What’s Ahead for K-12 Medicaid Billing Under the Current Administration?

K-12 school districts across the country rely on Medicaid reimbursements to help fund essential health and special education services. But under the current administration, the future of K-12 Medicaid billing may face significant policy and funding headwinds—raising concerns for district leaders responsible for both student services and budget stability.

1. The Loss of Momentum on Billing Simplification 

Last year, K-12 administrators were hopeful about a proposed rule change that would have removed the requirement for one-time parental consent before billing Medicaid for IDEA-related services. Many districts saw this as a chance to reduce red tape and recover more funds without compromising compliance. But in a move that disappointed many district leaders, the Department of Education formally withdrew the rule. That means districts must continue navigating outdated documentation requirements that slow down reimbursements and create barriers to accessing funding for services already provided. 

2. Budget Cuts Could Undercut School Programs 

The current administration has supported sweeping Medicaid cuts—up to $880 billion over 10 years—which could shrink the pool of funds available to districts for school-based claiming. Many K-12 Medicaid coordinators already struggle to balance staffing and compliance with thin reimbursements. If these cuts materialize, districts may be forced to absorb service costs locally or cut back on staffing—particularly for nurses, therapists, and paraprofessionals supporting students with IEPs. 

3. Increased Eligibility Scrutiny = Increased Administrative Burden 

Proposals to add quarterly eligibility checks or implement work requirements for Medicaid recipients may not directly target school-age children—but the downstream impact is real. Districts may see more interruptions in student eligibility, which means more denied claims, more time spent tracking down coverage documentation, and greater unpredictability in reimbursement forecasts. For districts using school-based Medicaid as a funding strategy, that volatility is a serious risk. 

4. Districts May Bear More of the Cost for Critical Student Services 

School-based Medicaid brings in an estimated $7.5 billion per year to public schools nationwide, often helping to fund school nurses, mental health counselors, speech pathologists, and transportation services. In districts already facing staffing shortages or rising caseloads, these funds are a lifeline. Without them, many districts may face the impossible choice between cutting services or increasing reliance on general funds—potentially affecting academic outcomes for students most in need. 

5. What District Leaders Should Do Now 

While policy is still unfolding, district leaders should begin preparing for possible disruption: 

• Audit your current Medicaid claiming process: Are you maximizing your reimbursements? Are there areas where process improvements or technology could help reduce denials or streamline documentation? 

• Engage your state’s Medicaid agency: Build relationships now to understand how state-level decisions could buffer—or amplify—federal changes. 

• Advocate at the federal level: Partner with national associations like the National Alliance for Medicaid in Education (NAME), Council of Administrators of Special Education (CASE), or NASDSE to ensure that school-based Medicaid remains a protected and prioritized program under any administration. 

Bottom Line:

This administration’s policy proposals signal more hurdles ahead for districts relying on Medicaid reimbursements to support student health and special education services. By staying informed, tightening operational practices, and engaging in advocacy now, K-12 leaders can help ensure that their students—especially those most at risk—don’t bear the cost of political change. 

Dr. Taylor Plumbee

Dr. Taylor Plumblee is an experienced education executive with demonstrated success in education management and marketing. She joined Frontline Education in 2021 and is the Manager of Product and Solution Marketing with a focus on Student & Business Solutions including School Health Management, Special Program Management, Student Information Systems, and Data & Analytics.