Guess which agency may be forgoing millions in fed dollars?

One article that recently appeared in the Star-Advertiser was titled, “State forgoing millions in federal reimbursements.” The state agency referred to in that article was our Department of Education.

We have children from indigent families in our school system. Some of them, especially in special education, can and do benefit when they receive services from health professionals. When that happens, the school can bill Medicaid for those services.


According to the article, many states have done this. In 2016, according to federal data, the average reimbursement that Medicaid sends to states was about $48 million. The federal data says Hawaii got around $0.26 million, but the DOE says the total is closer to $0.5 million. Which is 1 percent of what the average state receives.

As an example, one clinical psychologist’s report on the DOE system in 2006 noted that all students on Medicaid “are entitled to EPSDT (Early, Periodic Screening, Diagnosis and Treatment), a benefit that includes both a health screen and a mental health (social-emotional-behavioral) screen periodically between the ages of 0-21. This can be done in physicians’ offices, or in some states, it can also be done by public health nurses, even within the school setting.” Catching psychological problems early in our student base is, of course, important so that they don’t later become complicated and costly, and if we can get Uncle Sam to pay for such services, so much the better for us locally.

When questioned, a DOE spokeswoman quoted in the article said that the department is “aggressively going to seek reimbursement for every service and every eligible child that we’re able to. We are committed to doing that.”

But will they?

It’s a lot of work going after Medicaid reimbursements. The services for which Medicaid is billed need to be deemed medically and educationally necessary, they need to be performed by a licensed provider, and they need to be properly documented. It’s hard for doctors and their own medical staffs to keep track of all this, and there are even specialized shops who claim to be proficient in medical coding, which is the way the medical professionals are supposed to tell the federal government what was done, why, and how much it cost. How do we expect schools, which aren’t in the medical business, to wade through all that federal government red tape? Obviously, this is a nut that the typical school with typical educators is not going to be able to crack easily.

Besides, under federal law, the Legislature is supposed to be adequately funding special education, period, so it’s irrelevant whether the DOE seeks out federal dollars. It is very tempting for a DOE administrator to think, “There’s no benefit for us if we do all this work because the Legislature needs to fund us anyway. The only thing we can expect the Legislature to do if we get this money, is to reduce our general fund appropriation. Who needs that?”

Providing appropriate medical services isn’t within the expertise of a typical school, but these days we require our schools to go beyond simple education, especially in the special education realm. Because the DOE must, and does, provide these services, the DOE should have infrastructure to take advantage of federal benefits to pay for them.


That would be helpful for us taxpayers, who are supposed to be for whom the DOE is really working. Let’s make sure they keep their word and go after whatever available monies there are.

Tom Yamachika is the president of the Tax Foundation of Hawaii.

  1. Bob Bundy October 8, 2018 12:41 pm

    Mr. Yamachika, you make several good points in your article about a School Medicaid program. There are some interesting points about School Medicaid that may interest you and your readers.

    – Thousands of school districts nationwide participate in School Medicaid in order to receive reimbursement for providing services.

    – Currently, Wyoming is the only state without a school Medicaid program.
    – A School Medicaid billing program is a lot of work – but it’s not as difficult as it might seem for many different reasons. If it was a nightmare of a program, so many school districts nationwide would stop participating
    – Yes, the federal and state governments need to fund special education services. And, for the most part, school Medicaid revenue reimburses school districts for providing medical services to student receiving special education services. And, while it is true that Medicaid is a federal program, most states DO NOT require that school districts use their Medicaid reimbursement to provide special education services. Most states allow reimbursement revenue from School Medicaid to flow to the district’s general fund and be spent any way the school district chooses. There are some states (Colorado comes to mind) which mandate that School Medicaid dollars go back to special education and/or student health programs – but most states do not have this requirement (I’m not sure about Hawaii)

    I will also mention that there is a national School Medicaid association (National Alliance for Medicaid in Education). They have hundreds of members nationwide – including members from Hawaii. I often speak at the national conference and also conduct monthly School Medicaid webinars and have had participants from the Hawaii DOE in attendance. So I know that it is a topic of interest from the Hawaii DOE.

    One last point – it is really not possible to compare apples-to-apples in looking at state School Medicaid programs. While the “average” state program might return $48mm, as of 2015 (the last full year for which I have School Medicaid dollars), only 14 states returned $48mm or more. It is generally more tied to a combination of the total number of special education students in a state, the services covered under the state plan, the reimbursement for each service (which varies widely by state), and the diligence the school districts in the states apply to going after every dollar for every reimbursable service. It could be that the Hawaii DOE could receive more than $0.5mm with more focus on their School Medicaid program, but given the number of students receiving special education services in Hawaii, it would be highly unlikely that the total reimbursement would ever come close to $48mm.

    Thank you!

    Bob Bundy
    President, Rokay Services Group, LLC

  2. Pest Outwest October 14, 2018 7:36 pm

    Maynard G. Krebs must have been from Hawaii — work?!?? Okay, I’m dating myself, look it up.

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