Chapter 6, Part V: Universal Health Care Reform’s “Creative Financing”

State tax dollars are used to collect matching federal Medicaid (tax) dollars for services already provided by school nurses whose salaries taxpayers already pay.Â? School Districts are using Medicaid dollars to purchase copiers, computers, printers, audiometers, mini-buses, closed captioned TV for a classroom, an entire computerÂ? system, contracting with substitutes, employment of new special educationÂ? staff, expanding existing special education programs, and implementing totally new programs.Â? It’s been written that the potential for dollars is limitless.[1]

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here “oughta” be an investigation.� If Medicaid is for the poor, then why are schools receiving it?� District taxpayers are told that schools are being “reimbursed” from the state for services already provided. This includes health screenings such as hearing, vision, and scoliosis, as well as immunization� preparation (updating each child’s immunization records and “keeping after” parents to bring their child/ren’s immunizations up to date), and work involving IEPs for special education students.

LOOK BELOW THE SURFACE - The “services ALREADY provided” have long been provided before schools received Medicaid, and were ALREADY “reimbursed” by local taxpayers every time the school employee who provided these services received a paycheck.� If anyone should be reimbursed, it should be the TAXPAYERS who have been paying the “reimbursement” all along!!� Schools are collecting TWICE for providing the same services.� When schools started receiving Medicaid money, the taxpayers who have always been paying for these services did NOT receive a reimbursement.

The truth of the matter is that Medicaid dollars are being used to EXPAND health services offered through schools by creating school-based clinics.� Medicaid dollars which are claimed to simply and innocently “reimburse for services already provided” are being used to purchase copiers, computers, and printers for counselors’ offices.� Apparently there is more “reimbursement” being received than necessary to simply reimburse for “services already being provided.”

The Comprehensive Substance Abuse Treatment and Rehabilitation Program� “(C-STAR) model was developed by Missouri’s Division of Alcohol and Drug Abuse� and is funded by Missouri’s Medicaid program and the Division’s purchase-of-service system.”[2]

This same scenario is happening all over our country.� In Illinois� Medicaid dollars have been used to purchase mini-buses, closed captioned TV, an entire computer� system, and more.� This is partly why Medicaid costs have skyrocketed.� It’s been stated that “the potential for the dollars is limitless.”� Obviously, this must mean that the amount of dollars the government thinks it can collect from the taxpayers is limitless.� If elected officials want to do something to help families, please stop taxing us into poverty.

Schools are being used as a vehicle to reach ALL children and families to implement universal health care.Â? The government is working towards implementing Medicaid as its single payer for universal managed health care coverage.Â? This is socialized medicine. Socialized medicine caters to prevention, and abandons those most in need of medical care. Socialism implements mediocrity, and is a captor of souls that yearn for freedom.

“Medicaid� expenditures are another reason why federal funds� have become increasingly important to states. Between 1970 and 1987, Medicaid expenditures rose from about 4 percent of state expenditures to more than 10 percent.� Seven years later, this share had risen to almost 20 percent.� Thus the share of state funds allocated to Medicaid expenditures has increased roughly five-fold in the past 25 years.

“The federal government’s share of each state’s Medicaid spending ranges from 50 percent to 80 percent.Â? Despite this assistance, Medicaid spending by the states has mushroomed at the expense of other spending–According to a NCSLÂ? (National Conference of State Legislatures) survey, Medicaid expenditures rose an estimated 10 percent in fiscal year 1995, significantly higher than the budgeted increase of 7.2 percent; for 1996, Medicaid expenditures are projected to increase 9.5 percent–.

“As states were devoting more resources to Medicaid, education expenditures (elementary and secondary, plus higher education) as a share of general fund expendi­tures fell from 49.7 percent in 1987 to 46.7 percent in 1994–.

“(M)ost policymakers recognize that double-digit yearly percentage increases on entitlement programs like Medicaid, Medicare and AFDC� are not only unsustainable, but are coming at the expense of other programs.”[3]

In order for school districts to be funded, they must now be accredited through the Missouri School Improvement Program (MSIP) which was written into Missouri law in May, 1993, with the passage of Missouri’s Outstanding Schools Act (SB380). This was Missouri’s school reform law passed to comply with Goals 2000� which mandated that states implement a school improvement program.� School districts are mandated� to offer comprehensive health� education, services, and/or referrals.� Missouri’s univer­sal health care reform bill (HB564) provides for this by allowing schools to become Medicaid� providers.� The two laws dovetail, and passed the same week.� HB564 allows schools to provide Medicaid reimbursable services, case management, and/or primary health services through the Missouri Department of Social Services� Division of Medical Services.[4],[5]� This allows Missouri schools to comply with the student support services� portion of the Missouri School Improvement Program Review Procedures, of which implementation is necessary for school district accreditation� and funding.

Families pay health insurance premiums either out-of-pocket or through what is earned as a “fringe benefit” from their place of employment.� While called a “fringe benefit,” health insurance coverage through one’s employer has actually been earned, and is considered to be a part of the worker’s pay.� In other words, the “fringe benefit” has been EARNED, and is NOT a gift.� The funds� used by the employer to purchase health coverage for the employee would otherwise have been added to his/her paycheck, and could have been used by the employee to purchase his/her own health insurance coverage.� Therefore, working Americans have already paid once for health care.� Taxpayers pay a second time when they pay their local personal property tax, of which a large portion goes to the local school district to help pay the salaries of the school nurse and other support staff.� The duties of the school nurse have traditionally included hearing tests, vision tests, and scoliosis screenings for all students� regardless of their economic background.� The school nurse will still provide these services, as she always has, to all students of her Medicaid provider school.� However, now the school collects Medicaid (tax) dollars for each screening provided to each Medicaid-eligible student.� State tax money is used to fund the school foundation formula� - taxpayers pay a third time.� State school foundation formula funds are put into a state Health Initiatives Fund� for approximately 48 hours to draw down matching federal Medicaid funds, this is referred to as “creative financing,” but for taxpayers it means they pay a fourth time.� The SAME TAXPAYER is paying local, state, and federal taxes� as well as their private health insurance!

As of December 1993, Medicaid may ALSO pay for abortions in the case of rapeÂ? and incest.Â? At present, a police report of the rape is not required to obtain the abortion.Â? These women pay a fifth time when they feel they must sacrifice the life of their child so they may live.

Not reported in the news is the effect of pages 30-37 of Missouri’s health care reform bill.� The Department of Social Services� may “recapture” Medicaid expenses by putting a lien on a deceased Medicaid recipient’s personal property as long as a spouse or dependent no longer lives there.� Taxpayers pay a sixth time, this time with their homes!

During the hearing on HB564, Ms. Widdicombe� explained that this bill was not only for public schools, but private and parochial� schools as well.� A member of the committee asked her what the “carrot” was.� Her one word response was “MONEY.”� Money is the incentive or “carrot” offered to Missouri’s public and private schools to provide Medicaid reimbursable services to eligible students and their families.� These funds� are obtained through what Judith Widdicombe� (a key author of HB564 and foundress of Missouri’s largest abortion� clinic) calls “creative financing.”[6],[7]� Here’s how it works:

Schools may put their state aid (tax dollars received by the school district according to a state foundation formula) into the state Health Initiatives FundÂ? long enough (48 hours) to draw matching Medicaid dollars.[8]Â? For every school foundation formula dollar, the school district may receive an additional $1.20 from Medicaid (YOUR tax dollars).Â? The district receives their initial foundation formula dollar back, the 20 cents goes into the Health Initiatives FundÂ? (see HB564Â? pages 65 and 66) to cover expenses, and the remaining Medicaid dollar MUST be used ONLY for Medicaid services (not academics).[9]

The Project Manager of the Division of Medical Services writes:

“HB564� described a method by which schools could contribute to a fund to draw the match.� A school contributing to the fund, and subsequently doing Medicaid administration, could then be reimbursed� from this fund, up to twice the amount they contributed.

“The state agencies implementing HB564� determined that establishing and administering such a fund would be costly and burdensome to districts as well as the state.� An alternative method of drawing federal match, called ‘certifying the match’ already existed, and precluded the need for an exchange of funds.

“The following will briefly explain how reimbursement works for Medicaid administrative case management.� The formula is:

Cost x percent of time x percent of MedicaidÂ? eligibles x FFP rate = reimbursement

“Here is an example:

“A district identifies ten staff who will engage in any of the Medicaid activities listed in the interagency agreement.� The salaries and benefits of those ten staff equal $300,000 per year.� Since billing is done on a quarterly basis, only one quarter of that is billed.� The schools indirect rate is 20% (This will vary widely from district to district). The first figure in the formula will thus be:

300Â? xÂ? 25%Â? xÂ? 1.2 = 90,000

“This district has 1,000 pupils enrolled and 350 are Medicaid eligible (have a Medicaid card).� This portion of the formula is 35%.

“The ten staff complete time studies on 22 days each quarter.� Some staff report spending 40% or more of their time, on the average, in Medicaid activities, other staff report only 10-25% of their time, still others show less than 10% of their day is typically spent in Medicaid time.� The overall average for this quarter for all the staff is 25%.� This is the third figure.� The final figure, the Federal match rate, is 50%.� In rare, isolated cases, this may be 75%; however, for school districts this will usually be 50%.

“The billing for that quarter is thus:

90,000Â? Â? Â? xÂ? Â? Â? Â? 35%Â? Â? Â? Â? xÂ? Â? 25%Â? Â? xÂ? Â? 50%Â? Â? =Â? $3,937.50

CostsÂ? Â? Â? Â? Â? Â? Â? Â? EligiblesÂ? Â? Â? Â? TimeÂ? Â? Â? Â? Â? Â? Â? FFPÂ? Â? Â? Â? Â? Â? Reimbursement

“When a school district submits a bill for ACM [Administrative Case Management,] the superintendent signs the invoice, certifying the state and local portion (the other 50% in the final cell of the formula) has been expended from state and local sources.Â? This would include the foundation formula, as well as any other non-federal sources of funds.Â? In fact–districts are to exclude any portion of salary and benefits that are from federal sources, because a state is not permitted to meet federal matching requirements with other federal funds.”[10]

While it is made clear that districts are to EXCLUDE any portion of salaries and benefits that are from federal sources, and that a state is not permitted to meet federal matching requirements using other federal funds, DON’T FORGET that ALL government funds come from YOUR POCKET, whether those funds are federal, state or local.

In 1993 the state legislature raised Missouri’s taxes� by $310 million.� It was the single largest tax increase in the state’s history!� Governor Carnahan� told Missourians they would have the opportunity to vote on this issue.� He did not keep that promise.� In 1995, Missouri’s legislature passed an additional “nearly $190 million increase (in taxes to fund) the foundation formula� (which was) the largest single-year increase in the formula in the state’s history.”[11]� This brought the funding for the state’s school Foundation Formula for educational reform to 75 percent.� The General Assembly approved ANOTHER “$185 million dollar increase in the Foundation Formula for the fiscal year beginning July 1, 1996-June, 1997.� This represent(ed) the fourth year of the phase-in of foundation formula increases under the Outstanding Schools Act� and will allow the foundation program to be fully funded for the first time.� In addition, the legislature approved $13 million in money for safe schools initiatives.� The Department of Elementary and Secondary Education� will administer $10 million of that amount and the Department of Public Safety will administer $3 million.”[12] You can bet MORE tax increases are yet to come!!

“Senate Bill 380 revised the Foundation Formula, as ordered by the courts, to make school district distributions more equitable.� To reach this goal, the additional funding needed was ‘phased in’ over a four-year period.� Fiscal Year 1997 is contemplated as the year when full-funding of the ‘revised’ formula is to occur.� Preliminary estimates place the additional amount needed in Fiscal Year 1997 as $165 million.� This amount is on top of the $1.1 billion for the Equity Formula and $129 million for Line 14 At-Risk Programs in the Fiscal Year 1996 budget.� We expect full funding of the formula to be obtained through savings in desegregation and a combination of the Outstanding Schools Trust and Gaming Proceeds for Education (Riverboat) Funds.”[13]

The State Board of Education “approved a request for an increase of $185 million in Foundation Formula aid for next year” (1996-97).[14]

The Missouri Committee on Legislative Research Oversight Division authored the Performance Audit: Schools Becoming MedicaidÂ? Providers.Â? Page iv states “–(T)he Departments of Social Services, Elementary and Secondary Education, Health and Office of Administration have not fully coordinated their procedures in order to guard against duplication of effort and to ensure efficient opera­tion of the program to maximize the service to school districts and ultimately to the citizens of our state.”

Tax dollars fund schools that have traditionally included the salary of school nurses who already provide screening services for ALL students� regardless of their economic background.� Schools may now collect a second time for providing these SAME services to Medicaid eligible children AND their families.� In addition to ser­vices, Medicaid also reimburses schools for: administrative costs, providing case management, (liaison between student, school, and community) and outreach programs which identify families to be added to the Medicaid rolls.� Families of four making “nearly $29,000” may be eligible for preventive health care through Medicaid.[15]

A state document says, “There may be a concern that the district is already being paid to do these activities and participating in this program would result in its being paid twice.� In fact, the federal, state, and local funds� provided school districts are for delivering educational services.� In this context, if another source of funding is available to pay for the health care services provided by the district, the funds now used for those services should be released for more traditional educational purposes.� Therefore, receiving Medicaid funds for health care services should ‘free up’ existing district funds.”[16]

In reality, the funds� that the state refers to as “released for more traditional educational purposes” are to be used to expand health programs, services, referrals, follow-up, etc. as mandated� by the Missouri School Improvement Program� in order for a school district to remain accredited and funded!!

Five individuals authored Missouri’s universal health care reform bill (HB564).� They were from the Missouri Department of Elementary and Secondary Education� the School Nurses’ Association, two from the Department of Health� and Judith Widdicombe Director of Health Policy Institute� and foundress of Reproductive Health Services, which is Missouri’s largest abortion� clinic.� Of no small importance is the fact that (for the fiscal year ending June 30, 1992) Health Policy Institute donated $36,000 to Reproductive Health Services.[17]� How much more has Health Policy Institute donated to the state’s largest abortion clinic?� Since Missouri is known to be a pro-life state, and Ms. Widdicombe� supports abortion, isn’t there a conflict of interest?� Where does the money that Health Policy Institute donates to Reproductive Health Services come from?

Another form of financing for school/community-linked servicesÂ? is the “Incentives For School Excellence”Â? program. School excellence programs may include programs such as the following: Linking Community Services for Family Attachment, Missouri Re: LearningÂ? (Coalition of Essential Schools), Caring Communities, Global SchoolnetÂ? and Global Curriculum Network.

Missouri Re: Learning may be used to “expand (a school district’s) support base by networking with parents, businesses, and community.Â? This includes direct involvement through avenues such as partnershipsÂ? and volunteer programs.”Â? Caring CommunitiesÂ? is one partnership program which may be used to “expand its Schoolwide Project by integrating the Caring Communities ideas of school-linked services–(and) collaborate with other agencies through (community service coalitions) to ‘wrap around’ services to–children and their families.” Global SchoolnetÂ? and Global Curriculum NetworkÂ? is a grant which may be used to install a computerÂ? fileserver which would “permit access to Global Schoolnet (Internet) to promote communication between all segments of the community (schools, universities, community service, health agencies, and others.”)[18]Â? For more information on Caring Communities, partnerships, and tracking, see the chapter titled “‘Together We Can’Â? Socialize ‘Caring Communities.’”

Health is defined to include nutrition.� Here too, one can find “creative financing.”� “Food service personnel at each school record the number of full-paid lunches served each month.� These figures are also reported to the state for reimbursement.”[19]

The full price of an elementary school breakfast is 60 cents.Â? The federal government reimburses the school district $1.16 for each free breakfast, 86 cents for each reduced breakfast, and 19 cents for each full paid breakfast.

The full price for lunch at an elementary school is $1.25, and the full price for lunch at a secondary (middle and high) school is $1.40.Â? The federal government reimburses the school district $1.75 for each free lunch, $1.35 for each reduced lunch, and 17 cents for each full-paid lunch.

Each year more and more children become eligible for free and reduced meals as the allowable eligible income is increased.Â? In July 1993 a household of one with an annual income of $9,061 as well as a family of four with an annual income of $18,655 were eligible for free and reduced meals.Â? In May 1994 a household of one with an annual income of $13,616 as well as a family of four with an annual income of $27,380 were eligible.Â? In May 1995 a household of one with an annual income of $13,820, as well as a family of four with an annual income of $28,028, were eligible for free and reduced meals.

Additional government programs and funding are available to public schools based on the number of district students eligible for free and reduced meals.� One can understand the financial incentive for school districts to identify and enroll as many financially “at-risk” students into the free and reduced meal program as possible.