Maximizing Medicaid Funding to Support Health and Mental Health Services for School-Age Children and Youth

The Finance Project
October 4, 2000
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Over the past several years, increasing public
attention, local and national policy debate,
and private and public sector funding have
focused on developing high quality programs for children
and families during nonschool
hours. In a related and
promising development, community
school initiatives—
sometimes called “full service schools” or “extended
service schools”—are increasingly offering services and
resources to children and families in public school
buildings, during school hours, before and after
school, on weekends, and during the summer.
Out-of-school time and community school initiatives
have emerged as two of the more dynamic strategies
for ensuring children’s success, strengthening families,
improving schooling, and building communities.
Simultaneously, recent federal emphasis on promoting
early and preventative health care for low-income families
has increased opportunities for providing health
and mental health services to school-age children and
youth. Combined, these factors create the possibility
of an expanded, dynamic role for health and mental
health services in initiatives serving school-age children
and youth.
As the nation’s strongest financial commitment to
ensuring the health and mental health of poor children,
Medicaid represents a significant potential
source of funds for expansion and improvement of
mental health and health services in initiatives serving
school-age children and youth. Wherever a Medicaideligible
child receives a Medicaid-eligible service from
a Medicaid-certified provider—the costs of that service
are reimbursable by federal and state agencies.
Moreover, unlike many other federal programs,
Medicaid is an entitlement program. This means that
it is not subject to a spending cap; as long as claims
filed by local agencies meet the requirements of the
state and federal agencies who administer Medicaid,
there is no limit on the funds that can be paid out.
Nor is Medicaid a competition in which a few fortunate
grantees receive funding and other applicants are
refused support. Finally, when programs draw down
Medicaid funds to pay for existing services which were
previously supported with other local or state funds,
these funds can be freed up for other work, making
possible program expansions and other improvements
in the quality of service.

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