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SB 506

Maryland Medical Assistance Program - Use of Reimbursement Funds by Schools

2025 Regular Session Introduced by Shaneka Henson

Requires Maryland schools to use Medicaid/MCHP school-based reimbursements to hire providers, fund paid internships, and stipends, boosting staffing and workforce pipelines.

Hearing 3/05 at 1:00 p.m. (Education, Energy, and the Environment)
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Bill Summary · SB 506

SB 506 — Maryland Medical Assistance Program — Use of Reimbursement Funds by Schools

Status: Introduced Feb 19, 2025; Hearing scheduled Mar 5, 2025, 1:00 p.m. (Senate Education, Energy, and the Environment). Assigned to relevant budget/finance committees. Effective date in bill: October 1, 2025 (if enacted).

Purpose / Intent

Require Maryland elementary and secondary schools (and county school systems) to direct Medicaid/MCHP reimbursement payments received for school‑based health services toward workforce and pipeline activities that support delivery of those services in schools — specifically to grow and retain school‑based health providers.

Key provisions

  • Definitions

    • “Provider” — school audiologist, school psychologist, school speech‑language pathologist, and other health‑care practitioners who deliver services to students in school settings.
    • “Reimbursement funds” — funds a school or county school system receives for services provided in a school setting to an individual enrolled in the Maryland Medical Assistance Program (Medicaid) or the Maryland Children’s Health Insurance Program (MCHP).

  • Required allowable uses: An elementary or secondary school or county school system must use reimbursement funds to provide:

    1. Additional positions for providers (e.g., hire more school audiologists, psychologists, speech pathologists).
    2. Paid internships for students pursuing careers as providers (pipeline development).
    3. Stipends for providers (including targeted stipends for providers working in low‑performing schools) aimed at improving recruitment and retention.

  • Implementation: The Maryland State Department of Education (MSDE) must adopt regulations to implement the statute.

Who is affected

  • Local impact: Public elementary and secondary schools and county school systems that bill and receive Medicaid/MCHP reimbursement for eligible school‑based services.
  • Beneficiaries: Students receiving school‑based health services (through maintaining or expanding provider capacity) and individuals in training pipelines (paid internships).
  • State agencies: MSDE (rulemaking and oversight); Maryland Dept. of Health not directly changed by the statute but involved operationally through existing Medicaid/MCHP billing.

Fiscal and operational impacts

  • State: MSDE can adopt implementing regulations with existing resources; no direct change in State revenues per fiscal note.
  • Local school systems: Total Medicaid/MCHP revenues unchanged, but the bill restricts how those funds may be spent beginning in FY2026. School systems may need to reallocate or replace funding previously used for other supports (e.g., temporary aides, training, assistive technology, behavioral supports). The bill may increase local expenditures if systems choose to preserve other programs by supplanting reimbursement funds. The mandate is identified as a local government mandate.
  • Potential benefits: Targeted use of funds could improve recruitment and retention of school‑based providers and strengthen workforce pipelines, which may help address current shortages.

Procedural / timeline notes

  • Introduced in early 2025 and referred to Education, Energy, and the Environment (and to Finance for fiscal review).
  • Public hearing noted for March 5, 2025 at 1:00 p.m.
  • If enacted as drafted, statutory effective date is October 1, 2025; implementation (regulatory detail) will follow MSDE rulemaking.

Context / considerations

  • Maryland school systems already bill Medicaid/MCHP for a set of school‑based services (audiology, nursing, therapy, psychological services, therapeutic behavior services, etc.). Local jurisdictions vary in how they currently allocate reimbursement proceeds; fiscal analyses cited examples (e.g., one large county reports ~$5.2M in Medicaid/MCHP receipts of which only a portion is currently used for positions enumerated in the bill).
  • The bill shifts allowable uses toward workforce and pipeline investments, narrowing local flexibility over the use of those federal reimbursement dollars.

Compiled from official sources — confirm details with the bill’s official record.

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