Most school districts have gotten used to shrinking or stagnating funding streams in recent years, but there’s at least one pot of money that’s defied that trend. Administrators across Colorado are quick to call it “amazing,” “unbelievable” and “wonderful.”

<em>                 Photo credit: Queen’s University</em>

It comes in the form of Medicaid reimbursements for therapy or personal care services provided to low-income special education students by their school districts. Regardless of whether districts choose to participate in the Medicaid reimbursement program, federal law requires them to find the money to provide special education services. Thus, districts that join the Medicaid program are able to recoup some of the money that they would have spent anyway.

The payments, which can total millions in the biggest districts, must be used for health-related expenses by law. While special education equipment or staffing certainly qualify, increasingly school districts are using the money for health and wellness efforts that touch all students.

This may mean suicide prevention curriculum, anti-bullying programs, more mental health personnel, or efforts to curb obesity. It can also take the form of health and wellness coordinators tasked with leading health policy discussions at the district level and establishing school wellness teams and initiatives. Many districts also use a portion of the money to reach out to families who don’t have health insurance, in an effort to connect them to Medicaid, CHP+ or some other form of coverage.

Cassandra Reese, the Medicaid coordinator and a school nurse in Academy District 20, said in the next couple years, “I’m hoping to see more wellness…It’s still in the toddler stages.”

She said the district has taken some small steps in that area using Medicaid funds, including handing out magnets with healthy snack suggestions to all elementary families.

Academy District 20 gave this magnet, paid for with Medicaid reimbursements, out to all elementary families.

In Adams 12 Five Star, which expects to receive about $1.2 million in reimbursements this year, there’s been a shift toward overall wellness efforts in the last couple years, according to those who run the program. In fact, earlier this month, the district filled a brand new position: Manager of Coordinated School Health.

Expanding and sustaining health efforts

Administrators in Adams 12 were chagrined when the annual KIDS COUNT in Colorado! report came out last spring. The county had fallen from 23rd to 24th in a ranking of the state’s 25 most populous counties on child well-being.

While that grim statistic helped create the momentum for a more coordinated approach to school health and the creation of the new manager position, Medicaid money gave them a way to pay for it.

As in all districts that participate, Adams 12 Five Star divvies up the money based on a five-year “Local Services Plan” created by district and community stakeholders. Among other things, the reimbursements pay for suicide prevention training, more nursing hours, outreach to uninsured students and help for students who need food, clothes or specialty items like glasses.

The reimbursements also help leverage money from community partners, demonstrating the district has skin in the game so to speak. For example, the district funds school-based mental health therapists partially with Medicaid money and partially with funds from a community mental health center.

“We’re all in it together,” said Sandra Sellstrom, coordinator of the district’s Medicaid School Health Services Program.

Denver Public Schools, which joined the reimbursement program when it started in Colorado in 1997, receives the largest reimbursement in the state: about $2.5 million last year. The district spends that money on a variety of things, including its four-member “Healthy Schools” team, which oversees district health policy, promotes use of school-based health clinics and works with individual schools on health and wellness efforts.

The district also uses a portion of the reimbursement money to advance the goals in its five-year plan of health priorities, called “DPS Health Agenda 2015” For example, to help meet one of its social-emotional health goals, the district spent nearly $18,000 last year on suicide prevention curriculum for sixth- and ninth-graders as well as staff training on the topic. Now, 22 of the district’s school psychologists and social workers are certified as suicide prevention specialists, up from one previously.

Although the district has raised $18 million to implement its Health Agenda through grants, donations and other sources, administrators say Medicaid reimbursement represents an integral funding stream, especially because it isn’t a one-time sum like some other sources.

“It’s been a very consistent and growing source of revenue for districts,” said Bridget Beatty, DPS Coordinator for Health Strategies. “It is one of the only sources that has been increasing in the last few years.”

Who’s in and who’s out

All told, 50 Colorado districts or Boards of Cooperative Educational Services, known as BOCES, are currently participating in the Medicaid School Health Services Program, which is administered jointly by the Colorado Department of Education and the Colorado Department of Health Care Policy and Financing. Reimbursements for participating districts totaled $16.6 million in 2011-12, the most recent year for which figures are available.

In general, participants include large and medium districts along the I-25 corridor, but there are a number of small, rural districts that participate as well. In addition, participants such as Pikes Peak BOCES serve more than a dozen small districts.

It used to be that almost 80 percent of the state’s 178 school districts participated in the program either individually or through a BOCES. But rule changes in 2008 changed how reimbursements were calculated, moving from a fee-for-service model to a cost-based model. The new rules, which required much more documentation, also eliminated reimbursements for non-special education services, such as bandaging a Medicaid-eligible child’s scraped knee in the nurse’s office.

The new focus was exclusively on special education services. For many small districts, particularly those that used BOCES staff not district staff to provide special education therapies, that meant fewer opportunities for reimbursement, said Jill Mathews, senior consultant for the Medicaid School Health Services Program at the Colorado Department of Education. As a result, many districts dropped out. The number of districts and BOCES participating fell from 114 in the 2006-07 year to 54 five years later.

“It’s not always worth it for the smaller districts to participate,” said Matthews.

Despite the drop in participation after 2008, she noted that the 50 current participants serve about three-quarters of the state’s schoolchildren. This year, there will be a push to attract more BOCES participants.

New rules beneficial

Although dozens of districts dropped out after the 2008 rule changes, those that stayed laud the new cost-based methodology, saying it helped produce major increases in their annual reimbursements. For example, Adams 12 Five Star has seen its Medicaid revenue double over the last five years. The reimbursements under the fee-for-service model were very low, said Sellstrom.

“It wasn’t even comparable to actual costs,” she said. “Before, you did what you could, but it was smaller in scope.”

Reese, from Academy 20, said the district’s reimbursement has increased six-fold since the district joined the program in 1997, jumping from about $97,000 to nearly $600,000 last year.

“It’s so exciting,” she said. “It’s money well worth looking into.”

Buena Vista, a district of 994 students west of Colorado Springs, rejoined the program last year after dropping out in 2010 because the program wasn’t yielding any reimbursements. In fact, the district had to pay money back at one point, said Stefani Franklin, principal of Avery-Parsons Elementary school and the district’s special education director.

After Mathews and another state administrator provided a detailed review of the new system, the district rejoined the program. Last year, the district got $40,000 in reimbursements, enough funding for a full-time nurse to cover two of the district’s four schools. Previously, one nurse was responsible for the district’s entire student body.

Franklin said of the second nurse, “One person seeing 400-450 kids. That’s a pretty important position. Every little bit helps.”