LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6717 NOTE PREPARED: Jan 3, 2024
BILL NUMBER: HB 1389 BILL AMENDED:
SUBJECT: School Based Health Services and Report.
FIRST AUTHOR: Rep. Garcia Wilburn BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
XFEDERAL
Summary of Legislation: Medicaid Services: This bill requires the Office of the Secretary of Family and
Social Services (FSSA) to submit a Medicaid state plan amendment to the United States Department of
Health and Human Services to allow school corporations to seek Medicaid reimbursement for medically
necessary school based Medicaid covered services (program). (Current law allows for the state plan
amendment.) It sets forth requirements of the state plan amendment and program. It also specifies how school
corporations can expend the funds.
Staffing: This bill requires the FSSA and the Department of Education (IDOE) to each employ one employee
for the program and to train school corporations concerning the program.
School Health Provider Study: This bill also requires the IDOE to conduct a study concerning workload
levels for school based health providers who are licensed occupational therapists and licensed physical
therapists. It specifies components to consider in determining a methodology and requirements of the study.
It requires the IDOE to submit a report of the study to the Legislative Council before November 1, 2024, and
to post the report on the IDOE’s website.
Effective Date: Upon passage; July 1, 2024.
Explanation of State Expenditures: Medicaid Services: This bill requires the Family and Social Services
Administration (FSSA) to apply for a Medicaid state plan amendment to allow school corporations to seek
Medicaid reimbursement for medically necessary school based Medicaid covered services (currently law
states that the FSSA may apply for this amendment). If the amendment is approved, schools will be required
to certify the amount they have expended during a defined period that constitute a Medicaid expenditure for
HB 1389 1 Medicaid-covered services and allowable activities.
Since the bill requires the use of certified public expenditures (CPEs) in the state plan amendment, the
provision by a school of allowable services to a Medicaid eligible student constitutes as the state share of
the Medicaid expenses, meaning the state incurs no additional Medicaid costs, and allows the state to receive
federal reimbursement for the federal share of the Medicaid expenses (see Additional Information). Federal
guidance recommends that states share the federal reimbursement with schools. Any portion of the federal
reimbursement amount not passed on by FSSA to schools could be used to reduce state Medicaid
expenditures. Use of such funds will be at the discretion of the FSSA. The amount of federal reimbursement
is indeterminable and will depend on the number, frequency, and cost of certified services provided by
schools.
Staffing: This bill requires the FSSA and the Indiana Department of Education (DOE) to each employ one
full-time employee with the primary responsibility to assist with the implementation of Medicaid school
based services, as prescribed in the bill. Each agency may transition a current employee to fulfill this
requirement or may hire a new employee. If a new employee is hired, additional costs, inclusive of salary
and benefits, are estimated between $85,000 and $105,000 for the FSSA and between $105,000 and $125,000
for the DOE. As of December 2023, the FSSA Office of Medicaid Policy and Planning had 24 vacant non-IT
full-time positions and the DOE had 28 vacant non-IT full-time positions.
School Health Provider Study: The IDOE must conduct a study regarding school based health providers, as
prescribed in the bill. A report from the study must be submitted to the Legislative Council and posted on
the DOE website before November 1, 2024. This requirement will increase the workload for the DOE, but
could be fulfilled utilizing existing staff and the additional employee the DOE is required to employ under
this bill.
Additional Information: Certified Public Expenditures: CPEs are a Medicaid financing mechanism that
allows units of government, including a school, to participate in financing the non-federal share of Medicaid
expenditures. Unlike intergovernmental transfers, a school does not transfer funds to the state Medicaid
agency (FSSA) when using a CPE, but certifies that it has expended amounts during a defined period that
constitute a Medicaid expenditure for Medicaid-covered services and allowable activities. The certified
amount is the total computable Medicaid expenditure (including both the state and federal share).
The state claims this amount for federal matching and receives the federal share of allowable expenditures
from the Centers for Medicare and Medicaid Services (CMS). When CPEs are used as a financing
mechanism, the Medicaid payment must be limited to the actual cost that the school incurs in providing the
Medicaid-covered services, as required under 42 C.F.R. § 433.51(b).
State Medicaid agencies are not required, but are strongly encouraged by CMS, to pay the federal share
associated with CPEs to schools.
Medicaid: Medicaid and the Children’s Health Insurance Program (CHIP) are jointly funded between the
state and federal governments. The state share of costs for most Medicaid medical services for FFY 2024
is 34%, 10% for the age 19 to 64 expansion population within the Healthy Indiana Plan (HIP), and 24% for
CHIP. The state share of administrative costs is 50%. The state share of most Medicaid and CHIP
expenditures is paid from General Fund appropriations, and state dedicated funds primarily cover HIP costs.
Explanation of State Revenues:
HB 1389 2 Explanation of Local Expenditures: Medicaid Services: Schools will incur additional workload, and may
incur a small increase in expenditure, to certify and submit the amount they have expended during a defined
period that constitute a Medicaid expenditure for Medicaid-covered services and allowable activities, as
prescribed in the bill.
Explanation of Local Revenues: Schools may receive additional revenue from the federal share of Medicaid
reimbursement resulting from the state plan amendment required under this bill. The amount of funding
received by a school will be at the discretion of the FSSA (see Explanation of State Expenditures). Schools
may only use the additional funding received to support school based health programs and services.
State Agencies Affected: Family and Social Services Administration; Department of Education.
Local Agencies Affected: School corporations.
Information Sources: State staffing table, December 2023;
Centers for Medicare and Medicaid Services - Delivering Services in School Based Settings: A
Comprehensive Guide to Medicaid Services and Administrative Claiming,
https://www.medicaid.gov/sites/default/files/2023-07/sbs-guide-medicaid-services-administrative-claimin
g-ud.pdf.
Fiscal Analyst: Jason Barrett, 317-232-9809.
HB 1389 3