Federal

Spending Bills Would Permit Medicaid Reimbursements

By Alyson Klein — May 20, 2008 4 min read
  • Save to favorites
  • Print

A provision protecting school Medicaid reimbursements was approved as part of a supplemental-spending bill by the House of Representatives last week.

Under the bill, the federal government would have to continue reimbursing schools for administrative and most student-transportation costs covered by Medicaid until at least next spring, despite a Bush administration directive that sought to halt the practice.

The Medicaid provision and some other domestic programs had been part of a broader package financing the wars in Iraq and Afghanistan. But partisan battles led to the war funding being stripped out. That funding will likely be restored.

Meanwhile, the Senate Appropriations Committee passed its own supplemental-spending measure for fiscal 2008 that includes the Medicaid language.

The Senate panel’s bill also would provide a one-year extension of the Secure Rural Schools and Community Self-Determination Act of 2000, a program that gives federal aid to make up for diminished timber revenues in counties that are home to national forests.

The Senate committee’s bill, which was approved on a voice vote, would extend the program at a cost of about $400 million. The House bill, which passed the full chamber May 15, doesn’t contain the rural schools language.

“We were incredibly disappointed that it wasn’t included” in the House bill, said Mary L. Kusler, the assistant director of governmental relations for the American Association of School Administrators, in Arlington, Va. “Thousands of communities across the country are contemplating extreme layoffs in the coming weeks.”

But supporters of the rural schools program say they are worried the funding extension wouldn’t survive a presidential veto threat. The White House Office of Management and Budget released a statement May 15 saying President Bush would reject the House bill, in part because lawmakers lawmakers sought to includes “billions of dollars” on a war-funding bill.

An aide to Rep. Peter A. DeFazio, D-Ore., who is championing the renewal of the rural schools program, said in an e-mail that the program’s supporters were pursuing other options to pass the extension.

The supplemental bills would also expand veterans’ education benefits by about $51.6 billion over 10 years.

Medicaid Moratorium

The Medicaid provisions also rankled the administration. In December, the Centers for Medicare and Medicaid Services, an arm of the Department of Health and Human Services, issued a final rule that sought to eliminate the reimbursements that school districts receive for certain administrative and transportation expenses from the Medicaid program. Districts receive such payments to cover the cost of transporting some students in special education, for instance. (“U.S. to Trim School Medicaid Payments After Freeze,” Jan. 9, 2008.)

Also in December, Congress approved legislation that keeps any school-related changes to Medicaid from taking effect until July 1. The spending bills would extend the moratorium until April 1.

By that point, lawmakers who support the moratorium hope they can negotiate potential changes with the next administration—or just leave the reimbursement program in place, lobbyists said.

It was an open question whether the Medicaid language could prompt a White House veto. The OMB statement singled out the Medicaid provision, saying that it would “block the [administration] from implementing important regulations protecting the fiscal integrity of the Medicaid program.”

Without the extension, districts will lose millions of dollars, and many will have to lay off employees such as school nurses, according to Greg Morris, the executive director of LEAnet, a Sacramento, Calif.-based organization representing some 680 school districts.

“Most people don’t see school districts as being in the health business or the health-services business, but they are,” Mr. Morris said.

Moving Slowly

Congress has been particularly sluggish this year in crafting the spending bill for the departments of Labor, Health and Human Services, and Education for fiscal 2009, which begins Oct. 1.

Secretary of Education Margaret Spellings has yet to testify on the president’s budget proposal before the Senate Appropriations subcommittee that oversees education spending, an event that typically happens in early spring.

Democratic leaders are moving slowly on education appropriations in large part to avoid another spending showdown with President Bush, who last year vetoed a bill that would have hiked the Education Department’s budget by 5.6 percent. He later agreed to a smaller increase.

In February of this year, after President Bush released a budget that proposed level funding of $59.2 billion for the Education Department, Democratic leaders in both chambers signaled that Congress would pass legislation extending funding for most programs at fiscal 2008 levels until a new president who might be more disposed to supporting their priorities takes office. (“Democrats Aim to Resist Bush Budget,” Feb. 13, 2008.)

“The key is that nobody believes that he’s going to sign anything, and therefore the appropriators are hesitant to go through the whole process,” said Bill Cunningham, a lobbyist for the 1.4 million-member American Federation of Teachers.

A version of this article appeared in the May 21, 2008 edition of Education Week as Spending Bills Would Permit Medicaid Reimbursements

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Recruitment & Retention Webinar
Hiring, Retention, and Fill Rates: A Data-Driven Sub Strategy
Explore what keeps substitutes coming back and hear how one district rebuilt its substitute hiring process and improved its fill rate.
Content provided by Frontline Education
Early Childhood K-12 Essentials Forum Early Childhood Education: Building Essential Skills for Success
Join this free virtual event to examine the biggest challenges in supporting young children, from preschool through elementary school. 
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Absenteeism Webinar
Attendance Isn't an Attendance Problem
Boost attendance by strengthening relationships, belonging, and support with practical strategies from Doug Fisher & Nancy Frey.
Content provided by Corwin

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal Opinion What’s Behind the Trump Administration's Push to Reform Head Start?
Assistant Secretary Alex Adams explains the Trump administration’s approach to the early-ed program.
7 min read
The United States Capitol building as a bookcase filled with red, white, and blue policy books in a Washington DC landscape.
Luca D'Urbino for Education Week
Federal Ed. Dept. Would Have More Power to Cut Off Grants Under New Rules
The agency last year ended in-progress grants worth more than $2 billion, with courts often objecting.
5 min read
Jeanette Vyhanek, a counselor at Wellstone Elementary, teaches a class of kindergarten students at the St. Paul school on Oct. 31, 2025 in Minnesota.
Jeanette Vyhanek, a counselor at Wellstone Elementary in St. Paul, Minn., teaches a class of kindergarten students on Oct. 31, 2025. Federal grants to expand the ranks of school counselors and other school mental health services were among hundreds terminated by the Trump administration in 2025. New rules from the U.S. Department of Education would give the federal agency greater latitude to end in-progress grants.
Alex Kormann/The Minnesota Star Tribune via TNS
Federal Q&A Education Data Collection Has Cratered Under Trump. Can It Be Rebuilt?
Ed. Dept.'s data-gathering agency is too unstable to adapt to changing needs, a new report claims.
6 min read
A student raises her hand to ask a question in her third grade classroom at Highland Elementary School in Columbus, Kan., on Oct. 17, 2022. The arm of the government that oversees education data which tracks educational outcomes for students, faces major challenges ahead due to financial cuts.
A student raises her hand to ask a question in her 3rd grade classroom at Highland Elementary School in Columbus, Kan., on Oct. 17, 2022. Federal education data-gathering, like the Condition of Education report, includes baseline information on students and schools. But cuts to the Education Department's statistics wings and mounting criticism of how it operates raise questions about how it can best fulfill its mission.
Charlie Riedel/AP
Federal Education Department Tells Schools Race Can’t Factor Into Student Discipline
A letter to educators follows up on last month's rescission of longstanding discrimination rules.
5 min read
Assistant Secretary for Civil Rights for the Department of Education nominee Kimberly Richey testifies before the Health, Education, Labor and Pensions committee about her nomination in Washington, D.C., on June 5, 2025.
Assistant Secretary for Civil Rights Kimberley Richey testifies before the Senate's Health, Education, Labor and Pensions committee at her nomination hearing in Washington on June 5, 2025. A new letter to educators from Richey instructs schools not to consider race at all in school discipline policies, following the Trump administration's rescission of longtime anti-discrimination rules.
Jason Andrew for Education Week