Schools offer an invaluable opportunity for providers of mental health services to meet young people where they are — approximately 49.4 million young people were enrolled in public school in fall 2021 and seven of 10 public schools report that the number of students seeking mental health services has increased since 2020. But to address students’ needs, our schools require comprehensive mental health programs, qualified staff, and adequate funding.
Medicaid and the Children’s Health Insurance Program (CHIP) insure more than 41 million children in the United States, providing them with necessary physical and behavioral health services. With a streamlined program that is not prohibitively burdensome to administer, Medicaid could provide a sustainable funding source for schools to build comprehensive mental health programs.
School-based mental health programs can provide a supportive environment that recognizes and responds to the needs of young people. These programs are designed to be comprehensive, inclusive, and accessible, and offer a range of services interwoven throughout the school community. School-based mental health programming can:
- provide direct services to students, like counseling and crisis intervention
- offer preventive programming, including social-emotional learning curricula, mindfulness training, and stress-management workshops
- help train staff to recognize signs of mental health issues
- prioritize family engagement that involves and educates parents and caregivers
- collaborate with community-based mental health providers when young people require specialized services.
To support school-based mental health programs, schools must creatively braid funding from federal, state, and local sources; insurance payments; grants; and partnerships with mental health clinics. According to the School Superintendents Association (AASA), Medicaid pays about $4 billion a year in school-based services. This is an essential funding source for public schools, but reimbursement is complicated and administratively burdensome, particularly for small and rural districts, and in some cases, districts do not seek reimbursement because of this burden.
To leverage Medicaid reimbursement and increase access to services, some states have enhanced their Medicaid school-based program. For example:
- California, Illinois, and Louisiana have expanded their school-based Medicaid programs to cover a broad range of mental health services, including all medically necessary services under Early and Periodic Screening, Diagnostic and Treatment (EPSDT).
- Massachusetts covers a defined package of physical and behavioral health services.
How Recent Changes to the School-Based Medicaid Program Are Altering the Landscape
On June 25, 2022, President Biden signed into law the Bipartisan Safer Communities Act, which required the Centers for Medicare and Medicaid Services (CMS) to provide additional guidance to states on Medicaid school-based services. The guidance aims to: increase access to Medicaid-funded, school-based health services (SBS), including mental health services; reduce administrative burden; support federal compliance with billing and payment; and set up a technical assistance center to support the administration of school-based Medicaid.
In compliance with this legislation, CMS issued a comprehensive guide on Medicaid school-based services in May 2023, meant to clarify aspects of the program and encourage states to expand SBS beyond individualized education program (IEP) services. Shortly after, CMS launched the Medicaid and School Based Services Technical Assistance Center. Both are steps in the right direction to expanding funding, but states and districts still face challenges.
Obstacles to Using School-Based Medicaid
While there are opportunities for leveraging Medicaid for SBS, barriers remain that deter states from expanding their programs and some school districts from participating at all. These include:
- An enormous amount of administrative oversight. The burden can be too much for small or rural school districts, making them unwilling to use Medicaid funding. A survey by AASA found that 20 percent of rural districts do not claim for Medicaid services.
- Billing and reimbursement methodologies are complicated. School districts — both large, urban districts and small, rural ones — have limited staffing resources and limited knowledge to navigate insurance processes.
- Consent-related challenges are widely seen as a barrier to receiving services. The Individuals with Disabilities Education Act (IDEA) and the Family Educational Rights and Privacy Act (FERPA) require parents’ consent for services before they can be delivered and billed, which can impede timely delivery of behavioral health services. The new CMS guidance and proposed regulations reflect an attempt to address the challenges, but there is confusion regarding the interplay of Health Insurance Portability and Accountability Act (HIPAA), FERPA, and parental consent.
- Widespread shortages of community-based behavioral health providers and school-based behavioral health professionals. Seventy percent of public schools say more students are seeking mental health services, but 87 percent of those schools say they can’t meet that need.
Opportunities to Strengthen Youth Mental Health
States and districts have a unique opportunity to increase school-based mental health programming and repair inequities in access and delivery. They can support such efforts in the following ways:
- State education authorities can provide targeted funding and technical assistance to small and rural districts.
- Develop opportunities for state-level collaboration and peer-to-peer learning involving state education authorities, Medicaid authorities, and school districts.
- State education authorities can create meaningful data available to the public. Understanding the impact of school-based behavioral health programs will help address gaps and barriers and can drive future programming.
- Build on interagency agreements required by IDEA between state education authorities and state Medicaid agencies to enhance state collaboration.
- States and districts can draw on CMS’s Medicaid and School Based Services Technical Assistance Center to plan for, implement, and enhance their programs.
For more state examples, historical context, and a detailed exploration of barriers and opportunities, please read our report, Leveraging Medicaid to Enhance School Based Mental Health Services.
