Blog

Unexpected school closures happened so quickly in the early days of the pandemic. Managers of Section 504 programs faced — and still face — a great deal of uncertainty because closures and hybrid learning don’t change the fact that schools are responsible for preventing discrimination and providing the appropriate supports for students with disabilities to ensure they enjoy equal opportunity to access education. However, making sure students receive the services they’re entitled to during a global pandemic isn’t easy and introduces a lot of questions from a compliance perspective.

Are districts at fault for lack of progress or skill regression? Will compensatory services be required? How much do you owe, and when is it due?

Jose Martín, an expert on laws regarding students with disabilities in public schools, recently shared the latest guidance and legal concerns about COVID-19-related compensatory services under Section 504.

What are the rules?

To help schools navigate the uncharted waters, the US Department of Education (DOE) Office of Special Education Programs was quick to issue COVID-19 guidance in mid-March of 2020. With respect to services during school closures, the guidance stated that, “to the greatest extent possible, schools need to implement the services that are identified in students’ IEPs under IDEA or in Section 504 plans.”

In turn, the Department of Education’s Office for Civil Rights (OCR) issued its guidance in September 2020. Basically, to avoid the risk of not providing FAPE (Free and Appropriate Public Education), OCR reminded schools they couldn’t just give a standard set of services or accommodations to all students under Section 504. They must focus on the individualized needs of every student with a 504 plan. In addition, parents could not be asked to sign waivers of their children’s rights to FAPE under IDEA or Section 504 in exchange for getting the online services.

The law on the effect of remote learning during the pandemic to comply with the provisions of an IEP remains unsettled. We’ve never encountered a situation where districts had to quickly shift from full-time live school services to online instruction. To what degree online teaching can substitute for FAPE in the live instructional world remains to be seen. It will likely be different for each student depending on their needs and may be determined by future court cases.

What are compensatory services?

Even reasonable attempts to provide online instruction might not be fully compliant with the FAPE obligation, so you still might owe compensatory services. Compensatory education is kind of like back taxes. It’s FAPE that you should have provided to a child, and you didn’t, which now you have to double up on to catch up.

So, if you didn’t pay your 2016 taxes, you currently owe your 2020 taxes plus your 2016 taxes. Those 2016 taxes, those back taxes, that’s the compensatory education. You’re going to owe a student his regular FAPE, plus the back FAPE, the compensatory services.

Whose fault is it, anyway?

Online learning doesn’t work for every student. That’s a given. But districts have to try hard to meet the needs of all students. If a student has an IEP or 504 plan, parents can take legal action against them for not providing FAPE during school closures.

Martín calls it COVID comp. Some states are even giving it a different name altogether, such as recovery services or supplemental school closure services. Giving this remedy another name highlights that we had to close the schools and switch to online instructional options, not because we wanted to, but because we were forced to. If there was an inability to provide a full FAPE to students in the online environment, it was not because of any negligence on the school district’s part.

What if a parent is not engaging with the school or is not involved with making sure their child participates? Guidance implies that even if the parent is not responding, the LEA may still maintain a responsibility to provide FAPE. Certainly, schools must make every effort to communicate with such parents and try to determine the source of the problem to attempt to address it. To the federal courts, though, a parent’s conduct in refusing services can affect the compensatory services calculation, and it may mean they’re not entitled to compensatory services at all if they unreasonably failed to take advantage of available services.

Remember, document everything! And try harder. Teachers should not only send emails but try text messages, follow-up emails, and phone calls to show they made significant efforts. Those persistent attempts to contact parents demonstrate the school’s efforts to do everything it could.

Sometimes the issue might be the student’s conduct. In one case, the court felt that while the district had denied the student FAPE, parents also failed to take advantage of services. The student didn’t want to go to school, and the parent avoided IEP meetings. So the court did not award compensatory services.

There is another complicating factor. Certain students in Section 504, say those with severe to moderate ADHD, who exhibit lots of off-task behavior, may have multiple challenges participating in an online program. Even with live instruction, those children can be resistant or off task. If a child’s disabilities make them a poor fit for online instruction, should they be penalized for not participating? Likely not.

What if parents seek reimbursement for private services that they got on their own during a COVID-19 school closure? Is the ability to seek reimbursement for private services during a closure the same in the context of no-fault COVID comp? It’s likely that condensed online services aren’t as effective as live services. We don’t know if the courts will find there is reduced expectation during school closure periods.

Early in the pandemic, the DOE determined that no waivers were necessary with respect to FAPE because schools could provide access to FAPE through at-home services. Schools are expected to get the students back to the place they would have been had there not been a school closure.

Another unanticipated twist

Martín notes a difference in his interpretation of online instruction vs. distance learning. He describes online instruction as condensed prerecorded lessons. Distance learning is when a student participates at home on a computer while the teacher is teaching other kids in the classroom.

As schools start to reopen, parents in some states have an option not to send their children to school in person, but rather to continue with some form of distance learning. If the parent voluntarily declines the face-to-face services and chooses distance learning, does that make a difference in the COVID comp analysis?

The answer is that it’s unclear. When parents opt for distance learning, school districts should make sure parents understand that, due to the inherent nature of distance learning, the student might not make the same amount of progress. It’s possible that the courts will say the parents waived full FAPE by opting for distance learning when they were aware it might not have been of equal benefit.

But another way that the courts could view this is that parents shouldn’t have to compromise their child’s safety to get full FAPE. In that case, the full comp may still be owed. It would be wise for schools to take action if a child is struggling in the distance learning environment. The 504 team should contact parents and request a meeting to discuss concerns and possible changes to the accommodations during distance learning. The team may consider urging the parent to reconsider sending the student to school based on the data.

How much do you owe, and when is it due?

If you determine that a child is owed COVID comp, the next issue to decide is how much. How are you going to structure it? When are you going to provide it? How fast are you going to discharge this obligation? The 504 team is responsible for those decisions.

A major challenge shared by every school district in the United States is to provide compensatory services after school closures end. If schools don’t do it right, there’s going to be a wave of litigation on compensatory services.

Unintended consequences

COVID comp is not a remedy for failure on the part of the school district. OSEP recognizes that school districts were unable to provide certain services because of COVID-19-related issues, not because of their negligence. OSEP acknowledges the unprecedented nature of the pandemic and the immense challenge placed on schools.

Suppose there is a lack of expected reading progress during the school closure period. Parents might see it as evidence that the school’s reading program is not working and then want to refer the child for special education evaluation. An important message to parents should be that a lack of reading progress during school closure probably has to do with a shift from face-to-face instruction to at-home instruction. It’s the most likely reason because it’s what happened most recently. That’s the part that’s really different, not the program itself.

It is important not to encourage, pressure or coerce parents into giving up on their compensatory services. School staff should instead offer comp services and encourage parents to take advantage of them. Some parents might say that their child is stressed and overloaded, and they don’t want the comp services. That’s understandable. But you can, still offer to provide the compensatory services in ways that won’t burden the child.

If parents want reading services made up immediately, they should be cautioned not to overload a child with so many services too quickly. You want the child to get the full benefit of the compensatory services, even if it takes a little bit more time.

The goal is to return the student to the levels of performance they should have been at if there hadn’t been a school closure. This reflects the full FAPE standard applicable under IDEA. It’s not so clear that this applies to 504 FAPE to the same degree, but schools should aim to follow the same standards.

The districts that invested more time, thought, energy, and resources in their online services are the ones that are going to have to do less comp. Districts that didn’t do as well with online instruction and support will have a bigger job getting out of the compensatory services hole.

In today’s culture, schools do more than just educate. They are outreach centers, health care providers, and community leaders who are integral to connecting families to services. Much of this is rooted in the development of schools as health care providers and Medicaid outreach organizations.

One of the predominant Medicaid reimbursement programs that schools participate in as a health care provider is referred to as fee-for-service (FFS) claiming. Also known as direct service or interim claiming, this is the process by which schools get reimbursed for health services provided to some students.

The evolution of fee-for-service claiming

School-based health services expanded beyond the school nurse in 1975, when the first iteration of what is now referred to as the Individuals with Disabilities Education Act (IDEA) was enacted. This act mandated equal access to a general education for all students, raising the standard for student rights across the country and creating a mandate for Individualized Education Programs (IEPs) for students with disabilities. As part of that standard, regulations stipulated that any student with a disability that affected their ability to receive a general education should be treated for that disability by the school, thereby allowing that student a Free Appropriate Public Education (FAPE).

With this act, schools evolved to become health care providers, hiring occupational therapists to help students with dexterity issues, speech-language pathologists to work with students with language comprehension or aphasia, and psychologists and behavioral therapists and counselors to support student mental health.

One hitch, however: funding for this mandate was not provided.

In 1988, an amendment was passed that allowed school districts to enroll as Medicaid providers to support the delivery of services mandated in students’ IEPs, plunging school districts into the world of Medicaid claiming for the first time. Understanding the FFS Medicaid program and its complexities will help any school district participating in this program to maximize their services and revenue.

Federal and state regulations

How the fee-for-service program works in any state is a mix of both federal guidance and state regulations. At the federal level, the Centers for Medicare & Medicaid Services (CMS) has defined the scope and best practices for Medicaid in schools through a technical assistance guide and other publications. The types of services and programs that are potentially billable are outlined at this level. Within the CMS’s guidelines, states make the ultimate decision on multiple levels.

Service types that can be claimed through fee-for-service

At the federal level, allowable service types include:

“Physicians’ services and medical and surgical services of a dentist, medical or other remedial care provided by licensed practitioners, clinic services, dental services, physical therapy, occupational therapy, and services for individuals with speech, hearing and language disorders, diagnostic services, preventive services, rehabilitative services, transportation services, nurse practitioner services, private duty nursing services, personal care services, family planning services.”

Any given state might choose only a portion of service types within this list to include in their program. For example, in many states, personal care services and transportation are not billable through the FFS program.

Rate and unit type of each allowable procedure for each service

Medicaid is a federal and state matching program, meaning the federal government supplies at least 50% of the funding and potentially more based on state need. Because school districts are funded directly by state taxes, schools only receive the federal portion of any fee submitted for payment, referred to as the Federal Medical Assistance Percentage (FMAP) rate. So, if a service is billed for $10, a school district will receive $5 or more, depending on the FMAP rate in each state.

Although Medicaid revenue for school districts is only funded through the federal match of the Medicaid program, states are the administrators of the program, so they decide the rate of payment for service. Each state publishes a fee schedule that identifies the rate for each procedure a therapist can perform, the rate associated to that procedure, and the unit of measurement. Rates differ widely across various states. For example, in Texas, an evaluation of speech fluency has a rate of $2.93, and in Nevada the same procedure has a rate of $96.66.

The exact licensures that can bill for services in the state

Because medical licenses and certifications are state based, states also decide which type of license, certification, or qualification is required within each service type for a service to be billable. This varies widely across states. In Virginia, for example, assistants of multiple service types can bill services. In Missouri, for physical and occupational therapy, only therapists who are licensed can bill services.

Record keeping and documentation requirements for services

As the administrators of the Medicaid program, state offices also conduct the majority of audits and define which records must be kept on file and what documentation must be conducted to support the billing of services. The requirements for service documentation, timing of service documentation, and records like IEP documents and doctors’ orders are all under state purview and defined in state billing manuals.

Enrollment and enrolling entities

While all school districts are allowed to be Medicaid providers, each school district must apply to become a provider. This involves a lengthy application process with the state Medicaid agency. In addition, most districts choose to bill services through a third-party vendor — often called a submitter or clearinghouse: a private company that collects documentation and handles Medicaid transactions. Vendors must apply to become an approved submitter with each state and undergo an application and transaction testing process.

Once both entities are approved, school districts and vendors then declare their relationship to the state through a trading partner agreement that certifies the vendor is authorized to submit HIPAA-protected data to the state Medicaid agency on behalf of the school district.

Day-to-day claiming practices

Within a school district there are many different stakeholders that participate in the claiming process.

Health Service Provider(s): The largest group of stakeholders are the health care providers. These therapists, nurses, and mental health care providers who provide services to students in schools are responsible for accurately documenting those services and ensuring their documentation meets both Medicaid standards and licensing standards.

Medicaid Coordinator/Office: Depending on the size of the district, the Medicaid Coordinator or Medicaid Office is responsible for choosing which Medicaid-eligible services will be billed and is typically the primary liaison to the state Medicaid agency for regulatory questions and to the school district’s Medicaid billing vendor.

School District: The district is considered the provider and the claiming entity. All payments for services rendered at a school are submitted to the district as an organization and dispersed according to district policy. In some states, such as California, there are regulations around the usage and management of Medicaid revenue.

Documentation System: Most districts purchase an electronic web-based documentation system where providers can log their services electronically. This documentation system is often also a Medicaid billing software used to validate service logs for claiming by the Medicaid billing vendor, or can integrate with a Medicaid vendor to translate the documentation into billing information for submissions.

Medicaid Billing Vendor: The Medicaid billing vendor is the organization responsible for managing the billing program, from determining Medicaid eligibility to validating documentation entered by providers and generating Medicaid claim files that are sent to the state. Vendors also collect back remittance advice, which outlines the approval or denial of each service submitted, and the explanation of benefits. While vendors receive revenue information, the payment is sent directly to the school district as the provider.

Validations and audits

As district personnel document services given to students, districts must also prepare and maintain records to support all Medicaid billing. First and foremost is the proof of medical necessity: establishing the need for a medical service to address a diagnosed medical condition. In the wider medical world, this is determined by a doctor or other qualified health provider through an examination or evaluation. The need for ongoing therapy or treatment is defined in a plan of care that describes the condition and how the treatment will ameliorate that condition. Plans of care are often described through different terms, such as an individual health plan for nursing services.

Through IDEA, IEPs can be considered a plan of care and used to establish the medical necessity of the therapy or other health services mandated in the document. An IEP must include certain parameters to be considered a plan of care. These vary by state but commonly include:

• The proof of an evaluation by a qualified health care professional to determine a medical issue
• A defined frequency and scope of service delivery, usually to address a specific health goal

In addition to a valid IEP to support billing through the FFS program, school districts must also include records proving their providers meet the state licensure requirements, that parents have consented to allow Medicaid billing for their child, and in some cases a doctor’s sign-off of the IEP or plan of care.

Medicaid does not collect or validate for this supporting data. It is expected that the school district, as the Medicaid provider, is reviewing each service and only submitting those that meet all criteria. State audits require all records surrounding any audited service be supplied to support billing.

Medicaid Expansion

In 2014, the federal government expanded Medicaid billing to include services beyond those written into an IEP. The implementation of this expansion is still ongoing as each state rewrites and submits new Medicaid state plans incorporating the new federal regulations into state practice.

Once a state plan is approved at the federal level, each state must rewrite its Medicaid regulations to define which additional programs can be considered valid for billing if they meet plan-of-care requirements. In Louisiana, for example, outside of IEPs, only nursing individual health plans were included for billing. In Colorado’s plan, the program type is not relevant as long as the program includes the plan-of-care requirements, which opens up billing for any service with a plan of care (for example, a Section 504 plan).

As states roll out regulations, you should pay close attention to where and when new services can be billed to increase the revenue that helps support service delivery as a whole.