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School advocates back bill to return school‑based Medicaid dollars directly to school health budgets
Summary
Education and therapy providers urged the Joint Committee on Healthcare Financing to pass S.862 to ensure Medicaid reimbursements for school‑based medically necessary services are returned directly to school health budgets rather than absorbed by municipalities, arguing doing so would expand school mental and physical health services.
Advocates for school‑based health services and therapy providers testified July 4 in support of S.862, a bill that would direct Medicaid reimbursement for medically necessary school services back to school budgets so districts can staff and sustain school‑based health and mental‑health programs.
Why the bill: witnesses said school-based delivery is where most children get mental-health and therapeutic care and that current reimbursement practice — where Medicaid funds flow to municipalities and may not be reinvested in the schools that generated them — disincentivizes districts from billing and building programs. Kelly English of the Children’s Mental Health Campaign said the measure “offers a critical and timely solution by ensuring these crucial dollars are returned directly to the school health budget.”
Testimony highlights: John Crocker, director of school mental health for Methuen Public Schools and founder of the Massachusetts School Mental Health Consortium, told the committee that students who receive services in schools are far more likely to complete treatment and that reinvesting Medicaid reimbursements in school health staffing would support prevention and reduce costly crises. Karen Hepler of the Massachusetts Association for Occupational Therapy described administrative barriers that have reduced participation in school Medicaid billing since a 2019 change, and she urged the committee to direct funds to school districts so they can build billing capacity and sustain services required by students’ IEPs.
Discussion vs. action: the committee took testimony and asked clarifying questions about municipal budgeting and how returned funds would be managed; no legislative votes were taken.
Next steps: advocates requested a favorable report so districts can more readily bill Medicaid and reinvest federal dollars into school‑based health and therapy staff while the Legislature considers implementation details.
