Free Care Policy

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In 2014, the Centers for Medicare and Medicaid Services (CMS) issued a state Medicaid director letter reversing the free care policy. This change permits states more flexibility in their school-based Medicaid programs by allowing school districts to bill Medicaid for health services delivered to all Medicaid-enrolled children, not just those with a special education plan documented by an Individualized Education Program (IEP). Increasingly, states and school districts are seizing this new opportunity in Medicaid to expand access to and resources for school health services, which in many states entails changes to their state Medicaid plans and state guidance. States are increasingly pursuing these changes, recognizing the growing need to provide health services and supports to children where they spend the majority of their time: in school. 

For updates on state activity, please refer to the following brief: State Efforts to Implement the Free Care Policy Reversal

Featured Resources

resources Schools Are Key to Improving Children’s Health: How Illinois Can Leverage Medicaid Funds to Expand School Health Services

Key opportunities exist for education, healthcare and public health sectors to improve both health and education outcomes by focusing on school-based health services. This brief addresses the opportunity in Illinois to expand on Medicaid-funded health services delivered within a school by school nurses and other district-employed providers.

resources School Medicaid Expansion: How (and How Many) States Have Taken Action to Increase School Health Access and Funding

As of October 2023, Healthy Schools Campaign has identified 25 states that have expanded their school Medicaid program to cover services outside of an IEP/IFSP using the “free care” policy reversal.

This brief provides a summary of the actions each state took, along with related state documents and other resources that may be helpful to states working to increase access to and funding for physical, behavioral and mental school-based health services.

resources School Medicaid Guidance: What Advocates and State Policymakers Need to Know

In May 2023, the Centers for Medicare and Medicaid Services released new school Medicaid guidance affirming that states have flexibility in their school-based Medicaid program to allow school districts to bill Medicaid for health services delivered to all Medicaid-enrolled children.

This brief answers key questions about the guidance and highlights what policymakers and advocates need to know — and how to get involved — to ensure states are best positioned to leverage federal opportunities increasing children's access to the services they need.