USDHHS Withdraws Guidance on Free Care Policy

USDHHS Center for Medicare & Medicaid Services recently withdrew its prior guidance on the “free care” policy as expressed in the School-Based Administrative Claiming Guide.  Under CMS’s new guidance, Medicaid reimbursement is available for covered services under the approved state plan regardless of whether there is any charge for the services to the beneficiary or the community at large.  Also under CMS’s new guidance, schools are not considered to be legally liable third parties to the extent schools act to ensure that students receive needed medical services to access a free appropriate public education consistent with federal law.  The guidance also states that even if a state determines that schools are legally liable third parties, the Medicare statute contains an exception which requires that Medicaid serve as the primary payer to schools and providers of services in an IEP under IDEA; noting that nothing in IDEA permits states to reduce medical or other assistance available.