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Oregon Schools Leaving Millions in Federal Medicaid Dollars on the Table

A pilot project will help nine schools apply for federal funding to cover the healthcare costs of children in special education. Other states have used this funding stream to put a nurse in every school, and even small states like Montana bring in many times more money than Oregon.
August 23, 2017

A bill passed at the end of the legislative session last month could help the Oregon Department of Education show the way to getting more nurses placed in schools by providing a funding stream to offset the cost of providing care for special-needs children.

Oregon has one of the worst school nurse-to-student ratios in the country -- nearly 4,700 students for every nurse, and 79 of the state’s 197 school districts have no school nurse at all, leaving non-medical professionals like school secretaries and principals to assist students with medical needs.

A big reason for the shortage is that most school districts in Oregon bear the cost for school nurses out of the volatile state school fund, which already struggles to provide for a basic education. School nurses, like arts education and shop class, are seen as expendable.

“We’re spending more and more from the state school fund,” said Ely Sanders, a school health specialist at the Oregon Department of Education. “Oregon has become one of the worst states in billing for Medicaid.”

The largely untapped federal Medicaid funding stream exists to help pay for the care of special education students, which schools are already required to provide by law to ensure that every child gets a chance at a public education.

The Oregon Department of Education is busily recruiting nine school districts across the state to help those districts begin billing Medicaid as part of a pilot project from Senate Bill 111, the compromise measure passed in July from Sen. Laurie Monnes Anderson, D-Gresham, and Rep. Gene Whisnant, R-Sunriver. The legislation was produced from a task force report that the two legislators organized with school officials and state healthcare players such as CareOregon.

The districts in the project are either not currently billing Medicaid at all, or do so in only limited circumstances. It’s hoped that with new money coming in, these districts will be able to hire more nurses and medical assistants.

Monnes Anderson, a retired school nurse in the Oregon City school system, said she’d been working on increasing access to school nurses for years. She said there were examples that other school districts could follow to figure it out. “Silverton schools do it themselves. They pay for school nurses.”

With about 1 million people, Montana is a quarter the size of Oregon by population, yet the Treasure State gets 11 times as much federal Medicaid money -- $35.7 million -- as Oregon to help pay for school nurses, speech pathologists and other health professionals needed to ensure kids are ready to learn.

Oregon schools currently put up $1.9 million towards Medicaid, pulling in just $3.3 million from the feds, but Sanders said a study showed they could be receiving about 10 times as much money.

The Oregon Nurses Association helped lobby for the bill’s passage. “The school nursing services we provide pale in comparison to most states – some of which have a school nurse in every school building. It’s vital that we leverage all existing resources available to help provide the health care Oregon students need and begin to look for pathways to make this a reality for all schools in Oregon,” said Catie Theisen of ONA, in her public testimony.

Originally, a work group recommended mandating school districts to draw down this money rather than continuing to rely so heavily on the general school fund to pay for school nurses. The Confederation of Oregon School Administrators fought off the mandate, leery of the federal government reneging on payments if billing errors are found in audits.

Sanders said leaving the federal money on the table was putting students at risk of a major accident in those school districts that have inadequate or nonexistent school nurse staffing. “This is a crisis, and we need to deal with it on the front end,” he said.

But Sanders said he hoped the pilot project, working with both school districts and educational service districts, as well as private billing companies, might show that, with proper documentation, the stream of money coming in would overwhelm any worries about recoupment.

School districts can only apply for the Medicaid money for kids in special education who are assessed with an individual education plan, but that new outside revenue would go into each district’s general fund, and help offset the costs of hiring a school nursing team to care for the expensive medical needs of these children as well as childhood bumps, bruises and ailments, such as the rising costs of managing childhood diabetes and asthma.

An increase in Medicaid funding for schools would not affect the state’s Medicaid budget for coordinated care organizations or other medical care provided outside of schools. The school districts would take money they are currently paying for medical care for students and apply that as the state’s share of Medicaid, which would be matched nearly 2 to 1 by the federal government.

Reach Chris Gray at [email protected].