamlined process for accessing 
a child's or parent's public benefits or insurance to pay for services 
provided under Part B of the Act. With the changes we are making in 
these final regulations, we do not believe removing this requirement 
will result in diminished protections for parents and children. Nor do 
we believe that requesting periodic consent every three years, as 
suggested by one commenter, would provide additional protection for 
parents. A periodic consent would apply only to the services that would 
be billed to the child's or parent's public benefits or insurance at 
the time that the parent's consent is sought. Therefore, if a service 
billed to the child's or parent's public benefits or insurance changes 
within the three year period, the consent would not apply to the 
additional services.
    Changes: None.
    Comment: Some commenters requested clarification about the parental 
consent requirements in 34 CFR part 99 and Sec.  300.622 and asked how 
those requirements would apply to the use of public benefits or 
insurance to pay for special education and related services. Some 
commenters recommended that the proposed regulations be revised to 
require a public agency to obtain an initial, one-time, informed 
consent to access a child's or parent's public benefits or insurance in 
addition to the consent already required under 34 CFR part 99 and Sec.  
300.622 to release personally identifiable information to a public 
benefits or insurance program. These commenters stated that this one-
time, initial consent would offer more protection for families than the 
consent required under 34 CFR part 99 and Sec.  300.622 alone because 
the one-time consent would ensure that there is an ongoing dialogue 
between the school district and the parents on the use of their public 
insurance.
    Discussion: We agree with commenters who suggested that it would be 
helpful to clarify the parental consent requirements in 34 CFR part 99 
and Sec.  300.622 in the final regulations. We referenced these 
requirements in the proposed regulations in Sec.  300.154(d)(2)(iv)(A) 
when we discussed the elements of written notification to be provided 
to parents, but the reference was very brief. Therefore, we are 
providing in new Sec.  300.154(d)(2)(iv)(A) that the parental consent 
must meet the requirements in 34 CFR 99.30 and Sec.  300.622 prior to 
accessing a child's or parent's public benefits or insurance for the 
first time. And, to clarify what is required under these provisions, 
and thereby ensure that the public agency provides the parents all 
relevant information they need to make an informed decision, we are 
providing in new Sec.  300.154(d)(2)(iv)(A) that such consent must 
specify the personally identifiable information that may be disclosed 
(e.g., records or information about the services that may be provided 
to a particular child), the purpose of the disclosure (e.g., billing 
for services under part 300), and the agency to which the disclosure 
may be made (e.g., the State's public benefits or insurance program 
(e.g., Medicaid)). We believe these changes will clarify the parental 
consent that must be obtained under 34 CFR 99.30 and Sec.  300.622 
before a public agency discloses, for billing purposes, the child's 
personally identifiable information to the agency responsible for the 
administration of the State's public benefits or insurance program 
(e.g., Medicaid) prior to accessing a child's or parent's public 
benefits or insurance for the first time to pay for services required 
under part 300.
    To ensure that a parent fully understands that the purpose of the 
consent obtained under 34 CFR part 99 and Sec.  300.622 is to enable 
the public agency to access the child's or parent's public benefits or 
insurance for the first time and in the future, we are adding new Sec.  
300.154(d)(2)(iv)(B). This section provides that the consent to access 
public benefits or insurance must state that the parent understands and 
agrees

[[Page 10527]]

that the public agency may access the child's or parent's public 
benefits or insurance to pay for services under part 300. We note that 
to comply with the new parental consent requirement in final Sec.  
300.154(d)(2)(iv)(B), a public agency may add the specific statement 
included in new Sec.  300.154(d)(2)(iv)(B) to the consent required 
under 34 CFR 99.30 and Sec.  300.622 to release personally identifiable 
information to a public benefits or insurance program (e.g., Medicaid) 
for billing purposes, or it may choose to obtain this consent statement 
separately.
    Further, to help ensure that a parent understands his or her rights 
when a public agency seeks to use or uses their or their child's public 
benefits or insurance to pay for services under part 300 we are also 
specifying in Sec.  300.154(d)(2)(iv)(A) that the public agency must 
provide the written notification described in final Sec.  
300.154(d)(2)(v) (proposed Sec.  300.154(d)(2)(iv)) before obtaining 
parental consent.
    Changes: We have revised the regulations to add a new Sec.  
300.154(d)(2)(iv). In final Sec.  300.154(d)(2)(iv), we have clarified 
that parental consent must be obtained before a public agency accesses 
a child's or parent's public benefits or insurance for the first time.
    We have specified that the public agency must provide written 
notification to the child's parents consistent with Sec.  
300.154(d)(2)(v) before parental consent is obtained.
    We have added new paragraph (d)(2)(iv)(A) to describe the parental 
consent required by 34 CFR 99.30 and Sec.  300.622 that a public agency 
must obtain prior to disclosing for billing purposes a child's 
personally identifiable information to a State's public benefits or 
insurance before accessing a child's or parent's public benefits or 
insurance for the first time.
    We have added new Sec.  300.154(d)(2)(iv)(B) to require that the 
consent must specify that the parent understands and agrees that the 
public agency may access the child's or parent's public benefits or 
insurance to pay for services under part 300.
    Comment: A few commenters asked whether a public agency must obtain 
a new consent following the publication of the final regulations if the 
agency already has a parent's consent on file.
    Discussion: As described below, under these final regulations, a 
new consent is not necessary provided there is no change in any of the 
following: the type (e.g., physical therapy or speech therapy) of 
services to be provided to the child; the amount of services to be 
provided to the child (frequency or duration); or the amount that the 
public agency charges to the public benefits or insurance program.
    Under current regulations, a public agency is required to obtain 
parental consent to access a child's or parent's public benefits or 
insurance to bill for specific services. Current Sec.  
300.154(d)(2)(iv)(A) provides that consistent with the definition of 
``consent'' in Sec.  300.9(b), the parent understands and agrees in 
writing to the carrying out of the activity for which his or her 
consent was sought. The consent must describe the activity, the records 
(if any) that were released, and the entity to whom the records were 
released. Therefore, a public agency that has on file a parental 
consent that meets the requirements of current Sec.  
300.154(d)(2)(iv)(A) and 34 CFR 99.30 and Sec.  300.622 will not be 
required to obtain a new parental consent following the publication of 
these final regulations, as long as the type or amount of services that 
the public agency will bill to public insurance or the amount that the 
public agency charges to the public benefits or insurance program does 
not change. By previously consenting, the parent understood and agreed 
that the public agency was accessing the child's or parent's public 
benefits or insurance (e.g., Medicaid) to pay for a specified type, 
amount, and cost of services under part 300.
    However, for children for whom the public agency already has 
consent under current Sec.  300.154(d)(2)(iv)(A), the first time after 
the effective date of these regulations that there is a change in the 
type or amount of services to be provided, or the amount charged by the 
public agency or cost of services billed to the public benefits or 
insurance program, the public agency must provide the parents the 
written notification described in new Sec.  300.154(d)(2)(v). The 
public agency must also obtain consent, consistent with new Sec.  
300.154(d)(2)(iv)(B), stating that the parent understands and agrees to 
the public agency's accessing the child's or parent's public benefits 
or insurance to pay for services under part 300. Once the public agency 
obtains this one-time consent, the public agency will not be required 
to obtain any further parental consent in the future before it accesses 
the child's or parent's public benefits or insurance, regardless of 
whether there is any change in the type, amount, or cost of services to 
be billed to the public benefits or insurance program (e.g., Medicaid). 
However, the public agency will annually thereafter be required to 
provide parents with the written notification described in final Sec.  
300.154(d)(2)(v), to help ensure that parents understand their rights 
when a public agency uses their or their child's public benefits or 
insurance to pay for services under part 300.
    Of course, with respect to children with disabilities who receive 
special education and related services that were not previously billed 
to the child's or parent's public benefits or insurance program (e.g., 
Medicaid), a public agency must provide the child's parents the written 
notification described in new Sec.  300.154(d)(2)(v) and obtain 
parental consent in accordance with final Sec.  300.154(d)(2)(iv)(A) 
and (B) prior to accessing the child's or parent's public benefits or 
insurance (e.g., Medicaid) for the first time to pay for services under 
part 300. This parental consent must meet the requirements in 34 CFR 
99.30 and Sec.  300.622 that apply prior to the release of the child's 
personally identifiable information to the public benefits or insurance 
program (e.g., Medicaid) for billing purposes. The consent must also 
include a statement specifying that the parent understands and agrees 
that the public agency may access the child's or parent's public 
benefits or insurance to pay for services under part 300.
    Changes: None.
    Comment: Some commenters asked for clarification regarding the 
Department's position in the March 8, 2007, letter to Mr. John Hill, 
particularly in situations when parental consent is given directly to 
another agency, such as the State Medicaid agency.
    Discussion: Our position has not changed from what it was in the 
March 8, 2007, letter to Mr. John Hill. See http://www2.ed.gov/policy/speced/guid/idea/letters/2007-1/hill030807consent1q2007.pdf. The public 
agency is not required to independently obtain separate parental 
consent, so long as the parental consent provided to the other agency 
meets the requirements of 34 CFR 99.30 and Sec.  300.622, and current 
Sec.  300.154(d)(2)(iv)(A) and there is no change in the type, amount, 
or cost of services to be billed to the public insurance program. 
However, if the type, amount, or cost of services to be billed to the 
public benefits or insurance program changes, the public agency must 
provide to the parent the written notification described in new Sec.  
300.154(d)(2)(v) (proposed Sec.  300.154(d)(2)(iv)) and obtain parental 
consent on a one-time basis in accordance with new Sec.  
300.154(d)(2)(iv)(B). This consent must specify that the parent 
understands and agrees that the public agency may access the child's or

[[Page 10528]]

parent's public benefits or insurance to pay for services under part 
300.
    Changes: None.
    Comment: One commenter requested the word ``informed'' be placed in 
front of the word ``consent'' in the final regulations.
    Discussion: We do not believe this change is necessary for the 
reasons explained in response to the comments regarding the parental 
consent provisions and the written notification requirement. We believe 
that the consent required by these final regulations is informed 
consent. Parents understand that they are consenting to enable the 
public agency to access their or their child's public benefits or 
insurance (e.g., Medicaid) to pay for services under part 300.
    Changes: None.
    Comment: One commenter questioned the value of the proposed 
regulatory change if school districts will have to obtain parental 
consent to be able to provide the child's personally identifiable 
information prior to submitting that information to Medicaid. Other 
commenters asked the Department to eliminate any requirements to obtain 
parental consent for Medicaid reimbursable services. These commenters 
asserted that IDEA contains no requirement to obtain consent before a 
public agency seeks reimbursement for Medicaid-eligible services to 
Medicaid-eligible children. The commenters also asserted that other 
non-school Medicaid providers are permitted to seek reimbursement for 
Medicaid-eligible services to Medicaid-eligible individuals, including 
school age children, without seeking parental consent.
    Discussion: Under these final regulations, educational agencies 
covered by 34 CFR part 99 and public agencies under the IDEA must 
continue to adhere to the consent requirements in 34 CFR 99.30 and 
Sec.  300.622, which we describe in new Sec.  300.154(d)(2)(iv)(A). 
Under FERPA and section 617(c) of the Act, a public agency may not 
release personally identifiable information from a child's education 
records to a public benefits or insurance program without prior 
parental consent, except for a few specified exceptions that do not 
include the release of education records for billing purposes. 
Therefore, final Sec.  300.154(d)(2)(iv)(A) describes the parental 
consent that is required under 34 CFR 99.30 and Sec.  300.622 before a 
public agency may release personally identifiable information from 
education records for billing purposes to a public benefits or 
insurance program prior to accessing a child's or parent's public 
benefits or insurance for the first time. Additionally, new Sec.  
300.154(d)(2)(iv)(B) requires a one-time consent specifying that the 
parent understands and agrees that the public agency may access the 
child's or parent's public benefits or insurance to pay for services 
under part 300. We believe that these final regulations continue to 
protect a parent's rights under FERPA and confidentiality rights under 
IDEA, and they address concerns from public agencies about costs and 
the administrative burden associated with obtaining parental consent 
each time access to public benefits insurance is sought.
    Changes: None.
    Comment: A few commenters recommended that we retain the current 
regulations and require parental consent each time a public agency 
seeks access to Medicaid or other public benefits or insurance programs 
in order to hold schools accountable for what they bill to the State 
Medicaid program and to facilitate better communication between the 
school and parent.
    Discussion: We do not believe that it is necessary to retain the 
current parental consent requirement in order to hold schools 
accountable for services they bill to public insurance programs (e.g., 
Medicaid). We believe the parental consent required in 34 CFR 99.30 and 
Sec.  300.622 (now described in new Sec.  300.154(d)(2)(iv)(A)) and in 
new Sec.  300.154(d)(2)(iv)(B) will provide sufficient communication 
with and protection for parents while making it easier for public 
agencies to access those benefits or insurance to pay for services 
required under part 300. The former is required before disclosing a 
child's personally identifiable information to a State's public 
benefits or insurance program (e.g., Medicaid) for billing purposes. 
The latter requires that the parent understands and agrees that a 
public agency may access their or their child's public benefits or 
insurance to pay for services required under part 300.
    In addition to the parental protections provided for in these final 
regulations, a State's Medicaid agency or other public benefits or 
insurance program is already responsible for monitoring schools and 
LEAs to ensure that children are receiving the services for which the 
public agency bills the public benefits or insurance program. Of 
course, if a public agency that accesses a child's or parent's public 
benefits or insurance to pay for required services does not provide 
those services at no cost to the parents, an SEA must use its general 
supervisory authority under Sec.  300.149 to achieve compliance. This 
authority requires each SEA to ensure that all educational programs for 
children with disabilities administered within the State meet State 
education standards and the requirements of the Act and part 300. 
Pursuant to Sec. Sec.  300.149(b) and 300.600, an SEA must monitor 
public agencies' implementation of the Act and Part B regulations and 
ensure timely correction of any identified noncompliance. Also, parents 
may use IDEA's dispute resolution mechanisms to raise concerns 
regarding the denial of appropriate services at no cost to the parents. 
These mechanisms include mediation under Sec.  300.506, due process 
complaint procedures under Sec. Sec.  300.507 through 300.516, and 
State complaint procedures under Sec. Sec.  300.151 through 300.153. 
Further, a parent or an organization or individual other than the 
child's parents, including one from another State, may file a signed, 
written complaint alleging a violation of Part B of the Act or the Part 
B regulations. We believe all of these protections help to ensure 
public agency accountability under the IDEA.
    The Secretary also believes that the changes we are making in these 
final regulations will improve communication between the school and 
parents. Requiring written notification to the child's parents, 
consistent with new Sec.  300.154(d)(2)(v), before a public agency 
obtains consent will provide important information that school 
districts were not required to provide parents in the past. This 
includes information about the parental consent requirements in final 
Sec.  300.154(d)(2)(iv) and a parent's right to withdraw consent at any 
time.
    Changes: None.
    Comment: One commenter asked whether the public agency may ask a 
parent for permission to disclose personally identifiable information 
to the State public benefits or insurance program if the parent 
previously declined to provide consent for such disclosure.
    Discussion: As in the past, a public agency may make reasonable 
requests to obtain the parental consent required under new Sec.  
300.154(d)(2)(iv) from a parent who previously declined to provide 
consent to disclose personally identifiable information to the State's 
public benefits or insurance program (e.g., Medicaid) for billing 
purposes to pay for services required under part 300. Prior to seeking 
to obtain this parental consent, the public agency must provide the 
parents with written notification consistent with new Sec.  
300.154(d)(2)(iv).
    Changes: None.
    Comment: One commenter recommended that the regulations include 
guidance on whether new

[[Page 10529]]

parental consent needs to be obtained prior to disclosing personally 
identifiable information to access a child's or parent's public 
benefits or insurance when consent is obtained in one school district, 
but the child subsequently relocates to another school district within 
the State or to a location outside of the State.
    Discussion: Under Sec.  300.323(e) through (g), States must have 
policies and procedures in effect to govern IEPs for students who 
transfer from one public agency to another, and we believe that those 
policies and procedures could address the parental consent and written 
notification requirements that apply to accessing public benefits or 
insurance for billing purposes for services required under part 300 for 
children who relocate to another public agency or another State. The 
responsibility for obtaining parental consent prior to the disclosure 
of personally identifiable information for billing purposes and before 
accessing a child's or parent's public benefits or insurance for the 
first time rests with the public agency responsible for providing a 
free appropriate public education (FAPE) to the child, not with the 
individual school. Thus, if a child who had an IEP in effect in a 
previous public agency transfers to a school in a new public agency in 
the same school year, whether or not within the same State, the new 
public agency would need to obtain a new parental consent under new 
Sec.  300.154(d)(2)(iv)(A)-(B) before it can access the child's or 
parent's public benefits or insurance for the first time to pay for 
services under part 300. This new parental consent is to enable the new 
public agency to release the child's personally identifiable 
information for billing purposes to the public benefits or insurance 
program (e.g., Medicaid). Consistent with new Sec.  
300.154(d)(2)(iv)(B), the consent also must specify that the parent 
understands and agrees that the new public agency may access the 
child's or parent's public benefits or insurance to pay for services 
under part 300. Likewise, in these transfer situations, the new public 
agency must provide the child's parents with the written notification 
described in final Sec.  300.154(d)(2)(v) prior to obtaining parental 
consent for that agency to access the child's or parent's public 
benefits or insurance for the first time. Further, the new public 
agency must provide this written notification to the child's parents 
annually thereafter. However, if a child transfers to a different 
school but remains within the same public agency, any parental consent 
that the public agency has previously obtained that meets the 
requirements in new Sec.  300.154(d)(2)(iv)(A)-(B) would continue to 
apply.
    Changes: None.
    Comment: One commenter recommended that electronic signatures for 
consent be accepted as valid due to the increasing use of virtual 
meetings.
    Discussion: A public agency may accept digital or electronic 
signatures in obtaining the parental consent required under 34 CFR 
99.30 and Sec.  300.622, as described in new Sec.  
300.154(d)(2)(iv)(A), before disclosing, for billing purposes, the 
child's personally identifiable information to the agency responsible 
for the administration of the State's public benefits or insurance 
program (e.g., Medicaid) prior to accessing the child's or parent's 
public benefits or insurance for the first time. Among other 
requirements, under 34 CFR 99.30(a), the parental consent that must be 
obtained before disclosure of personally identifiable information must 
be signed and dated. Section 99.30(d) provides that this consent may 
include a record and signature in electronic form that--
    (1) Identifies and authenticates a particular person as the source 
of the electronic consent; and
    (2) Indicates such person's approval of the information contained 
in the electronic consent, i.e., disclosure of the child's personally 
identifiable information to the agency responsible for the 
administration of the State's public benefits or insurance program 
(e.g., Medicaid) for billing purposes to pay for services under part 
300. Additionally, the electronic consent must include a statement that 
the parent understands and agrees that the public agency may access the 
child's or parent's public benefits or insurance to pay for services 
under part 300.
    Changes: None.

Parental Notification

    Comment: Many commenters supported the requirement in proposed 
Sec.  300.154(d)(2)(iv) that prior to accessing a child's or parent's 
public benefits or insurance, the public agency must provide written 
notification to parents consistent with current Sec.  300.503(c). 
Several commenters stated that this type of written notification would 
help to protect children's and parents' rights under IDEA and FERPA. 
These commenters agreed with the Department's analysis in the NPRM that 
the proposed written notification requirement would provide parents 
with important information they need to understand their rights in the 
special education process. They also stated that the proposed 
requirement would ensure that all parents of children with disabilities 
receive full disclosure of their rights on the use of their public 
benefits or insurance for services under Part B, particularly their 
rights under FERPA and the IDEA confidentiality requirements.
    A few commenters recommended that the written notification in 
proposed Sec.  300.154(d)(2)(iv) be provided at the child's initial IEP 
Team meeting. Another commenter expressed concern that providing the 
written notification at the initial IEP Team meeting would overwhelm 
parents. Some commenters suggested that LEAs be given discretion on 
when to provide the notification. One commenter asked if the proposed 
parental written notification may be mailed to the parents.
    Several commenters expressed concern about only providing parents 
with a one-time written notification. They instead recommended that a 
written notification be provided to parents at each subsequent annual 
IEP Team meeting and when there is an amendment to the IEP during the 
course of the school year that would result in a change to the type or 
amount of services billed to a public benefits or insurance program. 
These commenters stated that requiring more frequent written 
notifications would provide parents with greater protections and remind 
parents that they can reconsider their consent in light of changed 
circumstances a family may experience over time (e.g., change in the 
child's disability, change in living situation, change in guardianship, 
etc.).
    Discussion: The Department appreciates the commenters' strong 
support for the written notification provision in proposed Sec.  
300.154(d)(2)(iv) and has retained this provision in new Sec.  
300.154(d)(2)(v) with a few minor modifications. We agree with 
commenters generally that more frequent notifications to the child's 
parents in addition to the initial written notification to the child's 
parents would be beneficial. Therefore, we are amending new Sec.  
300.154(d)(2)(v) (proposed Sec.  300.154(d)(2)(iv)) to require that the 
public agency provide written notification that meets the requirements 
of Sec.  300.503(c) to the child's parents prior to accessing a child's 
or parent's public benefits or insurance for the first time and 
annually thereafter. The requirement that the notice be written in 
language understandable to the general public and in the native 
language of the parent or other mode of communication used by the 
parent, unless it is clearly

[[Page 10530]]

not feasible to do so, will provide additional protections for children 
and parents. This annual written notification will be especially 
important for parents in families that experience a change in 
circumstances over time and for children whose parent, as defined in 
Sec.  300.30, changes often (e.g., children in the foster care system), 
children whose guardianship changes, or children who live with an 
individual acting in place of the biological or adoptive parent. 
Providing an annual written notification to parents also will serve to 
remind them of important safeguards previously explained. Further, as 
discussed earlier, we are specifying in final Sec.  300.154(d)(2)(iv) 
that this written notification must be provided to the child's parents 
before the public agency obtains their consent to access their or their 
child's public benefits or insurance for the first time.
    In those instances where a child has been determined eligible for 
Medicaid prior to the IEP Team meeting, the public agency could provide 
the child's parents with the written notification described in final 
Sec.  300.154(d)(2)(v) at the IEP Team meeting or at some other 
meeting, so long as the child's parents receive the written 
notification before the public agency obtains the requisite parental 
consent under final Sec.  300.154(d)(2)(iv) to access the parent or 
child's public benefits or insurance for the first time.
    We do not agree with those commenters who recommended requiring the 
written notification described in proposed Sec.  300.154(d)(2)(iv) be 
provided at the child's initial IEP Team meeting or at subsequent IEP 
Team meetings. We appreciate the importance of parent participation in 
the IEP process, and we recognize that an IEP Team meeting could 
provide a public agency with a meaningful opportunity to explain to the 
parents the components of the written notification and respond to any 
questions the parents may have.
    As a practical matter, however, eligibility for Medicaid may not 
necessarily coincide with annual IEP Team meetings. Therefore, 
requiring written notification at an IEP Team meeting could mean that a 
public agency would have to convene an additional IEP Team meeting for 
those children found to be eligible for Medicaid only after the annual 
IEP Team meeting.
    We also do not agree with the commenters who suggested that written 
notification be provided each time the public agency amends a child's 
IEP in a manner that would result in a change to the type or amount of 
services billed to the public benefits or insurance program. We believe 
that providing parents the annual written notification in accordance 
with final Sec.  300.154(d)(2)(v) is sufficient protection in these 
situations. Of course, nothing in these regulations would prevent 
public agencies from providing parents the written notification 
described in final Sec.  300.154(d)(2)(v) more frequently than 
annually, if they deem it appropriate to do so. Further, nothing in 
these regulations would prevent public agencies from providing the 
notification described in final Sec.  300.154(d)(2)(v) to all parents 
of children with disabilities, regardless of whether the public agency 
is seeking to access the child's or parent's public benefits or 
insurance.
    There are a number of ways in which the public agency may provide 
the written notification to parents. The annual written notification 
may be mailed to the parents, provided at an IEP Team meeting if it 
occurs prior to the first time a public agency accesses a child's or 
parent's public benefits or insurance, or provided through other means 
determined by the public agency, so long as all of the written 
notification requirements in these final regulations are met, including 
the requirement in Sec.  300.154(d)(2)(v) that the public agency 
provide written notification before obtaining parental consent under 
new Sec.  300.154(d)(2)(iv).
    We decline to specify in the regulations when subsequent annual 
written notifications must be provided to parents because we believe 
that once the public agency provides the child's parents the written 
notification described in final Sec.  300.154(d)(2)(v) prior to 
accessing the child's or parent's public benefits or insurance for the 
first time, public agencies need to have the flexibility to determine 
the timing of subsequent annual written notifications.
    Finally, for those children with IEPs for whom services have 
previously been billed to Medicaid, when the final regulations become 
effective, the written notification requirement in final Sec.  
300.154(d)(2)(v) applies. The written notification, therefore, must be 
provided before the public agency may access the child's or parent's 
public benefits or insurance after these final regulations become 
effective and annually thereafter. As noted previously, no new parental 
consent would need to be obtained if there is no change in the type, 
amount, or cost of services to be billed to public benefits or 
insurance (e.g., Medicaid).
    However, in the future, if the type, amount, or cost of services 
billed to the public benefits or insurance program changes, the public 
agency must provide to the parent the written notification described in 
new Sec.  300.154(d)(2)(v) (proposed Sec.  300.154(d)(2)(iv)) before 
obtaining one-time parental consent in accordance with new Sec.  
300.154(d)(2)(iv)(B) specifying that the parent understands and agrees 
that the public agency may access the child's or parent's public 
benefits or insurance to pay for services under part 300 in the future.
    Changes: We have revised final Sec.  300.154(d)(2)(v) to specify 
that the written notification must be provided to the child's parents 
prior to accessing a child's or parent's public benefits or insurance 
for the first time and annually thereafter. To conform to the changes 
in new Sec.  300.154(d)(2)(iv), we have added a reference in new Sec.  
300.154(d)(2)(v)(A) to the new regulatory provision regarding parental 
consent in Sec.  300.154(d)(2)(iv).
    We have also revised new Sec.  300.154(d)(2)(v)(C) (proposed Sec.  
300.154(d)(2)(iv)(C)) to clarify that parents may withdraw their 
consent under part 99 and part 300 to the disclosure of their child's 
personally identifiable information to the agency responsible for the 
administration of the public benefits or insurance program (e.g., 
Medicaid). The reference to part 300 was inadvertently left out of 
proposed Sec.  300.154(d)(2)(iv)(C). We also have renumbered paragraphs 
(B) and (D) of the proposed regulations with no other changes.
    Comment: One commenter recommended that the written notification 
provided to parents clearly and prominently provide information to 
parents about the process of withdrawing consent for disclosure of 
personally identifiable information necessary to access public 
insurance.
    Discussion: Proposed Sec.  300.154(d)(2)(v)(C) provided that the 
written notification to the child's parents had to include a statement 
that parents have the right under 34 CFR part 99 to withdraw their 
consent to the disclosure of their child's personally identifiable 
information to the agency responsible for the administration of the 
State's public benefits or insurance program (e.g., Medicaid) at any 
time. This provision has been retained in final Sec.  
300.154(d)(2)(v)(C), but as noted in the response to comments about the 
timing of the written notification, this section has been revised to 
also include a reference to withdrawal of consent under part 300. The 
parents must be informed of this right in the written notification that 
the public agency must provide them prior to accessing their or their 
child's public benefits or insurance

[[Page 10531]]

for the first time and annually thereafter.
    FERPA and IDEA do not include specific provisions regarding the 
process for withdrawal of consent for the disclosure of a child's 
personally identifiable information; therefore, we are deferring to 
LEAs on procedures for withdrawal of this parental consent. However, 
once the parent withdraws consent under 34 CFR part 99 and part 300 to 
the disclosure of the child's personally identifiable information to 
the agency responsible for the administration of the State's public 
benefits or insurance program (e.g., Medicaid), the public agency 
responsible for providing FAPE to the child with a disability may no 
longer bill the public benefits or insurance program (e.g., Medicaid) 
to pay for services under part 300. The public agency must nevertheless 
continue to provide the child with all services required under part 300 
at no cost to the parents.
    Changes: None.
    Comment: A few commenters asked whether the proposed written 
notification takes the place of written parental consent for a child to 
participate in Medicaid-funded related services at school, particularly 
in a State where the public agency provides the child's IEP to the 
public benefits program so that the public benefits or insurance 
program may determine whether the related services are medically 
necessary and covered under the public benefits or insurance program.
    Discussion: The final regulations are clear that the written 
notification requirement in final Sec.  300.154(d)(2)(v) is separate 
and distinct from, and does not replace, the parental consent 
requirements in FERPA and IDEA that are now described in new Sec.  
300.154(d)(2)(iv)(A). Further, under new Sec.  300.154(d)(2)(iv)(B), 
this parental consent must specify that the parent understands and 
agrees that the public agency may access the child's or parent's public 
benefits or insurance to pay for services under part 300. The written 
notification requirements in final Sec.  300.154(d)(2)(v) (proposed 
Sec.  300.154(d)(2)(iv)) continue to underscore the significance of 
those requirements and now require that this written notification 
include an explanation of the parental consent requirements contained 
in new Sec.  300.154(d)(2)(iv)(A)-(B).
    These requirements continue to apply even in States where the 
public agency provides the IEP to the public benefits program to verify 
that the related services in the IEP are medically necessary and 
covered under the public benefits or insurance program. The consent 
required in this context must be obtained before the public agency 
accesses the child's or parent's public benefits or insurance for the 
first time to bill for services required under part 300 and after the 
public agency provides the written notification described in new Sec.  
300.154(d)(2)(v). Further, this consent must specify that the parent 
understands and agrees that the public agency may access the parent's 
or child's public benefits or insurance to pay for services under part 
300.
    We remind public agencies that they may not reduce or delay 
providing the services in a child's IEP solely because the State's 
public benefits or insurance program determined that the services 
required in the child's IEP are not medically necessary or not covered 
under the public benefits or insurance program. If the services are not 
medically necessary under Medicaid, a public agency would not receive 
reimbursement for them. But the public agency is not relieved of its 
responsibility under Part B to ensure that all required services in the 
IEP are provided at no cost to the parents, even if that means using 
Part B funds or sources of support other than the child's or parent's 
public benefits or insurance in order to ensure that the child receives 
all required services at no cost to the parents.
    Changes: None.
    Comment: A few commenters requested model language for the written 
notification requirement.
    Discussion: Following the publication of these final regulations, 
the Department intends to issue model language for the written 
notification requirement described in final Sec.  300.154(d)(2)(v).
    Changes: None.

Other Matters

    Comment: A few commenters stated that public agencies should not be 
permitted to bill Medicaid for educational services because this would 
deplete medical benefits that should be directed to families. Other 
commenters, concerned about the potential for Medicaid fraud, 
recommended that parents who consent to the use of Medicaid funds to 
pay for their child's school-based health services should be provided a 
quarterly statement of those services. Another commenter asked whether 
Medicaid may be billed for services the child does not receive.
    Discussion: These final regulations continue to permit public 
agencies to use Medicaid or other public benefits or insurance to 
provide or pay for services required under part 300, provided that 
those agencies comply with the consent requirements in 34 CFR 99.30 and 
Sec.  300.622, now described in final Sec.  300.154(d)(2)(iv)(A), 
including the requirement that parents provide their consent prior to 
the release of their child's personally identifiable information to the 
public benefits or insurance program for billing purposes before the 
public agency may access the parent's or child's public benefits or 
insurance for the first time. This consent must also specify that the 
parent understands and agrees that the public agency may access the 
child's or parent's public benefits or insurance to pay for services 
under part 300. Public benefits and insurance are important sources of 
financial support for services required under Part B. Section 
612(a)(12) of the Act requires the State to identify or have a method 
of defining the financial responsibility of non-educational public 
agencies for services required to provide FAPE to children with 
disabilities and that the financial responsibility of those non-
educational public agencies, including the State Medicaid agency and 
other public insurers of children with disabilities, must precede the 
financial responsibility of LEAs or the State agency responsible for 
developing the child's IEP. The statute, therefore, contemplates that 
public agencies responsible for providing education to children with 
disabilities under State law, in appropriate circumstances, access 
funds from public benefits and insurance programs (e.g., Medicaid) as a 
means of paying for services required under Part B.
    We do not believe it is necessary to require public agencies to 
provide quarterly statements of the dates and times children with 
disabilities are provided school-based health services. However, under 
Sec.  300.613 each participating agency must permit parents to inspect 
and review any education records relating to their child that are 
collected, maintained, or used by the agency to implement Part B of the 
Act. A parent, therefore, may request to review any education records 
relating to their child that have been sent to the State public 
benefits or insurance program.
    If parents believe public agencies are billing Medicaid for 
services that their child does not receive, they should file a 
complaint with the State agency responsible for the administration of 
the State's Medicaid program. The Department has no jurisdiction over 
complaints alleging Medicaid fraud. However, if a parent believes that 
a public agency has not provided his or

[[Page 10532]]

her child all required services at no cost to the parents, this could 
constitute a denial of FAPE under the Act and these regulations, and 
the parent could use IDEA's dispute resolution mechanisms to seek 
redress. These mechanisms include mediation under Sec.  300.506, the 
due process complaint procedures in Sec. Sec.  300.507 through 300.516, 
or the State complaint procedures in Sec. Sec.  300.151 through 
300.153. Note also that under the State complaint procedures in 
Sec. Sec.  300.151 through 300.153, any organization or individual 
other than the child's parent, including one from another State, may 
file a signed, written complaint alleging that a public agency has 
violated a requirement of Part B of the Act or the Part B regulations.
    Changes: None.
    Comment: A few commenters recommended that LEAs be included in the 
consent language on the Medicaid application form used in most States. 
The commenters stated that like hospitals and clinics, schools are 
providers of Medicaid services and do not need a separate consent form. 
One commenter requested that the written notice include a warning to 
parents that once in receipt of public benefits or insurance, the 
subsequent refusal to share such information with the Medicaid program 
is a violation of the terms of eligibility and is in many States 
considered a crime.
    Discussion: The Department does not administer Medicaid or other 
State public benefits or insurance programs and, therefore, cannot 
dictate what States choose to include on applications or how State 
programs choose to address parties that do not share required 
information with them. Under new Sec.  300.154(d)(2)(iv), if parents 
refuse to consent to release personally identifiable information to a 
public benefits or insurance program for billing purposes under 34 CFR 
99.30 and Sec.  300.622, the public agency may not access the child's 
or parents public benefits or insurance to pay for those services, and 
the child with a disability must continue to receive all special 
education and related services necessary for the provision of FAPE at 
no cost to the parents.
    Changes: None.
    Comment: A few commenters asked the Department to clarify whether 
the proposed regulations apply to the use of private insurance to pay 
for services to children with disabilities. One commenter expressed 
concern that under the proposed regulations, a family's right to 
privacy is linked to its economic status. Other commenters expressed 
concern that the regulations establish a dual standard for consent 
based on whether the child or parent is enrolled in a private insurance 
program or a public benefits or insurance program.
    Discussion: Final Sec.  300.154(d)(2)(iv)-(v) applies only to 
public benefits and insurance programs and does not apply to private 
insurance programs. The requirements for children with disabilities 
covered by private insurance are found in Sec.  300.154(e). For 
services required to provide FAPE to an eligible child under Part B of 
the Act, a public agency may access the parents' private insurance 
proceeds only if the parents provide consent consistent with Sec.  
300.9. Each time the public agency proposes to access the parents' 
private insurance, the agency must obtain parental consent and inform 
the parents that their refusal to permit the public agency to access 
their private insurance does not relieve the public agency of its 
responsibility to ensure that all required services are provided at no 
cost to the parents.
    We disagree with the comments that the proposed regulations set a 
dual standard based on economic status and enrollment in private versus 
public insurance. The Act places no financial obligations on private 
insurers; however, section 612(a)(12) of the Act places financial 
obligations on non-educational public agencies by requiring States to 
identify or have a method of defining the financial responsibility of 
non-educational public agencies, including the State Medicaid agency 
and other public insurers of children with disabilities, for services 
provided by the LEA that are necessary to provide FAPE to children with 
disabilities. No similar statutory provision exists regarding the use 
of private insurance. In addition, section 612(a)(12) of the Act 
requires that the financial responsibility of those non-educational 
public agencies, including the State Medicaid agency and other public 
insurers of children with disabilities, must precede the financial 
responsibility of an LEA or the State agency responsible for developing 
the child's IEP. This statutory provision also requires non-educational 
public agencies, such as a State Medicaid agency, to fulfill their 
obligations or responsibilities under State or Federal law to pay for 
services provided by LEAs required under Part B, if permitted under the 
public benefits or insurance program. To the extent that the final 
regulations treat people who have public and private insurance 
differently, the regulations merely reflect the operation of the Act.
    These final regulations are consistent with the Act and strengthen 
the privacy and confidentiality protections afforded to parents and 
children enrolled in public benefits or insurance programs who are 
eligible to receive special education and related services under Part B 
of the Act. For example, new Sec.  300.154(d)(2)(iv)(A) requires a 
public agency to obtain the parental consent required in Sec.  300.622 
and 34 CFR 99.30 before the agency accesses a child's or parent's 
public benefits or insurance for the first time. Additionally, final 
Sec.  300.154(d)(2)(iv)(B) provides that this consent must specify that 
the parent understands and agrees that the public agency may access a 
child's or parent's public benefits or insurance to pay for services 
under part 300. Further, in accordance with final Sec.  
300.154(d)(2)(v), the public agency must provide the child's parents 
with written notification consistent with Sec.  300.503(c) prior to 
obtaining parental consent to access a child's or parent's public 
benefits or insurance for the first time. A public agency must also 
provide this written notification annually thereafter. This written 
notification must inform the child's parents in language understandable 
to the general public and in the parent's native language or other mode 
of communication used by the parent, unless it is clearly not feasible 
to do so, of the following:
    (a) A statement of the parental consent provisions in Sec.  
300.154(d)(2)(iv)(A)-(B).
    (b) A statement of the ``no cost'' provisions under Sec.  
300.154(d)(2)(i)-(iii).
    (c) A statement that parents have the right under 34 CFR part 99 
and part 300 to withdraw their consent to disclosure of their child's 
personally identifiable information to the agency responsible for the 
administration of the State's public benefits or insurance program 
(e.g., Medicaid) at any time.
    (d) A statement that withdrawal of consent or refusal to provide 
consent under 34 CFR part 99 and part 300 to disclosure of personally 
identifiable information to the agency responsible for the 
administration of the State's public benefits or insurance program 
(e.g., Medicaid) does not relieve the public agency of its 
responsibility to ensure that all required services are provided at no 
cost to the parents.
    We believe these parental consent and written notification 
requirements will strengthen the protections afforded to parents and 
children enrolled in public benefits or insurance programs by 
specifically including the parent's right to withdraw their consent 
under 34 CFR part 99 and part 300 at any time.
    If a parent chooses to withdraw this consent, the public agency 
responsible for providing FAPE to the child with a disability may no 
longer bill the public benefits or insurance program (e.g.,

[[Page 10533]]

Medicaid) to pay for services required under part 300 and must ensure 
that the child receives all required services necessary to receive FAPE 
at no cost to the parents.
    Changes: None.
    Comment: One commenter stated that the proposed regulations would 
diminish the protections of FERPA and violate the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA). The commenter also 
asserted that the proposed regulations would violate the Equal 
Protection Clause because individuals without disabilities are not 
spending down their Medicaid resources and that the notice provision 
would violate due process.
    Discussion: HIPAA is administered by the U.S. Department of Health 
and Human Services and not by the Department of Education. HIPAA 
excludes from its definition of ``protected health information'' 
individually identifiable health information contained in education 
records covered by FERPA and records described under FERPA's medical 
treatment records provision (34 CFR 99.3, defining ``education 
records''). See 45 CFR 160.103. Thus, the term ``protected health 
information'' in the HIPAA Privacy regulations does not cover records 
protected by FERPA. The reason for this exception is that Congress, 
through FERPA, specifically addressed how education records and student 
treatment records should be protected.
    FERPA provides ample protections for these records, which include 
requiring public agencies to obtain prior consent from parents before a 
child's personally identifiable information is disclosed to the agency 
responsible for the administration of the State's public benefits or 
insurance program (e.g., Medicaid) for billing purposes. There is no 
exception under FERPA or under these final regulations that would 
permit the nonconsensual disclosure of personally identifiable 
information in education records to a public benefits or insurance 
program (e.g., Medicaid) for billing purposes. Likewise, the IDEA's 
confidentiality of information provisions in section 617(c) of the Act 
and Sec.  300.622 also require parental consent before personally 
identifiable information can be disclosed to a State's public benefits 
or insurance program for billing purposes (e.g., Medicaid). Therefore, 
nothing in these final regulations violates or is in any way 
inconsistent with either HIPAA or FERPA. In fact, the final regulations 
support FERPA in that they require written notification to inform 
parents of certain protections under FERPA.
    Further, neither the proposed nor final regulations violate the 
U.S. Constitution's Equal Protection Clause. On the contrary, they help 
to ensure that children, regardless of disability status, have equal 
access to education. The regulations facilitate access to FAPE by 
removing the requirement in current regulations for a public agency to 
obtain consent from the parent each time access to public benefits or 
insurance is sought, while continuing to require that the parental 
consent required by FERPA and section 617(c) of the IDEA prior to 
disclosure of personally identifiable information for billing purposes 
to a State's public benefits or insurance program, now described in 
final Sec.  300.154(d)(2)(iv)(A), be obtained before a public agency 
can access a child's or parent's public benefits or insurance for the 
first time.
    These final regulations also require that, in accordance with new 
Sec.  300.154(d)(2)(iv)(B), the consent must specify that the parent 
understands and agrees that the public agency may access the child's or 
parent's public benefits or insurance to pay for services under part 
300. Additionally, an important new protection is provided to parents 
through the written notification provision in new Sec.  
300.154(d)(2)(v), which must be provided to the child's parents prior 
to accessing the child's or parent's public benefits or insurance for 
the first time and annually thereafter.
    As in the past, these final regulations will continue to require, 
as specified in Sec.  300.154(d)(2)(i) through (d)(2)(iii), that the 
children of parents who consent to share their children's personally 
identifiable information with a State's public benefits or insurance 
program (e.g., Medicaid) for billing purposes continue to receive all 
required services under this part at no cost.
    Finally, we do not agree with the commenter's assertion that the 
notice would deny due process. Rather, the written notification 
required in new Sec.  300.154(d)(2)(v) would enhance due process 
protections for parents by providing them crucial information about 
when public agencies seek to access their or their child's public 
benefits or insurance.
    Changes: None.
    Comment: One commenter requested clarification on the example 
provided in the NPRM discussing ``Tommy'' and asked whether a related 
services provider is required to attend the IEP Team meeting when the 
team discusses the related service.
    Discussion: The IDEA does not expressly require that related 
services personnel attend IEP Team meetings. However, if a child with a 
disability has an identified need for a related service, it would be 
appropriate for the related services provider to attend the meeting. 
Additionally, if the public agency designates the related services 
provider as a required IEP Team member, the public agency must ensure 
that the individual attends the child's IEP Team meeting, unless the 
excusal provisions in Sec.  300.321(e) are met.
    Changes: None.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and, therefore, subject to 
the requirements of the Executive order and subject to review by the 
Office of Management and Budget (OMB). Section 3(f) of Executive Order 
12866 defines a ``significant regulatory action'' as an action likely 
to result in a rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local, or 
tribal governments or communities in a material way (also referred to 
as an ``economically significant'' rule);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in the 
Executive order.
    This regulatory action is a significant regulatory action subject 
to review by OMB under section 3(f)(4) of Executive Order 12866 because 
this action is economically significant.
    We have also reviewed these regulations under Executive Order 
13563, which supplements and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, Executive Order 
13563 requires that an agency--
    (1) Propose or adopt regulations only upon a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor their regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;

[[Page 10534]]

    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing these regulations only on a reasoned determination 
that their benefits justify their costs. In choosing among alternative 
regulatory approaches, we selected those approaches that maximize net 
benefits. Based on the analysis that follows, the Department believes 
that these regulations are consistent with the principles in Executive 
Order 13563.
    We also have determined that this regulatory action would not 
unduly interfere with State, local, and tribal governments in the 
exercise of their governmental functions.

Potential Costs and Benefits

    The following is an analysis of the costs and benefits of the 
significant changes reflected in these final regulations. In conducting 
this analysis, the Department examined the extent the changes made by 
these regulations add to or reduce the costs to States, LEAs, and 
others, as compared to the costs of implementing the current Part B 
program regulations. Based on the following analysis, the Secretary has 
concluded that the changes reflected in the final regulations will not 
impose significant costs on States, LEAs, and others.

Costs and Benefits

Current Section 300.154(d)
    Under current regulations, public agencies are required to obtain 
parental consent, consistent with Sec.  300.9, each time access to a 
child's or parents' public benefits or insurance is sought to pay for 
services identified in the child's IEP. This has meant that written 
parental consent to access public benefits or insurance must be 
obtained for a specified type of service (e.g., physical therapy, 
speech therapy), and amount of services (frequency or duration). If the 
type, amount, or cost of service changes, the public agency must obtain 
new parental consent covering the change in services to be charged to 
the child's or parents' public benefits or insurance.
New Sec.  300.154(d)(2)(iv) and (v)
    The final regulations eliminate the requirement to obtain consent 
every time that the type or amount of service changes, or the amount 
charged for services changes. Instead, the final regulations require 
public agencies to obtain an initial, one-time consent from parents 
before the agency seeks to access a child's or parent's public benefits 
or insurance (e.g., Medicaid). This consent must meet the parental 
consent requirements under 34 CFR part 99 and Sec.  300.622 and must 
specify that the parent understands and agrees that the public agency 
may access the child's or parent's public benefits or insurance to pay 
for services provided under part 300. This written consent is 
consistent with the consent currently required under Sec.  300.9(b), 
which specifies that the parent understands and agrees to the carrying 
out of the activity for which his or her consent is sought and the 
records to be released and to whom. However, consent under current 
Sec.  300.154(d)(2)(iv)(A) would no longer be valid if the public 
agency seeks to access public benefits or insurance for a different 
type or amount of services for a specified period of time.
    The final regulations also require public agencies to specifically 
inform parents of their rights and protections under the Act by 
providing written notification prior to obtaining consent to access 
public benefits or insurance for the first time. This written 
notification also must be provided to the child's parents annually 
thereafter. Thus, a public agency would be able to access a child's or 
parent's public benefits or insurance program to provide or pay for 
services required under Part B of the Act without obtaining parental 
consent each time it seeks access, provided that (1) the agency has 
complied with the parental consent requirements under FERPA and part 
300, as described in final Sec.  300.154(d)(2)(iv)(A), before 
personally identifiable information is released to a State's Medicaid 
agency or other public insurance program for billing purposes and (2) 
before seeking to access a child's or parent's public benefits or 
insurance program for the first time to provide or pay for services 
required under Part B.
    This written notification also must be provided annually 
thereafter. These changes allow public agencies to save the costs 
associated with obtaining written consent from parents each time access 
to their or their child's public benefits or insurance is sought. We 
estimate that the changes to final Sec.  300.154(d)(2)(iv) will result 
in net cost savings and provide an economic benefit to LEAs in many 
States.

Savings From Reduction in Current Requirements

    Although we do not have data on the number of children who 
participate in both IDEA Part B and public benefits or insurance 
programs, a Congressional Research Service (CRS) report indicates that 
at least 25 percent of children receiving services under Part B of IDEA 
are eligible for Medicaid services (including children who are eligible 
for but not enrolled in Medicaid).\1\ For this analysis, we assume that 
20-30 percent of the 6,558,000 students served under the Part B program 
are also enrolled in public benefits or insurance programs for a total 
of 1,311,600 to 1,967,400 children. While some LEAs do not currently 
use public benefits or insurance to pay for services that are eligible 
for reimbursement, we do not know the number of eligible students who 
are enrolled in these LEAs. Accordingly, this analysis assumes that all 
LEAs seek to use public benefits or insurance for all students who are 
served under Part B and are eligible for public benefits or insurance. 
As a result, our analysis likely overestimates the number of students 
for which LEAs currently need parental consent to access public 
benefits or insurance.
---------------------------------------------------------------------------

    \1\ U.S. Congressional Research Service. Individuals with 
Disabilities Education Act (IDEA) and Medicaid (RL31722; Jan. 31, 
2003), by Richard Apling and Elicia Herz.
---------------------------------------------------------------------------

Costs of Current Requirements

    Under the current regulations, we assume that LEAs need to obtain 
consent 1.2 times per year for each eligible student for a total of 
1,573,920 to 2,360,880 consent requests per year. If we assume that the 
consent forms are no more than 4 pages long and that it takes 
approximately 5-10 minutes to draft and print these forms for each 
consent request (forms must be tailored to the specific services and 
duration of services as specified in the child's IEP), we estimate that 
the cost of complying with the current regulations is

[[Page 10535]]

$4,363,693 to $12,618,904 annually based on the national average hourly 
compensation of $30.87. This estimate is based on the median hourly 
wage for an insurance claims and policy processing clerk of $20.19, as 
reported in the National Compensation Survey, December 2009-January 
2011 (www.bls.gov/ncs/ocs/sp/nctb1479.pdf), and the average cost to 
employers for benefits to State and local government employees of 34.6 
percent of total hourly compensation (Table A, www.bls.gov/news.release/ecec.nr0.htm).
    In most cases (50-75 percent), we assume that although not required 
in the regulations, public agencies seek to obtain parental consent 
during a child's IEP Team meeting (either at the annual meeting or 
following a change in the IEP). We assume that IEP Team meetings 
typically include four participants (the child's special education 
teacher or, where appropriate, related services provider; the child's 
regular education teacher; a public agency representative; and one 
parent). Assuming it takes an average of three minutes to obtain a 
response regarding parental consent, the additional estimated cost 
under the current regulations of obtaining a response during an IEP 
Team meeting would be $7,754,310 to $17,447,198 annually, based on the 
average hourly compensation of the participating teachers and school or 
public agency representative of between $59.82 and $69.95 and the 
opportunity cost to the parent, which was calculated using the Federal 
minimum wage. The median wages of participants, excluding the parent, 
were obtained from the National Compensation Survey, December 2009-
January 2011 (www.bls.gov/ncs/ocs/sp/nctb1479.pdf) and 34.6 percent of 
total hourly compensation was used as the average cost to employers for 
benefits to State and local government employees (Table A, www.bls.gov/news.release/ecec.nr0.htm)
    In the 25 to 50 percent of cases where a response is not obtained 
during an IEP Team meeting (or the agency and parents agree to make a 
change in the IEP without convening an IEP Team meeting as permitted 
under the Act and regulations), we assume that public agencies mail 
forms directly to parents to be completed and returned and incur 
additional administrative, postage, and material costs. Of the parents 
who receive consent forms sent via mail, we estimate that only 30-50 
percent of those recipients will respond to any particular letter 
request, with a maximum of 3 letters sent to any particular parent for 
a total of 688,590 to 2,585,164 letters sent. We estimate that the cost 
of mailing consent forms includes $0.45 for postage, $0.10 for an 
envelope, and $0.20 to duplicate or print each 4-page form. Each 
consent form returned by parents requires return postage of $0.45 and 
$0.10 for an envelope. We estimate these combined postage and materials 
costs are $627,109 to $2,129,337.\2\ If, based on the national average 
hourly compensation for a secretary or administrative assistant of 
$27.14, it takes approximately 10-15 minutes of administrative time for 
each letter sent to track the addresses of parents who have not 
provided a response, mail forms to parents, and process responses, and 
if, based on the Federal minimum wage, it takes an additional 5 minutes 
for the opportunity cost to parents to respond to a consent request, we 
estimate that the additional cost of time spent by public agencies and 
parents is $3,322,734 to $18,008,896. The estimated cost of 
administrative time was based on the median hourly wage of a secretary 
or administrative assistant of $17.75, as reported in the, National 
Compensation Survey, December 2009-January 2011 (www.bls.gov/ncs/ocs/sp/nctb1479.pdf), and 34.6 percent of total hourly compensation was 
used as the average cost to employers for benefits to State and local 
government employees (Table A, www.bls.gov/news.release/ecec.nr0.htm). 
Based on these estimates, eliminating the parental consent requirement 
in current Sec.  300.154(d)(2)(iv)(A) will result in gross savings of 
$16,067,846 to $50,204,335 annually.
---------------------------------------------------------------------------

    \2\ Amounts shown are the additional postage and material costs 
of sending forms via mail; the cost of the first form copy is not 
included.
---------------------------------------------------------------------------

Costs of Additional Requirements

    The final regulations in Sec.  300.154(d)(2)(iv) permit public 
agencies to access a child's or parent's public benefits or insurance 
if the public agency obtains written, parental consent and provides 
written notification to the child's parents prior to accessing the 
child's or parents' public benefits or insurance for the first time and 
provides written notification to parents annually thereafter to inform 
them of their rights and protections under the Act. The written consent 
must (a) meet the requirements of 34 CFR 99.30 and Sec.  300.622; and 
(b) specify that the parent understands and agrees that the public 
agency may access the parent's or child's public benefits or insurance 
to pay for services under part 300.
    We believe that initially there would be no additional cost to 
comply with the revised consent requirements in the final regulations 
for students already enrolled in Medicaid and for whom parents have 
already provided consent under 34 CFR 99.30 and Sec.  300.622 and that 
consent meets the requirements of current Sec.  300.154(d)(2)(iv)(A). 
However, at the time this consent is no longer valid because of a 
change in the type amount or cost of services, the public agency must 
obtain parental consent to seek further access to the child's or 
parent's public benefits or insurance to provide or pay for services 
under part 300. This consent must specify that the parent understands 
and agrees that the public agency may access the child's or parent's 
public benefits or insurance to pay for services under part 300. We 
estimate that the costs of obtaining written consent will be the same 
costs incurred under current IDEA requirements for obtaining consent 
each time the public agency seeks to access a public benefits or public 
insurance program.
    Of the 1,311,600 to 1,967,400 children we estimate to be enrolled 
in Medicaid, we do not know how many in any one year are children for 
whom the public agency is seeking to access a public benefits or 
insurance program for the first time. However, we estimate for purposes 
of these final regulations that there are roughly 100,237 to 150,355 
such children,\3\ leaving a total of 1,211,363 to 1,817,045 children 
for whom the agency would be required to obtain a one-time consent when 
there is a change in services. We estimate that the cost of obtaining 
this one-time consent under the final regulations would be $12,366,571 
to $38,639,632. This assumes that LEAs would incur costs in obtaining 
the required consent in IEP Team meetings and in mailing the consent 
forms to parents from whom they were not able to obtain consent in such 
meetings.
---------------------------------------------------------------------------

    \3\ Our estimate of the number of children for whom the agency 
would be seeking to access public benefits or insurance for the 
first time is based on an estimate of the number of newly identified 
children under IDEA using IDEA child count data for the period 2004-
2010.
---------------------------------------------------------------------------

    For the remaining children for whom the public agency is seeking to 
access public benefits or insurance for the first time, there would be 
a minimal cost associated with obtaining the consent required under new 
Sec.  300.154(d)(2)(iv)(B) because LEAs could meet this requirement by 
presenting parents with a modified FERPA and IDEA consent form (which 
they should already have in place for the release of the child's 
personally

[[Page 10536]]

identifiable information to the public benefits or insurance program 
for billing purposes), or by presenting parents with a separate consent 
form that meets the requirements in new Sec.  300.154(d)(2)(iv)(B) at 
the same time the agency is seeking the consent required under 34 CFR 
part 99 and Sec.  300.622.
    Although the specific format and content may vary by State, we 
estimate that it will take no more than 10 hours per State to draft a 
consent form that complies with these requirements. Although the 
parental consent requirement generally rests with LEAs, we assume 
States will choose to create a standard consent form in order to 
increase efficiency and address any applicable State laws. We estimate 
that the cost per State of drafting this document will be no more than 
$590, for a national cost of approximately $35,000 based on the 
national average hourly compensation for lawyers employed by State or 
local governments of $38.46, as reported in the National Compensation 
Survey, December 2009-January 2011 (http://www.bls.gov/ncs/ocs/sp/nctb1479.pdf), and the average cost to employers for benefits to State 
and local government employees of 34.6 percent of total hourly 
compensation (Table A, www.bls.gov/news.release/ecec.nr0.htm).
    We further estimate that it would take approximately 30 minutes for 
an administrative assistant in each of the 16,330 LEAs to obtain and 
modify the State's model form for use in that LEA. The total cost of 
preparing new FERPA and IDEA consent forms would therefore be $222,000, 
based on the national average hourly compensation of $27.14. The 
estimated cost of compensation was based on the median hourly wage of a 
secretary or administrative assistant of $17.75, as reported in the 
National Compensation Survey, December 2009-January 2011 (www.bls.gov/ncs/ocs/sp/nctb1479.pdf), and the average cost to employers for 
benefits to State and local government employees of 34.6 percent of 
total hourly compensation (Table A, www.bls.gov/news.release/ecec.nr0.htm). The number of LEAs is taken from the National Center for 
Education Statistics Schools and Staffing Survey, ``Public School 
District Data File,'' 2007-08.
    The total cost of drafting FERPA and IDEA consent forms, including 
drafting the State model form and customizing it for use in each LEA, 
will be at most a one-time cost of an estimated $257,000.
    Final Sec.  300.154(d)(2)(v) specifies that written notifications 
to the child's parents consistent with Sec.  300.503(c) include (a) A 
statement of the parental consent provisions in Sec.  
300.154(d)(2)(iv)(A)-(B); (b) a statement of the ``no cost'' provisions 
in Sec.  300.154(d)(2)(i)-(d)(2)(iii); (c) a statement that the parents 
have the right under 34 CFR part 99 and part 300 to withdraw at any 
time their consent to disclosure of their child's personally 
identifiable information; and (d) a statement that the withdrawal of 
consent or refusal to provide consent under 34 CFR part 99 and part 300 
to disclose personally identifiable information does not relieve the 
public agency of its responsibility to ensure that all required 
services are provided at no cost to the parents.
    We do not expect the requirement for written notification to result 
in significant costs. While the written notification must be provided 
to the child's parents before the public agency may access the child's 
or parent's public benefits or insurance for the first time to pay for 
services under Part 300 and annually thereafter, the timing of the 
written notification is otherwise left to the discretion of public 
agencies. In many instances, public agencies will have an opportunity 
to provide this written notification, either by mail or in person, in 
conjunction with other required documentation or activities and will 
incur only the additional cost of photocopying the written 
notification.
    Although the specific format and content may vary by State, we 
estimate that it will take no more than 10 hours per State to draft a 
written document that complies with these requirements and that the 
document will not exceed 4 pages in length. Although the written 
notification requirement generally rests with LEAs, we assume States 
will choose to create a standard notification in order to increase 
efficiency and address any applicable State laws. We estimate that the 
cost per State of drafting this document will be no more than $590, for 
a national cost of approximately $35,000 based on the national average 
hourly compensation for lawyers employed by State or local governments 
of $38.46, as reported in the National Compensation Survey, December 
2009-January 2011 (http://www.bls.gov/ncs/ocs/sp/nctb1479.pdf), and the 
average cost to employers for benefits to State and local government 
employees of 34.6 percent of total hourly compensation (Table A, 
www.bls.gov/news.release/ecec.nr0.htm).
    Assuming all 16,330 LEAs need to prepare written notifications and 
that it would take approximately 30 minutes for an administrative 
assistant to obtain and modify the State's standard notification for 
use in that LEA, the total cost of preparing written notifications will 
be $222,000, based on the national average hourly compensation of 
$27.14. The estimated cost of compensation was based on the median 
hourly wage of a secretary or administrative assistant of $17.75, as 
reported in the, National Compensation Survey, December 2009-January 
2011 (www.bls.gov/ncs/ocs/sp/nctb1479.pdf), and the average cost to 
employers for benefits to State and local government employees of 34.6 
percent of total hourly compensation (Table A, www.bls.gov/news.release/ecec.nr0.htm). The number of LEAs is taken from the 
National Center for Education Statistics Schools and Staffing Survey, 
``Public School District Data File,'' 2007-08. If the written 
notification is assumed to be no more than 4 pages long, then the cost 
of photocopying this document for the estimated 1,311,600 to 1,967,400 
children who participate in both Part B and a public benefits or 
insurance program will be approximately $263,000 to $394,000 annually.
    In some instances, public agencies will be unable to provide the 
written notification in conjunction with other mailings or in person 
and will need to provide that written notification by mail separately. 
We assume that sending written notifications by mail separately will be 
necessary for one-half of the eligible children and that the cost of 
each written notification would be $0.55.\4\ The resulting additional 
cost of mailing these notifications will be an estimated $361,000 to 
$541,000. The total cost of the written annual notification 
requirement, including drafting the State model notification, 
customizing it for use in each LEA, and either copying it for 
distribution at the IEP Team meeting or mailing it to parents, will be 
an estimated $881,000 to $1,192,000 in the first year and $624,000 to 
$935,000 annually thereafter.
---------------------------------------------------------------------------

    \4\ The additional cost of mailing a notification includes $0.45 
in postage, and $0.10 for an envelope.
---------------------------------------------------------------------------

    After accounting for additional parental consent and written 
notification costs resulting from the final regulations, the net 
savings will be $2,563,275 to $10,115,702 in the first year and 
$15,443,846 to $49,269,335 annually thereafter, assuming the costs 
associated with obtaining parental consent for children for whom the 
agency is already accessing public benefits or insurance occur in year 
one.

[[Page 10537]]

Paperwork Reduction Act of 1995

    The Paperwork Reduction Act of 1995 does not require you to respond 
to a collection of information unless it displays a valid OMB control 
number. We display the valid OMB control numbers assigned to the 
collection of information in these final regulations at the end of the 
affected section of the regulations.
    These final regulations include one information collection 
requirement associated with the following provisions: Sec.  
300.154(d)(2)(iv)-(v).
    A description of these provisions is given below with an estimate 
of the annual recordkeeping burden. Included in the estimate is the 
time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
each collection of information.
    Collection of Information: State and Local Educational Agency 
Record Keeping, Notification, and Reporting Requirements under Part B 
of the Individuals with Disabilities Education Act (Information 
Collection 1820-0600). The affected section of the regulations for this 
information collection is final Sec.  300.154(d)(2)(iv)-(v). The Act 
requires SEAs and LEAs to gather, maintain, report, and disclose 
various information and data, but the Act does not require this 
information and data to be submitted to the Department.
    The final regulations in Sec.  300.154(d)(2)(iv)-(v) permit public 
agencies to access a child's or parent's public benefits or insurance 
if the public agency provides written notification to the child's 
parents of their protections under the Act, obtains written consent 
prior to accessing the child's or parents' public benefits or insurance 
for the first time, and provides annual written notification to parents 
thereafter.
    Each LEA must obtain written parental consent after providing the 
written notification to parents. Assuming that each SEA will develop a 
model consent form that its LEAs can use, and that it will take an 
average of about 10 hours to draft the consent form for each of the 60 
grantees funded under Part B of IDEA, we estimate a total burden of 600 
hours for SEAs to develop a model consent form.
    We further estimate that as an uppermost bound it will take an 
additional 8,165 hours for LEA staff to obtain and modify an existing 
model consent form, based on not more than 30 minutes for each of the 
16,330 LEAs. However, we would expect that most LEAs will simply use 
the model consent form provided by their SEA. Therefore, we estimate 
the burden for the first year of implementation of this consent 
requirement to be not more than 8,765 hours.
    Additionally, each LEA must provide a written notification to 
parents prior to accessing a child's or parents' public benefits or 
insurance for the first time and annually thereafter. Assuming that 
each SEA will develop a model written notification that its LEAs can 
use and assuming that it will take an average of about 10 hours to 
draft the written document for each of the 60 grantees funded under 
Part B of IDEA, we estimate a total burden of 600 hours for SEAs to 
develop a model notification.
    We further estimate that as an uppermost bound it will take an 
additional 8,165 hours for LEA staff to obtain and modify an existing 
model notification, based on not more than 30 minutes for each of the 
16,330 LEAs. However, we would expect that most LEAs will simply use 
the model notification provided by their SEA. Therefore, we estimate 
the burden for the first year of implementation of this notification 
requirement to be not more than 8,765 hours.
    With the addition of the burden to SEAs and LEAs associated with 
final Sec.  300.154(d)(2)(iv)-(v), the total annual record keeping and 
notification burden for this collection of information is estimated to 
be approximately 490,181 hours for the 104,349 separate responses from 
SEAs and LEAs.

Intergovernmental Review

    This program is subject to Executive Order 12372 and the 
regulations in 34 CFR part 79. One of the objectives of the Executive 
order is to foster an intergovernmental partnership and a strengthened 
federalism. The Executive order relies on processes developed by State 
and local governments for coordination and review of proposed Federal 
financial assistance.
    This document provides early notification of our specific plans and 
actions for this program.

Assessment of Educational Impact

    In the NPRM we requested comments on whether the proposed 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    Based on the response to the NPRM and on our review, we have 
determined that these final regulations do not require transmission of 
information that any other agency or authority of the United States 
gathers or makes available.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the program contact person 
listed under FOR FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. Free 
Internet access to the official edition of the Federal Register and the 
Code of Federal Regulations is available via the Federal Digital System 
at: www.gpo.gov/fdsys. At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
Register, in text or Adobe Portable Document Format (PDF). To use PDF 
you must have Adobe Acrobat Reader, which is available free at the 
site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.
    You may also view this document in text [or PDF] at the following 
site: idea.ed.gov.

(Catalog of Federal Domestic Assistance Number 84.181)

List of Subjects in 34 CFR Part 300

    Administrative practice and procedure, Education of individuals 
with disabilities, Elementary and secondary education, Grant programs--
education, Privacy, Private schools, Reporting and recordkeeping 
requirements.

    Dated: February 8, 2013.
Arne Duncan,
Secretary of Education.
    For the reasons discussed in the preamble, the Secretary amends 34 
CFR chapter III as follows:

PART 300--ASSISTANCE TO STATES FOR THE EDUCATION OF CHILDREN WITH 
DISABILITIES

0
1. The authority citation for part 300 continues to read as follows:

     Authority:  20 U.S.C. 1221e-3, 1406, 1411-1419, unless 
otherwise noted.
0
2. Section 300.154 is amended by:
0
a. Revising paragraph (d)(2)(iv).
0
b. Adding new paragraph (d)(2)(v).
    The revision and addition read as follows:

Sec.  300.154  Methods of ensuring services.

* * * * *
    (d) * * *

[[Page 10538]]

    (2) * * *
    (iv) Prior to accessing a child's or parent's public benefits or 
insurance for the first time, and after providing notification to the 
child's parents consistent with paragraph (d)(2)(v) of this section, 
must obtain written, parental consent that--
    (A) Meets the requirements of Sec.  99.30 of this title and Sec.  
300.622, which consent must specify the personally identifiable 
information that may be disclosed (e.g., records or information about 
the services that may be provided to a particular child), the purpose 
of the disclosure (e.g., billing for services under part 300), and the 
agency to which the disclosure may be made (e.g., the State's public 
benefits or insurance program (e.g., Medicaid)); and
    (B) Specifies that the parent understands and agrees that the 
public agency may access the parent's or child's public benefits or 
insurance to pay for services under part 300.
    (v) Prior to accessing a child's or parent's public benefits or 
insurance for the first time, and annually thereafter, must provide 
written notification, consistent with Sec.  300.503(c), to the child's 
parents, that includes--
    (A) A statement of the parental consent provisions in paragraphs 
(d)(2)(iv)(A) and (B) of this section;
    (B) A statement of the ``no cost'' provisions in paragraphs 
(d)(2)(i) through (iii) of this section;
    (C) A statement that the parents have the right under 34 CFR part 
99 and part 300 to withdraw their consent to disclosure of their 
child's personally identifiable information to the agency responsible 
for the administration of the State's public benefits or insurance 
program (e.g., Medicaid) at any time; and
    (D) A statement that the withdrawal of consent or refusal to 
provide consent under 34 CFR part 99 and part 300 to disclose 
personally identifiable information to the agency responsible for the 
administration of the State's public benefits or insurance program 
(e.g., Medicaid) does not relieve the public agency of its 
responsibility to ensure that all required services are provided at no 
cost to the parents.
* * * * *
[FR Doc. 2013-03443 Filed 2-13-13; 8:45 am]
BILLING CODE 4000-01-P
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