The Safer Communities Act: Changes to Medicaid EPSDT and School Based Services

To help reduce gun violence and expand access to mental health services for children, the Bipartisan Safer Communities Act includes a number of Medicaid/CHIP provisions to ensure access to comprehensive health services and to strengthen school-based mental health care. In 2019, Medicaid covered nearly four in ten children nationwide, providing coverage for a comprehensive set of physical and behavioral health services. Mental health concerns among children have increased in recent years, and access and utilization of mental health care may have worsened during the pandemic. As directed by the Safer Communities Act, on August 18 the Centers for Medicare and Medicaid Services (CMS) released informational bulletins to guide state implementation of the Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit (particularly mental health services) and expand access to school-based Medicaid services. This policy watch examines Medicaid’s current role in providing coverage for EPSDT and school-based health services, current challenges, and changes to these services included in the new legislation.

What is EPSDT and what does Safer Communities Act do?

A wide range of services for children are required to be covered under Medicaid’s EPSDT benefit. Under EPSDT, states are required to cover all screening services for children as well as any services “necessary… to correct or ameliorate” a child’s physical or mental health condition. Under EPSDT, states must provide screenings for developmental and behavioral health conditions, as well as for vision, hearing, and dental conditions, on a periodic basis that meets reasonable standards of medical practice. This benefit facilitates greater access to care for children with behavioral health needs, as children diagnosed with mental or other behavioral health conditions must receive any service available under federal Medicaid law necessary to address the condition, even if the state does not cover the behavioral health service for adults.

A 2019 GAO report found that many Medicaid-covered children do not receive recommended screenings and services and recommended increased CMS oversight of EPSDT. More recent data from the Child Core Set for FY 2020 show similar findings with a range in the median share of children who received a well-child visit across states (from 66% of children in their first 15 months of life to 53% of those 12-21). The median share of children under age 4 who received screenings for risk of developmental, behavioral, or social delays across states was 36% and the median share of all children who received preventive dental services was 42%. The GAO report recommended several steps necessary for CMS to increase oversight and ensure that children receive appropriate EPSDT services, including regular assessment and evaluation of EPSDT performance measures and state performance as well as planning assistance to help states improve their provision of the EPSDT benefit.

The Safer Communities Act required federal agencies to review EPSDT implementation and provide updated guidance for state Medicaid programs by June 2024 and requires review and updated guidance every five years thereafter. On August 18, CMS released updated guidance that emphasizes the coverage of mental health and substance use disorder (SUD) services under EPSDT and provides various strategies to expand and strengthen behavioral health services for children with Medicaid. Prior to this, CMS had not released comprehensive guidance on EPSDT requirements and implementation since a series of strategy guides in 2014. The Act also requires the federal Department of Health and Human Services (HHS) to conduct regular reviews of state implementation of EPSDT services, identify gaps and deficiencies, and provide technical assistance to states. These requirements include a review of EPSDT services provided by managed care organizations (MCOs), which are an especially important source of care for children: as of July 2021, 37 states using managed care reported covering 75% or more of all children through MCOs. Finally, the Act directs the GAO to conduct a study on state implementation of EPSDT (including state oversight of managed care organizations) and submit a report to Congress by June 2025.

How does Medicaid support school-based health services and what does Safer Communities Act do?

Schools can be a key setting for providing services to Medicaid-covered children, including those with and without disabilities. Medicaid programs may reimburse medically necessary services that are part of a student’s Individualized Education Plan (IEP) under the Individuals with Disabilities Education Act. Medicaid can also reimburse school-based health centers (SBHCs) for services provided to Medicaid-covered children, including routine screenings, preventive care, behavioral health care, and/or acute care services. Since 2014, CMS has permitted payment for any Medicaid services delivered to covered children, regardless of whether the school provides these services to all students without charge. SBHCs have been found to improve educational and health-related outcomes and be effective tools to advance health equity, and nearly 9 in 10 SBHCs reported billing Medicaid by 2014. Finally, schools can receive Medicaid funding for some administrative activities, such as outreach to and enrollment of Medicaid-eligible children, care coordination, and transportation to and from Medicaid-eligible services.

However, federal agencies have in the past raised concerns about poor oversight and improper Medicaid billing for school-based services. In response to such concerns, CMS issued state guidance as well as an updated guide for claiming payment and now offers training to states. However, the claiming guide has not been updated since 2003, and many contend the guidance has become outdated.

The Safer Communities Act requires federal agencies to issue guidance and provide technical assistance for school-based Medicaid services and awards grants for the expansion of such services. On August 18, CMS released updated guidance that outlines state flexibilities and strategies for expanding Medicaid-covered mental health services in schools. In the guidance, CMS indicated it intends to release further guidance on Medicaid school-based services, including an updated claiming guide and technical assistance guide, in the coming months. This guidance is expected to provide best practices for paying for school-based services, provide strategies for reducing administrative burdens, and supply examples of providers who can provide school-based Medicaid services. The Act also establishes a technical assistance center to assist with the provision of Medicaid payment for school-based services, with a focus on supporting small and rural schools, and allocates $50 million for planning grants to states to expand school-based services under Medicaid.

Additional Medicaid/CHIP provisions in the Safer Communities Act include expanding the Medicaid Certified Community Behavioral Health Center (CCBHC) Medicaid demonstration program and requiring CMS to issue guidance on increasing access behavioral health care services through telehealth. The Act also more broadly addresses children’s mental health challenges by expanding the number of school-based mental health providers, providing trauma care to students, and funding additional school programming.

Given the large share of children covered by Medicaid and the reach of EPSDT and school-based services for access to physical and behavioral health services, the changes to Medicaid in the Safer Communities Act could have significant and long-lasting implications for children’s access to care.