Rural Health Policy Project

CMS Guidance Spotlights Ways Medicaid Can Support Mental Health and Substance Use Disorder Services in Schools

The Centers for Medicare and Medicaid Services (CMS) and the Substance Abuse and Mental Health Services Administration (SAMHSA) recently released a Joint Informational Bulletin that offers a helpful roadmap to states and schools on the ways certain Medicaid authorities can help support school-based mental health and substance use disorder services for children and adolescents. 

As we’ve written previously, student mental health support is a growing priority for child health advocates and stakeholders in both the education and health sectors, particularly with concerns about school climate and safety. About 1 in 5 children and adolescents experience a mental, emotional or behavioral disorder each year, but less than one-third of those affected actually receive treatment. And while gun violence in schools is still relatively rare, 2018 was the worst year on record and we are seeing a sharper focus on student mental health and the role that schools should play in meeting those needs and keeping students safe. 

Our nation’s opioid crisis and its impact on children, adolescents, and families also speaks to the urgent need to address mental health concerns and substance use issues in schools. Among adolescents, it is estimated that up to 10 percent experience substance use disorders. 

The impetus is clear, and opportunities exist. Since children and adolescents spend much of their waking hours in school, investing in evidence-based, comprehensive school-based mental health and substance use prevention and treatment services and promoting safe and supportive school environments that are trauma-sensitive can help improve access to care and outcomes.  The guidance outlines Medicaid authorities states can use to pay for students’ mental health and substance use services, including:

  • Medicaid coverage of school-based mental health and substance use disorder treatment services. States can amend their state Medicaid plan (called a State Plan Amendment, or SPA) to provide mental health and substance use related services in school-based settings and ensure that these services are covered by Medicaid and are eligible for federal financial participation (a percentage of state expenditures to be reimbursed to the state by the federal government for the costs of administering the Medicaid program). 
  • Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services, including behavioral health counseling and peer support services for students. EPSDT, the Medicaid benefit for children and adolescents, provides a comprehensive array of prevention, diagnostic, and treatment services for Medicaid-enrolled children and adolescents under age 21, including behavioral health counseling under the rehabilitative services benefit. While a SPA is not required to add EPSDT coverage for screening and behavioral health services, some states choose to submit a SPA in order to clarify to CMS the mental health and substance use disorder treatment services covered in school-based settings. Relatedly, states may seek to cover peer-based support services for children and students with mental health challenges or substance use disorders. 
  • Federally Qualified Health Center (FQHC) and Rural Health Clinic (RHC)-supported mental health and substance use disorder services in schools. FQHCs and RHCs can provide mental health and substance use disorder treatment services to Medicaid-enrolled students located at or near a school, such as a school-based or school-linked health center. For more on school-based health center financing, please read this discussion paper by Dr. Olga Acosta Price with the Center for Health and Health Care in Schools, commissioned by the Brookings Economic Studies program.  
  • School-based managed care initiatives and contracts. States may use a managed care payment delivery system to cover the full range of EPSDT screening, diagnostic, and treatment services, including mental health and substance use related services to children and youth in schools, or states may carve out some EPSDT services, or services beyond contracted limits, and retain responsibility for them in a fee-for-service payment delivery system, or contract with another managed care plan to provide behavioral health services to children and youth, including in school-based settings. 
  • Medicaid payment for school-based mental health and substance use related services. In 2014, CMS issued guidance reversing the long-standing federal rule called the “free care rule.” This policy change allows schools to seek payment from Medicaid for health services, including mental health and substance use related services, delivered to all Medicaid-enrolled children, regardless of whether or not a student has an Individualized Education Plan or an Individualized Family Service Plan under the Individuals with Disabilities Education Act. For more information on what states are doing to implement this policy option, read this issue brief by Community Catalyst, the Healthy Schools Campaign, and Trust for America’s Health. 

So what does this mean for advocates? This informational bulletin provides advocates with tools and resources to help coalesce their state health and education officials, and other key stakeholders, around a common goal of leveraging multiple funding streams, including Medicaid, to adequately meet the critical unmet need for school-based mental health and substance use prevention and treatment services for students.

Please read the Joint Informational Bulletin here