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Medicaid is a federal/state cost sharing benefit program for health and medically necessary services for low-income individuals that was established as Title XIX of the Social Security Act in 1965. Originally, Medicaid benefits could not be used for services provided under the Individuals with Disabilities Education Act (IDEA). In 1988, the Medicare Catastrophic Coverage Act allowed Medicaid to pay for covered medical services provided to Medicaid-enrolled children with special health care needs on their individualized education program (IEP) or individual family service plan (IFSP).

Within the Iowa Department of Education, there are three aspects to reimbursement from the Iowa Medical Assistance Program (Medicaid).  A Local Education Agency (LEA) is a community school district that is able to seek reimbursement for services provided to children requiring special education with services identified on an IEP.  An Area Education Agency (AEA) is a regional service center able to seek reimbursement for services provided to children requiring special education.  The Early ACCESS Program also allows reimbursement for services to children from birth to age three with at least a 25% developmental delay and services identified on an IFSP.

Funding Sources

Medicaid services are funded by a mix of state and federal funds. Each state is able to define what services are covered in their program, with federal approval. In Iowa, all three of the education related provider types return at least the state portion of the Medicaid reimbursement to the Department of Human Services (Iowa’s Medicaid agency).  In fiscal year 2016-17, AEAs and LEAs were able to receive in excess of $62 million in federal Medicaid funds for special education services.  Medicaid will only reimburse a provider for their ‘cost’ of the service and education regulations prohibit an AEA or LEA from charging more than their ‘cost’ for the service. The Department of Human Services, using cost data provided by the Iowa Department of Education, calculates the reimbursement rates for each AEA and LEA on an annual basis.

Current Medicaid Rates (dates of service from July 1, 2017 to June 30, 2018)

The Medicaid reimbursement rates for local districts and AEAs are cost based with rates set annually.  The files below include those new rates.

LEA Rates 2017-2018

AEA Rates Part B 2017-2018

AEA Rates Part C 2017-2018

Archived Medicaid Rates (dates of service from July 1, 2016 to June 30, 2017)

LEA Rates 2016-2017

AEA Rates Part B 2016-2017

AEA Rates Part C 2016-2017

Guiding Practices

Medicaid requires all providers to have appropriate documentation of the services reimbursed. The documentation must be kept for 5 years from the date of the claim submission (or last re-submission). As the documentation is sent to Medicaid for payment, FERPA privacy requires a parental consent to release the information to a third party (Medicaid).

Medicaid Provider Manual

Parental Consent Form (2014-10-07)

Medicaid Annual Notification (2013-07-31)

Many districts are utilizing the free software from Iowa Medicaid (PC-ACE Pro 32). These files are intended to give districts a guide to completion of the more common tasks related to submitting claims to Medicaid.  From downloading and installing the software, to entering claim information and sending the claims, these guides will walk you through the software from the local school district perspective. There are also some maintenance type functions included in these guides.

PCACE Downloading and Installing (2007-03-12)

PCACE Reference File Maintenance (2007-03-12)

PCACE Professional Claims (2007-11-19)

PCACE Preparing Claims for Transactions (2007-11-19)

PCACE Submitting Electronic Transactions (2007-11-19)

PCACE Backing Up and Restoring (2007-11-19)

PCACE Reactivating Claims (2007-11-19)

PCACE Installing the Updates (2007-11-19)


The Iowa Department of Education has designed example documentation forms for the various covered services as follows:

AEA Services for Part B - AEA Medicaid Form (2006-09-21)

Part B Checklist - AEA Record Audit Form (2006-09-21)

AEA Services for Part C - IT Medicaid Form (2006-09-21)

Part C Checklist - IT Record Audit Form (2006-09-21)

LEA Service Forms

Service Documentation - Behavior Counseling PDF (2006-12-07)

Service Documentation - Behavior Counseling (Word) (2006-12-07)

Service Documentation - Nursing Services by LPN (PDF) (2007-10-25)

Service Documentation - Nursing Services by LPN (Word) (2007-10-25)

Service Documentation - Nursing Services by RN (PDF) (2006-09-21)

Service Documentation - Nursing Services by RN (Word) (2007-10-25)

Service Documentation - Behavioral Paraprofessional PDF 2008-01-15 09:21:06

Service Documentation - Behavioral Paraprofessional (Word) 2008-01-15 09:19:43

Weekly Progress Notes Behavior Services PDF (2007-11-19)

Weekly Progress Notes Behavior Services (Word) (2006-12-07)

Service Documentation - Health Paraprofessional PDF 2008-01-15 09:46:08

Service Documentation - Health Paraprofessional (Word) 2008-01-15 09:23:09

Service Documentation - Special Transportation PDF (2006-12-07)

Service Documentation - Special Transportation (Word) (2006-12-07)


Accounting entries for Medicaid can be found on the document, UFA Journal Entries, located on the Uniform Financial Accounting webpage.  Medicaid entries are on the last tab of the worksheet.

Advisory Group

The National Alliance for Medicaid in Education, Inc. (NAME) represents the nation's Medicaid and Education agency staff, along with local education agency administrators, with programmatic responsibility for administering Medicaid's health related service programs in schools. The primary purposes of NAME are to provide an information network among the states on issues pertinent to the Medicaid programs in schools and to act as a focal point of communication between the states. Iowa is well represented in the NAME organization.

Calendar of Events

October 15 - 18, 2017  NAME Conference in Fort Lauderdale, FL

Eligibility List

Each LEA has a Medicaid Eligibility Report that is updated each month.

AEA Contact for Receiving Eligibility Report

FAQs and Training

Medicaid FAQs 07.29.13


The following reference links may also provide valuable information or perspectives related to the Iowa Medicaid within the education environment:

Iowa Department of Human Services

IA Health Link

Printed from the Iowa Department of Education website on April 22, 2018 at 9:13am.