Third Party Billing: billing for health services included in your child’s IEP, IFSP, or IIIP
What is Third Party Billing for IEP health-related services? And how does it affect my child?
Schools are required to try to obtain reimbursement from private and public health insurance for health-related services included in your child’s IEP. The school can bill your insurance only if you give your written consent. This means that they have to ask you for information about your insurance and obtain your permission to bill your insurance.
Whether you permit the school to bill your insurance or not, your child must still receive all of the services in the IEP at no cost to you. Under the Individuals with Disabilities Education Act (IDEA), your child is entitled to a free and appropriate public education. If your child needs health-related services at school to obtain a free and appropriate public education, you cannot be required to pay for it. The amount and type of IEP services your child receives cannot be tied to whether the school can bill your insurance. Your child’s IEP team—which always includes you, the parent—should develop the IEP before billing is even considered.
What is the difference between private health insurance and public health insurance?
Private health insurance is coverage you have through your employer or that you purchase yourself. Public insurance is offered by the government through a tax-funded program. If your child is covered under Medical Assistance, TEFRA, or Minnesota Care, then your child has public insurance.
IEP Health-Related Services
- Are the developmental, corrective, and supportive services required to help a child with a disability benefit from special education
- Are written in the Individualized Education Program (IEP), Individualized Family Services Plan (IFSP), or Individual Interagency Intervention Plan (IIIP)
- Are provided during school hours
- May include speech-language pathology, specialized transportation, audiology, mental health services, physical and/or occupational therapy, nursing services, PCA services, assistive technology devices, and medical consultation and assessment
Assessment for IEP Health-Related Services
- The IEP team—which includes you and anyone else you invite—develops the IEP before billing is addressed. This means that the IEP team must decide what services your child needs before anyone thinks about whether the school can bill insurance for the health-related services.
- Any changes to the IEP health services are made by the entire IEP team, which includes you.
- Any changes to billing, including third party billing, does not affect the IEP health-related services your child receives.
Consent for Third Party Billing
- The school must ask for your consent every year in order to bill your child’s insurance for IEP health-related services. Consent is given through written forms provided by your child’s school.
- You do not have to give your consent.
- You can withdraw your consent at any time, and withdrawal will not affect the IEP health-related services your child receives.
- Consent forms must be distributed annually by the school and are valid as long as your child receives special education, for up to one year, or until you withdraw your consent.
- Consent forms must explain what the school plans to do, tell you how your child’s insurance might be affected, list the records that will be released, and tell you to whom the records will be released.
Out-of-Pocket Costs for Parents
- You cannot be required to make any out-of-pocket payments for services provided as part of the IEP. This means that you cannot be required to make any payments to your insurer or the school for health-related services that are provided at school as part of the IEP.
- Each private insurance plan offers different coverage for health-related services. You can find out whether the services in your child’s IEP services are covered by your child’s private insurance by checking in the written health benefit plan contract, which can be provided by your insurer’s customer representative.
- Third Party Billing can affect your child’s overall benefits from private insurance. The premiums may go up, you may have to meet prior authorization requirements, and the annual or lifetime limits of your child’s insurance may be reached earlier than they would have if the school had not billed private insurance. Special education services are supposed to be free. If you let the school bill your private insurance, you may have fewer benefits available to your child under your health plan. (Note: By January 1, 2011, the new federal health reform eliminates annual caps and will restrict lifetime caps until 2014, at which point lifetime caps will also end.)
- You are not responsible for paying co-pays, deductibles, or other out-of pocket expenses for IEP health-related services that your child receives during school.
- If you agree to have your private insurance billed for IEP health-related services and your insurance denies coverage for any reason, the school must still provide the IEP services free of charge.
- Public insurance covers certain health-related services including occupational therapy, physical therapy, speech-language therapy, clinical psychological services, nursing services, school psychological services, school social work services, personal care assistants, assistive technology devices, and specialized transportation services.
- If you give permission for the school to bill your child’s public insurance, your child’s benefits cannot be affected. This means that the IEP services will not count against service limits. Also, the services are excluded from prior authorization, payment, and service requirements.
- Example: Ann has 20 hours of PCA services at home each week. These services are covered by public insurance. Her IEP says that she is to have 20 hours of PCA services at school. Ann’s parents have agreed to let the school bill public insurance for the school PCA hours. Public insurance cannot refuse to pay for Ann’s home PCA hours or reduce the hours of home service just because it pays for the PCA at school. This means that public insurance will be responsible for a total of 40 hours per week of PCA time.
- The school cannot ask you to sign up for public insurance just so it can bill for the health services in your child’s IEP.
- Medical Assistance – TEFRA
- If your child is eligible for TEFRA but you choose not to use TEFRA services outside of those received at school, you can request a disparity agreement.
Private Insurance and Public Insurance
- If your child has both private and public insurance, then the school must bill the private insurance first.
- If the private insurer tells the school that it will not cover the health service, then the school may bill public insurance. The school cannot try to bill public insurance alone, even if you give your permission for it to do so.
- The consent form has a section where you can give the school permission to ask your private insurance if it will pay for the IEP services. This allows the school to only ask, not bill your private insurance. If your private insurance denies coverage, then the school may bill public insurance with your permission. If your private insurance covers the IEP services, then the school cannot bill public insurance.
Records and Privacy
- You have the right to ask for and receive a copy of all records and information given to any party for IEP health-related services.
- Records given to parties outside the school may include your child’s name, date of birth, public insurance member number, IEP, assessment summary, medical orders, documentation of service and progress, and attendance records.
- The school district can only share information to appropriate parties in order to get paid for IEP services, to be audited, or to check the quality of services your child is receiving.