Commission: districts bearing unexpected costs after Spaulding placements; recommends DHHS notification and Medicaid help

The Commission to Study the Cost of Special Education spent most of its session examining gaps that leave local school districts paying for students placed in residential programs without clear funding or notice.

Chair called the meeting to order and framed the panel’s mandate under SB 57 to identify revenue sources that reduce reliance on local property taxes. Early in the discussion the chair said the commission should hand its findings to the separate HB 1099 study committee, which is charged with looking at residential placements and faces a near‑term reporting deadline.

A recurring thread was Spaulding (also spelled “Spalding” in testimony), a residential provider that recently opened voluntary, non‑diploma programs. Several members said Winnisquam and other receiving districts were not told when DHHS certified those programs. “Winnasquam was not aware that this program had been approved within their district,” Rebecca Fredette of the Department of Education told the commission, prompting members to recommend that DHHS or a DHHS designee notify districts when a new program or beds are certified.

The meeting also centered on who pays for what. The chair noted the Department of Education’s episode‑of‑treatment fund and the scale of the line item: “In 2025, you have $5,900,000 for episode of treatment,” he said. Rebecca Fredette explained the distinction: “If the student is identified as a student with a disability, it falls under the episode of treatment payments that we make out of the Department of Ed,” she said. For students who are not identified for special education, Fredette said costs — including transportation and board‑and‑care — typically go through DHHS and may not be visible to the district until placements occur.

Members raised concrete examples of fiscal strain. One school official said transportation contracts for out‑of‑district placements can exceed $500 per day and run well over $100,000 per year for a single student; other districts reported contracting for multiple long trips and mounting costs. Several smaller districts told the panel they were exploring buying small vans and operating their own specialized transportation to lower costs.

Medicaid‑to‑schools billing surfaced as both an opportunity and an administrative burden. Multiple members said districts routinely ‘‘leave money on the table’’ because they lack staff or expertise to pursue Medicaid reimbursement. Rebecca said some districts recover six‑figure sums when they do the billing. Members asked the commission to study a technical assistance model — a consortium or call center like Colorado’s Medicaid School Consortium (CSMC) or new Vermont efforts — to help districts maximize federal reimbursements while protecting student privacy.

Funding mechanics and higher‑level policy questions also drew debate: members discussed HB 1563 (which would lower thresholds for state special‑education aid and change proration formulas) and the continuing shortfall in federal IDEA funding. Several members argued the commission should recommend phasing out proration and advocate for full federal IDEA funding, noting that the federal share has fallen far short of the 40% goal.

The commission recorded a number of specific recommendations to carry to the HB 1099 committee and to its final report: require DHHS (or its designee) to notify resident and receiving districts when a residential program is certified; examine whether procedural changes could ensure receiving districts have timely notice and funding; study a statewide technical assistance or consortium model to centralize Medicaid billing help; and recommend legislative attention to proration and thresholds in state special‑education aid formulas.

The commission set a final meeting for June 16 at 9:00 a.m. to draft recommendations and instructed staff to circulate the minutes and supporting materials to members and to the HB 1099 committee prior to that meeting.