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U.S. Department of Education: Promoting Educational Excellence for all Americans

Children with disabilities who are covered by public benefits or insurance (Sec. 300.154(d))

Comment: One commenter expressed concern regarding the use of a parent's public benefits or insurance to pay for services required under Part B of the Act because co-payments and other out-of-pocket expenses would be a hardship to low-income families. A few commenters stated that services paid for by public benefits or insurance would count against a child's lifetime cap.

Discussion: The commenters' concerns are addressed in Sec. 300.154(d)(2)(ii) and (d)(2)(iii). Section 300.154(d)(2)(ii) states that a public agency may not require parents to incur an out-of-pocket expense, such as the payment of a deductible or co-pay amount, in filing a claim for services, and may pay from funds reserved under the Act, the cost that the parent would otherwise be required to pay. In addition, Sec. 300.154(d)(2)(iii) states that a public agency may not use a child's benefits under a public benefits or insurance program if that use would decrease lifetime coverage or any other insured benefit; result in the family paying for services that would otherwise be covered by the public benefits or insurance program and that are required for the child outside of the time the child is in school; increase premiums or lead to the discontinuation of benefits or insurance; or risk loss of eligibility for home and community-based waivers, based on aggregate health-related expenditures.

Changes: None.

Comment: One commenter suggested changing "parental consent" to "informed parental consent." One commenter recommended requiring public agencies to obtain parental consent each time the public agency seeks to access the parent's public benefits or insurance. Some commenters recommended removing the requirement to obtain parental consent to use Medicaid benefits to pay for services required under Part B of the Act. A few commenters opposed requiring parental consent stating the process is an administrative burden. Other commenters recommended waiving the requirement for consent if the agency has taken reasonable measures to obtain such consent or the parent's consent was given to the State Medicaid Agency.

Discussion: In order for a public agency to use the Medicaid or other public benefits or insurance program in which a child participates to provide or pay for services required under the Act, the public agency must provide the benefits or insurance program with information from the child's education records (e.g., services provided, length of the services). Information from a child's education records is protected under the Family Educational Rights and Privacy Act of 1974, 20 U.S.C. 1232(g) (FERPA), and section 617(c) of the Act. Under FERPA and section 617(c) of the Act, a child's education records cannot be released to a State Medicaid agency without parental consent, except for a few specified exceptions that do not include the release of education records for insurance billing purposes. Parental consent requires, among other things, that the parent be fully informed in his or her native language, or other mode of communication, consistent with Sec. 300.9. Thus, there is no need to change "parental consent" to "informed consent," as recommended by one commenter. However, we believe it would avoid confusion for the references to "consent" in paragraphs (d) and (e) in Sec. 300.154 to be consistent. Therefore, we will add a reference to Sec. 300.9 in Sec. 300.154(d)(2)(iv)(A) and delete "informed" from Sec. 300.154(e)(1).

We believe obtaining parental consent each time the public agency seeks to use a parent's public insurance or other public benefits to provide or pay for a service is important to protect the privacy rights of the parent and to ensure that the parent is fully informed of a public agency's access to his or her public benefits or insurance and the services paid by the public benefits or insurance program. Therefore, we will revise Sec. 300.154(d)(2)(iv) to clarify that parental consent is required each time the public agency seeks to use the parent's public insurance or other public benefits. We do not believe that it would be appropriate to include a provision permitting waiver of parental consent in this circumstance, even where a public agency makes reasonable efforts to obtain the required parental consent. However, we agree with the commenter that a public agency could satisfy parental consent requirements under FERPA and section 617(c) of the Act if the parent provided the required parental consent to the State Medicaid agency, and the consent satisfied the Part B definition of consent in Sec. 300.9.

We also believe that it is important to let parents know that their refusal to allow access to their public benefits or insurance does not relieve the public agency of its responsibility to ensure that all required services are provided at no cost to the parents. We will, therefore, add a new paragraph (B) to Sec. 300.154(d)(2)(iv) to make this clear.

Finally, because we have referenced the definition of consent in Sec. 300.9 throughout the rest of these regulations, rather than the consent provisions in Sec. 300.622, we have removed the reference to Sec. 300.622.

Changes: Section 300.154(d)(2)(iv) has been changed to clarify that consent must be obtained each time the public agency seeks to access a parent's public benefits or insurance and to clarify that a parent's refusal to allow access to the parent's public benefits or insurance does not relieve the public agency of its responsibility to ensure that all required services are provided at no cost to the parent. The reference to Sec. 300.622 has been removed and we have added "consistent with Sec. 300.9" following "parental consent" in Sec. 300.154(d)(2)(iv)(A). For consistency, we have removed "informed" before "consent" in Sec. 300.154(e)(1).

Comment: One commenter stated that LEAs and agencies that, by law, must provide educational services should not be allowed to use public benefits or insurance to pay for these programs. One commenter suggested that the Act be more closely aligned with the Medicaid laws. One commenter requested requiring public benefits or insurance agencies, when paying for special education, to meet the standards of the Act, and not the standards for medical environments.

Discussion: We disagree with the comment that LEAs and other public agencies responsible for providing special education and related services to children with disabilities should not be allowed to use public benefits or insurance to pay for these services. Pursuant to section 612(a)(12) of the Act, if a child is covered by a public benefits or insurance program and there is no cost to the family or the child in using the benefits of that program to support a service included in a child's IEP, the public agency is encouraged to use the public benefits or insurance to the extent possible. We believe public benefits or insurance are important resources for LEAs and other public agencies to access, when appropriate, to assist in meeting their obligation to make FAPE available to all children who are eligible to receive services.

Section 300.103 retains the Department's longstanding provision that clarifies that each State may use whatever State, local, Federal, and private sources of support are available in the State to meet the requirements of part 300. Nothing in part 300 relieves an insurer or similar third party from an otherwise valid obligation to provide or pay for services provided to a child with a disability.

The Act does not give the Department the authority to impose the standards of the Act on public benefits or insurance agencies, when paying for special education. If, however, a third party provider, such as a public benefits or insurance company, is unable to provide funding for services outside a clinical setting or other specific setting, the public agency cannot use the third party provider's inability to provide such funding as an appropriate justification for not providing a child with a disability FAPE in the LRE. Nothing in part 300 alters the requirements imposed on a State Medicaid agency, or any other agency administering a public benefits or insurance program by Federal statute, regulation, or policy under Title XIX or Title XXI of the Social Security Act, 42 U.S.C. 1396 through 1396(v) and 42 U.S.C. 1397aa through 1397jj, or any other public benefits or insurance program. See section 612(a)(12) and (e) of the Act.

We believe the regulations are sufficiently aligned with the Medicaid program and consistent with the Act and no further clarification is necessary.

Changes: None.

Comment: One commenter requested clarifying that a child cannot be denied Medicaid-supported medical services merely because he or she receives educational services funded by Medicaid.

Discussion: We do not believe further clarification is necessary because Sec. 300.154(d)(2) is sufficiently clear that the child's receipt of Medicaid-funded educational services, consistent with the Act and these regulations, should not deny the child receipt of other services for which he or she may be eligible under Medicaid or other noneducational programs. Further, Sec. 300.103(b) provides that nothing in part 300 relieves an insurer or third party from an otherwise valid obligation to pay for services provided to a child with a disability.

Changes: None.