AN ACT Relating to special education programs for handicapped children; amending RCW 28A.41.053 and 74.09.520; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that there is increasing demand for school districts' special education programs to include medical services necessary for handicapped children's participation and educational progress. In some cases, these services could qualify for federal funding under Title XIX of the social security act. The legislature intends to establish a process for school districts to obtain reimbursement for eligible services from medical assistance funds. In this way, state dollars for handicapped education can be leveraged to generate federal matching funds, thereby increasing the overall level of resources available for school districts' special education programs.

Sec. 2. Section 11, chapter 66, Laws of 1971 ex. sess. as amended by section 5, chapter 87, Laws of 1980 and RCW 28A.41.053 are each amended to read as follows:

The superintendent of public instruction shall submit to each regular session of the legislature during an odd-numbered year a programmed budget request for handicapped programs. Funding for programs operated by local school districts shall be ((~~funded~~)) on an excess cost basis from appropriations provided by the legislature for handicapped programs and shall take account of state funds accruing through RCW 28A.41.130, 28A.41.140, and other state and local funds, excluding special excess levies. Funding for local district programs may include payments from state and federal funds for medical assistance provided under RCW 74.09.500 through 74.09.910. However, the superintendent of public instruction shall reimburse the department of social and health services from state appropriations for handicapped education programs for the state-funded portion of any medical assistance payment made by the department for services provided under an individualized education program established pursuant to chapter 28A.13 RCW. The amount of such interagency reimbursement shall be deducted by the superintendent of public instruction in determining additional allocations to districts for handicapped education programs under this section.

Sec. 3. Section 5, chapter 30, Laws of 1967 ex. sess. as last amended by section 3, chapter 5, Laws of 1985 and RCW 74.09.520 are each amended to read as follows:

The term "medical assistance" may include the following care and services: (1) Inpatient hospital services; (2) outpatient hospital services; (3) other laboratory and x-ray services; (4) skilled nursing home services; (5) physicians' services, which shall include prescribed medication and instruction on birth control devices; (6) medical care, or any other type of remedial care as may be established by the secretary; (7) home health care services; (8) private duty nursing services; (9) dental services; (10) physical therapy and related services; (11) prescribed drugs, dentures, and prosthetic devices; and eyeglasses prescribed by a physician skilled in diseases of the eye or by an optometrist, whichever the individual may select; (12) other diagnostic, screening, preventive, and rehabilitative services((~~: PROVIDED, That~~)); and (13) like services when furnished to a handicapped child by a school district as part of an individualized education program established pursuant to chapter 28A.13 RCW. For the purposes of this section, the department may not cut off any prescription medications, oxygen supplies, respiratory services, or other life-sustaining medical services or supplies.

"Medical assistance," notwithstanding any other provision of law, shall not include routine foot care, or dental services delivered by any health care provider, that are not mandated by Title XIX of the social security act unless there is a specific appropriation for these services. Services included in an individualized education program for a handicapped child under chapter 28A.13 RCW shall not qualify as medical assistance prior to the implementation of the funding process developed under section 4 of this act.

NEW SECTION. Sec. 4. The department of social and health services and the superintendent of public instruction shall jointly develop a process and plan to enable school districts to bill medical assistance for eligible services included in handicapped education programs, subject to the restrictions and limitations of this act. The process shall be implemented during the 1989-90 school year, with the intent that the billing system be in operation in selected regions of the state during the first half of that school year. The billing system shall be extended state-wide prior to the beginning of the 1990-91 school year. The planning shall include:

(1) Consideration of the types of services provided by school districts that would be eligible for medical assistance, and whether the state's medical assistance plan should be expanded to cover additional services for children;

(2) Establishment of categories of eligible services and the rates of reimbursement;

(3) Development of a state-wide billing system for use by school districts and educational service districts, which may include phased expansion of the system, providing billing services to the various regions of the state in stages;

(4) Measures for accountability and auditing of billings;

(5) Information bulletins and workshops for school districts and educational service districts;

(6) Contracting with educational service districts or other organizations for billing services or for other assistance in implementing the process established under this section;

(7) Formal agreements between the department and the superintendent of public instruction for notification of payments and for interagency reimbursement under section 2 of this act; and

(8) Review and approval of the plan by the office of financial management prior to implementation.

NEW SECTION. Sec. 5. Prior to January 15, 1990, the superintendent of public instruction and the department of social and health services shall submit a joint report to the appropriations committee of the house of representatives and the ways and means committee of the senate on the agencies' progress in implementing the medical assistance billing system for school districts established under this act.