CMS Seeks to Eliminate Medicaid Reimbursement for Administration Expenses to Transport Kids to School

The Centers for Medicare & Medicaid Services (CMS) is seeking to eliminate reimbursement under Medicaid for school administration expenditures and costs related to transportation of school-age children between home and school.

 Currently, federal funding is available to pay for administrative costs of states’ plans. CMS’s new proposed rule “would eliminate reimbursement under the Medicaid program for the costs of certain activities based on a Secretarial finding that these activities are not necessary for the proper and efficient administration of the state plan, nor do they meet the definition of an optional transportation benefit.”

The proposed rule aims to stop federal Medicaid payments “for administrative activities performed by school employees or contractors, or anyone under the control of a public or private educational institution, and transportation from home to school and back for school-aged children with an Individualized Education Program (IEP) or an Individualized Family Services Plan (IFSP) established pursuant to the Individuals with Disabilities Education Act (IDEA).”

 If you wish to comment on the proposed rule electronically, go to, and click on the link “Submit electronic comments on CMS regulations with an open comment period.” Or send regular mail (one original version and two copies) to Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-2287-P, Mail Stop S3-14-22, 7500 Security Blvd., Baltimore, MD 21244.

To be considered by CMS, comments must be received by 5 p.m. Eastern time on Nov. 6, 2007.
This proposed rule was published in the Federal Register, Vol. 72/No. 173, on Friday, Sept. 7, 2007.

This article originally appeared in the October 2007 issue of Mobility Management.

About the Author

Laurie Watanabe is the editor of Mobility Management. She can be reached at

Mobility Management Podcast