Many in the education and healthcare sectors have seen the latest CMS bulletin, which aims to close a Medicaid financing loophole involving Managed Care Organization (MCO) taxes. Naturally, this has raised questions among school district leaders about how it might impact school-based Medicaid billing programs, such as LEA BOP and CYBHI, in California.
💡 Here’s the key takeaway:
This proposed rule does not affect school-based Medicaid programs. It is narrowly focused on certain state-level financing structures, specifically how some states structure their Medicaid Cost Sharing (MCO) taxes to draw down additional federal funds.
✔️ California is one of the states mentioned, but the proposal targets broad Medicaid fiscal policy, not how schools bill for services.
🎓 Programs like LEA BOP, SMAA, and CYBHI are not at risk.
These remain critical, federally supported initiatives to ensure students receive the physical and behavioral health services they need.
At Practi-Cal, we’re monitoring state and federal policy and engaging with stakeholders to ensure school-based services remain protected and understood. We’ll continue to keep our partners and clients informed of any relevant developments.
If you have questions or concerns, feel free to reach out—this is what we’re here for.
