Districts leave hundreds of thousands of dollars in Medicaid reimbursements unclaimed because transportation directors do not know IEP bus rides are billable

Medicaid will reimburse school districts for transporting students with IEPs to and from school-based services mandated under IDEA. For the 2023-2024 school year, the reimbursement rate was $13.35 per trip, recently increased to $29.06 per trip as of October 2024. A mid-size district transporting 200 IEP students daily could claim over $200,000 per year in Medicaid reimbursement for transportation alone — Greenville-size districts were estimated at $221,000 annually at the old rate. At $29.06 per trip, that figure more than doubles. Yet many districts either do not claim at all, or claim for special education services but omit the transportation component, leaving significant money on the table. The unclaimed reimbursements are not a rounding error — they represent funds that could hire another driver, maintain another bus, or prevent a route cancellation. In districts already operating at the margin of their transportation budgets, $200,000-$400,000 annually is the difference between running all routes and cutting some. The irony is that the district is already providing and paying for the transportation. The rides happen every day. The only missing step is documentation and billing. But that step does not happen because transportation and special education operate in different administrative silos. The structural reason this money goes unclaimed is organizational: Medicaid reimbursement for school services is typically handled by special education administrators or a district Medicaid coordinator, because eligibility is tied to students' IEPs. But transportation data — which days a student rode, pickup and dropoff times, which aide accompanied them, driver signatures — lives in the transportation department's systems. Connecting these two data sets requires either manual reconciliation (which no one has time for) or system integration between routing/GPS software and Medicaid billing software (which rarely exists). The state may require signatures from the driver, aide, or both for each trip. Collecting daily paper signatures from bus drivers who are already managing split shifts and 40+ students is operationally burdensome. The result is that districts either do not attempt to bill transportation, or attempt it and give up after the documentation burden proves unsustainable.