New Hampshire commission examines Medicaid billing shortfalls as special-education costs rise

A legislative commission formed to study special-education costs under SB 57 heard detailed testimony on Oct. 15 on barriers that keep New Hampshire school districts from drawing federal Medicaid dollars intended to cover medically related school services.

Chairman Rick Ladd, who leads the commission and chairs House Education Funding, said the state’s catastrophic/special-education aid has been under strain: "the commissioner had approximately $34,000,000 for catastrophic aid. We were shallow by another $16,000,000, and that was prorated down to the school districts at around 68%." He noted a later change set a minimum proration of 80% but said the funding gap persists.

Why it matters

Commission members were focused on whether schools are "leaving federal money on the table" because of billing complexity, regulatory changes and local capacity limits — factors that increase pressure on state special-education aid and local school budgets.

The discussion centered on three facts presented to the panel: Medicaid reimbursements to schools have fallen substantially since the pre-pandemic period; federal and state compliance rules recently altered who may sign orders and what costs are allowed; and small districts often lack the staffing or scale to sustain the billing work.

What witnesses said

Henry Littman, Medicaid director at the New Hampshire Department of Health and Human Services, described a national shift in federal policy that will change the state’s reimbursement methodology in state fiscal year 2027. “That methodology is being eliminated ... We’re converting…