Schools using Medicaid for budget band-aids

Wisconsin State Roundup

Published July 1, 2005  | July 2005 issue

Funny how an idea catches on when someone finds a useful loophole, particularly when it comes to money. So it is that Wisconsin school districts are increasingly tapping Medicaid-a health program for the poor funded by federal and state dollars-to help counterbalance tight budgets.

They do so by seeking reimbursement for medical care provided to students who qualify for Medicaid. According to the Milwaukee Journal Sentinel, at first only a handful of schools realized the opportunity for reimbursement, which totaled just $2.4 million in 1995. But word has spread, and reimbursements hit more than $20 million by 2001. Last year, a total of 280 school districts—about two of every three in the state—qualified for reimbursements totaling $23.8 million.

It's also a good deal for states, because of how Medicaid is funded. The federal government reimburses 60 percent of the cost of medical service provided by a school and sends that amount to the state. Because the state pays for a substantial amount of any district's budget, it keeps 40 percent of the federal reimbursement-a total of $15 million in 2004-and passes the rest on to districts with Medicaid claims.

Ronald A. Wirtz