Medicaid’s Role in Financing Health Care for Children With Behavioral Health Care Needs in the Special Education System: Implications of the Deficit Reduction Act

Authors

  • David S. Mandell ScD,

    Corresponding author
    1. Assistant Professor, (mandelld@mail.med.upenn.edu), Departments of Psychiatry and Pediatrics, University of Pennsylvania School of Medicine, 3535 Market St, 3rd Floor, Philadelphia, PA 19104; Pediatrics Generalists Research Group; Leonard Davis Institute of Health Economics, Colonial Penn Center, 3641 Locust Walk, Philadelphia, PA 19104.
      David S. Mandell, Assistant Professor, (mandelld@mail.med.upenn.edu), Center for Mental Health Policy and Services Research, University of Pennsylvania School of Medicine, 3535 Market St, 3rd Floor, Philadelphia, PA 19104.
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  • Aliza Machefsky,

    1. Undergraduate Student, (maliza@sas.upenn.edu), School of Arts and Sciences, University of Pennsylvania, 249 South 36th Street, Philadelphia, PA 19104.
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  • David Rubin MD, MSCE,

    1. Assistant Professor, (rubin@email.chop.edu), The Children’s Hospital of Philadelphia, 34th Street and Civic Center Boulevard, Philadelphia, PA 19104; Pediatrics Generalists Research Group; Leonard Davis Institute of Health Economics, Colonial Penn Center, 3641 Locust Walk, Philadelphia, PA 19104.
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  • Chris Feudtner MD, PhD, MPH,

    1. Assistant Professor, (feudtner@email.chop.edu), The Children’s Hospital of Philadelphia, 34th Street and Civic Center Boulevard, Philadelphia, PA 19104; Pediatrics Generalists Research Group; Leonard Davis Institute of Health Economics, Colonial Penn Center, 3641 Locust Walk, Philadelphia, PA 19104.
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  • Susmita Pita MD, MPH,

    1. Assistant Professor, (pati@email.chop.edu), The Children’s Hospital of Philadelphia, 34th Street and Civic Center Boulevard, Philadelphia, PA 19104; Pediatrics Generalists Research Group; Leonard Davis Institute of Health Economics, Colonial Penn Center, 3641 Locust Walk, Philadelphia, PA 19104.
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  • Sara Rosenbaum JD

    1. Professor and Chair, (sarar@gwu.edu), Department of Health Policy, School of Public Health and Health Services, George Washington University, 2021 K Street, NW, Suite 800, Washington, DC 20006.
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Errata

This article is corrected by:

  1. Errata: Erratum Volume 78, Issue 11, 614, Article first published online: 15 October 2008

David S. Mandell, Assistant Professor, (mandelld@mail.med.upenn.edu), Center for Mental Health Policy and Services Research, University of Pennsylvania School of Medicine, 3535 Market St, 3rd Floor, Philadelphia, PA 19104.

ABSTRACT

Background:  Recent changes to Medicaid policy may have unintended consequences in the education system. This study estimated the potential financial impact of the Deficit Reduction Act (DRA) on school districts by calculating Medicaid-reimbursed behavioral health care expenditures for school-aged children in general and children in special education in particular.

Methods:  Medicaid claims and special education records of youth ages 6 to 18 years in Philadelphia, PA, were merged for calendar year 2002. Behavioral health care volume, type, and expenditures were compared between Medicaid-enrolled children receiving and not receiving special education.

Results:  Significant overlap existed among the 126,533 children who were either Medicaid enrolled (114,257) or received special education (27,620). Medicaid-reimbursed behavioral health care was used by 21% of children receiving special education (37% of those Medicaid enrolled) and 15% of other Medicaid-enrolled children. Total expenditures were $197.8 million, 40% of which was spent on the 5728 children in special education and 60% of which was spent on 15,092 other children.

Conclusions:  Medicaid-reimbursed behavioral health services disproportionately support special education students, with expenditures equivalent to 4% of Philadelphia’s $2 billion education budget. The results suggest that special education programs depend on Medicaid-reimbursed services, the financing of which the DRA may jeopardize.

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