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As of 2021, all 50 states have seized the opportunity to offset the costs they incur for providing healthcare services in schools through their school-based Medicaid (SBM) state plan amendment (SPA).¹Â States can claim federal financial participation (FFP) for both direct provision of certain Medicaid-covered medical services and certain administrative activities that support the program.

Schools are already required to provide these services under federal and state laws, such as the Individuals with Disabilities Education Act (IDEA). Although the specific sets of claimable services vary according to each state plan, they typically include services pursuant to an Individual Education Program (IEP), and often include speech language pathology (speed therapy), occupational therapy, physical therapy, nursing, and behavioral health (mental health and substance abuse) services.

Though the public health emergency has produced new funding sources and government programs, those funds will eventually sunset and return states to tighter budgets. Before 2020, SBM was the third largest funding source for schools behind IDEA and Title I. With still untapped opportunities, at an estimated $4.5 billion each year, SBM is a reliable source of revenue that will carry on after the COVID-19 pandemic crisis and related funding have both passed.

In this issue brief, learn more about school-based Medicaid revenue and compliance opportunities, challenges, and potential strategies to address those challenges.