Enhancing TennCare Coverage of School-Based Services

Heavyn Jennings | July 2022

Over 890,000 children in Tennessee are enrolled in TennCare, including 547,000 school-age children. As children grow up, they are less likely to visit the doctor for their well-child visits. In 2020, 69% of 3- to 5-year-old TennCare enrollees had at least one well-child visit compared to only 52% of enrollees ages 10 to 14 year. Well-child visits are just as important for older children as they are for younger children to ensure proper health prevention, promotion, and treatment.  Since many TennCare enrollees attend school and students attend school at least 180 days a year, schools are an ideal place to co-locate health services.  

Currently, schools provide a limited number of health services to students through state education funds and TennCare for those with an eligible Individual Education Plan (IEP). Schools hire nurses, counselors, psychologists, and social workers. These providers are funded through the state’s education funding formula. They provide a limited range of free services to all students. Additionally, they can be reimbursed by TennCare for providing certain services to students with an IEP. These services consist of therapies (speech, physical, occupational, audiology), mental health counseling, limited nursing, and orientation and mobility diagnostic services. 

For providers to be reimbursed for these services, a few other criteria must be met: 

  1. The provider must be approved by TennCare and the appropriate Managed Care Organization (MCO) 
  2. It must be a covered TennCare service 
  3. The student must be enrolled in TennCare 
  4. The service must be included in the student’s IEP 
  5. The service must be a service that would be included in the IEP of any student with similar needs regardless of TennCare eligibility 

As one may guess, most students are ineligible to receive Medicaid-reimbursable services in school under the current system. The rules would need to change for schools to be an efficient location for TennCare enrollees to receive health services. Fortunately, there is a way for Tennessee to change things and expand TennCare coverage of school-based services. 

The way is Free Care reversal. The Free Care Rule (1997, reversed in 2014) established criteria 3 thru 5 above and limited Medicaid’s ability to cover school-based services. Fortunately, CMS reversed the rule in 2014, but states have been slow to implement the reversal (17 states have implemented thus far). Implementing free care reversal would allow all children enrolled in Medicaid to receive school-based services and for those services to be covered by TennCare if criteria 1 thru 3 are met. Free Care Reversal would expand access to school health services to more students and be a way to increase the number of school-aged children getting their medically necessary well-child visits. Additionally, Medicaid funds cover all services necessary and have no cap while IDEA (provides funds for IEP services) and education funds are limited. Since they are limited, it would make more sense and be more beneficial for students if these education funds were reserved for non-medical expenses and TennCare were used to cover medical expenses. Tennessee can and should implement free care reversal through a state plan amendment to expand access to school-based health services. 



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