Unintended consequences: School districts left holding the bill after PCA cuts


School districts across the state are grappling with budget shortfalls. This coming July, the hole in their bucket is about to get bigger. As eligibility guidelines for the state’s Personal Care Assistance (PCA) program become more stringent, Minnesota schools will lose, by conservative estimates, an additional $10 million dollars in funding.

“These are not state Medical Assistance dollars we’re losing,” said Janet Lowe, coordinator of third party reimbursement for St. Paul Public Schools. “These are federal dollars, but under the new state guidelines, a significant portion of PCA services children currently receive are no longer eligible for reimbursement, so we lose all that funding.”

Considered “flow through dollars” the federal Medicaid reimbursement for PCA services in schools comes at no cost to the state. The Minnesota Department of Human Services also covers its administrative costs by taking a five percent “set aside” from federal dollars as they come in, and refunds any excess to the schools.

“I don’t think the public or the legislators truly understand that this is not a drain on Minnesota taxpayers,” added Lowe.

Who’s affected?

Last year, Level II behaviors, defined as unusual or repetitive habits, withdrawn or offensive behaviors, were no longer eligible for PCA services, affecting Minnesotans with autism, mental illness, traumatic brain injury and other cognitive disabilities.

This coming July, Level I behaviors will be eliminated as an eligibility criteria for PCA services and nearly 2,200 Minnesotans will lose services – the vast majority being children. Level I behavior is when someone is physically aggressive towards themselves, others, or destructive to property and requires an immediate response from someone else to stop it.

“It’s the child with autism who may pick at himself, or the child with severe EBD [emotional behavior disorder] who when angry, pounds his fist into a locker or pushes a chair across the room, or the child with traumatic brain injury who cannot be left unattended or they might walk off the ledge of a platform on the playground or fall when walking,” said Julie Stoneking, third party billing coordinator for Albert Lea Area Schools.

The cuts will affect the federal Medicaid reimbursement for roughly 10 percent of children who are in special education in the Minneapolis, St. Paul and Albert Lea public school districts.  

In dollars, this translates to approximately $1 million in funding losses for Minneapolis Public Schools. Albert Lea Area Schools, a district less than one-tenth the size of Minneapolis, will lose $120,000-150,000. St. Paul is still calculating the final cost of the loss. Other schools across the state are facing similar challenges.

The double bind

The changes in state eligibility guidelines for PCA services place school districts in a double bind.

“School districts are caught in the middle, and we’re required by law to provide these services to students free of charge,” said Stoneking.

Under the Individuals with Disabilities Education Act (IDEA), students with disabilities who access special education services must have an Individualized Education Program (IEP) plan that’s designed to meet their unique education needs. Schools must provide the special education support and related services, including accommodations as out lined in the IEP.

So unlike community providers of PCA services who can choose not to provide services they aren’t being paid for, public schools don’t have that option.

As well, the time restrictions put on the number of PCA hours allowed by the state doesn’t work well in an environment that is required by a different set of laws to address the unique needs of an individual.

“We have to look at what the child needs, and we provide it. So as far as the state’s changes in the number of hours or amount of service – that’s not something our staff can even consider,” says Kay Dole, district program facilitator for Minneapolis Public Schools.

Cash strapped schools are already footing the bill for a good portion of PCA services. While the federal match can vary, Minnesota schools currently pay for approximately 50 percent of the cost for PCA services in the schools, and are reimbursed with federal Medicaid dollars for the other half.

To further complicate matters, during the Ventura administration, the legislature mandated that schools seek reimbursement for any health related services available in the community that are listed on a child’s IEP. So currently by law, Minnesota schools bill for any PCA services covered by Medicaid for children that need assistance with Activities of Daily Living and support for emotional and social behaviors in order to be successful at school.

“We do provide very skilled services to children, and we must to be able to continue to do that. But what makes this difficult is when decisions are made that haven’t fully explored the impact on other groups,” said Dole.

Where do we go from here?

School officials are hopeful that state lawmakers will reinstate Level I and Level II behaviors as criteria for PCA eligibility, or allow for certain social behaviors that are barriers to learning. But any future changes must be done thoughtfully. Schools simply can’t be a made into a special class that’s exempt from the cuts, because under Medicaid guidelines, they can’t bill for services that aren’t available in the broader community.

According to school officials, the cuts will not affect the IEP services for children, who will continue to receive all the services as listed on their IEP plans. But school districts are still figuring out exactly how they’re going to do this.

“I think the fact that at this point we can’t say exactly how we’re going to address the cuts is significant. We’re going to have to do some work to be able to solve this loss of revenue. What we do know is that we have to keep the cuts away from the classroom and away from the children,” said Dole.

At some point, the impact on kids may be unavoidable.

“Eventually this will lead to special ed cuts because the dollars just aren’t there. We’re going to try really hard not to impact the kids, but when you have cuts every single year for multiple years in a row, eventually it’s going to start hurting the kids,” said Stoneking.