Direct & Administrative Services


School districts, or local educational agencies (LEAs), can bill Medicaid for direct services — eligible health services provided by Medicaid-qualified providers to Medicaid-enrolled students — if the following conditions are met:

  • The child receiving the service is enrolled in Medicaid
  • The services are medically necessary
  • The services are covered in the state Medicaid plan or authorized by the federal Medicaid statute
  • The LEA is authorized by the state as a qualified Medicaid provider

These conditions previously applied only to the services listed in a child’s Individualized Education Program (IEP) or Individualized Family Service Plan (IFSP), but now states have the option to bill for other services that meet this set of criteria.

Schools can also bill for certain administrative services. These are typically either outreach and enrollment services to families and children who are eligible for but not enrolled in Medicaid, or administrative activities that support the provision of Medicaid-eligible services — including care coordination, referrals and transportation for a child to receive a Medicaid-covered service.

Common Examples of Direct Services

  • Physical Therapy
  • Occupational Therapy
  • School Psychology
  • Counseling
  • Screening services
  • Nursing services
  • Services for individuals with speech, hearing and language disorders

Common Examples of Administrative Services

  • Outreach and enrollment
  • Care coordination
  • Coordination of transportation
  • Coordination of referrals

There are some exceptions. Notably, Medicaid does not cover services provided to a Medicaid-enrolled student if another program or entity is responsible for paying for those services (e.g., another health plan, or another federal or state program). This is known as third-party liability, and LEAs must seek reimbursement from other programs or entities before billing Medicaid.

In practice, on any given day, school-based providers manage their caseloads, delivering the services that address their students’ needs and help them learn. While attending to their day-to-day work, providers may not think about whether or not students are enrolled in Medicaid. But in order for the school district to bill Medicaid for those services, it must identify each service delivered to an eligible, Medicaid-enrolled student.