Documentation of Medically Necessary Services


School providers must document the delivery of Medicaid services as part of the reimbursement process. Just as any medical or behavioral health provider might do when billing their time to a health plan, they must note what services were delivered, the duration of the services, and any notes as part of the health record.

But for the purposes of Medicaid, school providers also must document that the services meet the state’s definition of “medically necessary.”

It is commonly understood that Medicaid will reimburse for services that are outlined in a student’s IEP. These services are legally required to be provided to the student under the Individuals with Disabilities in Education Act (IDEA).

However, services in the IEP are not automatically considered medically necessary by Medicaid, and the IEP itself may not be considered sufficient to establish medical necessity for the purposes of Medicaid reimbursement. It may be necessary, therefore, to include additional medical documentation of medical necessity according to the state’s rules.

This can be confusing for providers. To ensure appropriate compliance, clear guidance from the state is needed on: the documentation required for medical necessity; who  Medicaid recognizes as qualified to establish medical necessity; and the appropriate processes to collect this documentation.

Massachusetts recently revised many of its provider manuals and other documents to clearly describe this process. For example, the MassHealth School-Based Medicaid Program published a list of the top 5 things providers need to know for the 2020-2021 school year that includes clear language about medical necessity, service documents, diagnosis and more.