MaineCare Seed for Special Purpose Private Schools

Memo to: Superintendents, Business Managers and Directors of Special Education

The Department of Health and Human Services (DHHS) Office of MaineCare has been working with the Department of Education (DOE) to find solutions to some fundamental issues regarding the payment of school based services. These issues have been complex and have required systems changes in both state agencies.

Previously, when special purpose private schools (SPPS) billed MaineCare, all allowable claims were paid only the Federal portion of the reimbursement by MaineCare. The special purpose private school then billed DOE for State Agency Clients and the resident school administrative units (SAUs) for students that were not State Agency Clients for the State portion (seed) of the claim.

The Center for Medicare & Medicaid Services (CMS) has advised MaineCare that the process we have been using cannot continue. Therefore, special purpose private schools will be paid 100% of the Medicaid reimbursement rate for allowable claims with a service date beginning July 1, 2011.

There have been some challenges getting the MaineCare payment system adjusted for this change. The backlog of claims that began to pay in December 2011 paid the Federal portion only. SPPS have been advised not to seek payment from SAUs for that State portion (seed) because MaineCare intends to re-run those claims to adjust the claim reimbursement amount to 100% of the allowable claim reimbursement.

The first claims that paid at 100% were processed the first week in February 2012.

DOE and DHHS have developed a system that utilizes DOE State funds as the State portion of the Medicaid reimbursement for medically necessary services delivered to Medicaid-eligible children attending special purpose private schools.

  • State Agency Clients – State share funded by DOE State Agency Client fund; transferred directly from DOE to DHHS/MaineCare.
  • Students placed through the Individualized Education Program (IEP) process from public schools – the State’s share will be funded directly from each SAU’s General Purpose Aid for Local School Allocation. DOE will adjust the SAU’s subsidy payments for the portion (seed) that the SAU is responsible for, and the State will transfer those funds to DHHS/MaineCare on behalf of the SAU.
    • DOE plans to make those subsidy adjustments for all claims paid at 100% through February 2012 in May, which will reduce the remaining monthly subsidy checks in this fiscal year.  For those SAUs where there is not sufficient State subsidy remaining to pay for the MaineCare Seed, the balance to be paid will be adjusted in 2012-13 State subsidy.
    • Details of MaineCare-paid claims with Individual Student ID’s, services provided, service dates, etc. will be provided to each SAU for inspection and certification for the subsidy adjustments.  Each SAU will receive those details by mail during the week of May 7th.
    • For your planning purposes, an estimate of the total State portion (seed) adjustments for each SAU is posted at the following website:
  • It is important to note that MaineCare paid some claims between July and December 2011 that only covered the Federal portion, and SAUs were billed by the SPPS for the State portion (seed). Those payments by SAUs to SPPS are not subject to this change and should be or should have been paid. SAUs will not be subject to the subsidy adjustment for those previously paid seed payments.
  • While most SPPS do not bill the seed portion of claims to SAUs until they receive the MaineCare payment for the federal portion, some SPPS did bill the seed portion in advance of MaineCare payment. The SPPS have agreed to return those payments to SAUs as those previously unpaid claims will now be paid by MaineCare at 100% and the new seed portion will be paid by adjustments to subsidy. We are working with those SPPS to identify those advance seed billing and payments made by SAUs to ensure that the seed is returned to SAUs and double payment is not allowed through the subsidy adjustment.
  • This process does not apply to Child Development Services (CDS).

This process is an interim process that may become standard practice for FY 13. Both DOE and DHHS are committed to developing a long-range process to support the provision of school-based services to all children.

DOE intends to conduct rate setting for the educational rate of special purpose private schools this summer, August 15, 2012 thru October 1, 2012.

If you have any questions, please contact Jim Rier at or Suzan Beaudoin at

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