[Federal Register Volume 76, Number 188 (Wednesday, September 28, 2011)]
[Proposed Rules]
[Pages 60310-60318]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22784]
Federal Register / Vol. 76, No. 188 / Wednesday, September 28, 2011 /
Proposed Rules
[[Page 60310]]
-----------------------------------------------------------------------
DEPARTMENT OF EDUCATION
34 CFR Part 300
[Docket ID ED-2011-OSERS-0012]
RIN 1820-AB64
Assistance to States for the Education of Children With
Disabilities
AGENCY: Office of Special Education and Rehabilitative Services,
Department of Education.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Secretary proposes to amend regulations under Part B of
the Individuals with Disabilities Education Act (IDEA or Act). These
regulations govern the Assistance to States for the Education of
Children with Disabilities program, including the Preschool Grants
program. The Secretary seeks public comment on these proposed
amendments regarding the use of public benefits or insurance in which a
child participates to provide or pay for services required under Part B
of IDEA.
Since the Part B regulations were amended in 2006, our experience
with implementing the provisions on obtaining parental consent for the
use of public benefits or insurance has raised two important issues.
First, the current regulations do not require that public agencies
inform parents specifically of all of the protections regarding access
to public benefits or insurance, including their rights under the
Family Educational Rights and Privacy Act (FERPA) and IDEA
confidentiality provisions. Second, State educational agencies (SEAs)
and local educational agencies (LEAs) have expressed concerns about the
overall costs and administrative burdens imposed by requiring parental
consent to access public benefits or insurance, in addition to the
parental consent required by FERPA.
DATES: We must receive your comments on or before December 12, 2011.
ADDRESSES: Submit your comments through the Federal eRulemaking Portal
or via postal mail, commercial delivery, or hand delivery. We will not
accept comments by fax or by e-mail. Please submit your comments only
one time, in order to ensure that we do not receive duplicate copies.
In addition, please include the Docket ID at the top of your comments.
Federal eRulemaking Portal: Go to http://www.regulations.gov to
submit your comments electronically. Information on using
Regulations.gov, including instructions for accessing agency documents,
submitting comments, and viewing the docket is available on the site
under ``How To Use This Site.''
Postal Mail, Commercial Delivery, or Hand Delivery. If you
mail or deliver your comments about these proposed regulations, address
them to Jennifer Sheehy, U.S. Department of Education, 400 Maryland
Avenue, SW., room 5103, Potomac Center Plaza, Washington, DC 20202-
2600.
Privacy Note: The Department's policy for comments received from
members of the public (including those comments submitted by mail,
commercial delivery, or hand delivery) is to make these submissions
available for public viewing on the Federal eRulemaking Portal at
http://www.regulations.gov. Therefore, commenters should be careful to
include in their comments only information that they wish to make
publicly available on the Internet.
FOR FURTHER INFORMATION CONTACT: Jennifer Sheehy, U.S. Department of
Education, 400 Maryland Avenue, SW., room 5103, Potomac Center Plaza,
Washington, DC 20202-2600. Telephone: (202) 245-7605.
If you use a telecommunications device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
Individuals with disabilities can obtain a copy of this document in
an accessible format (e.g., braille, large print, audiotape, or
computer diskette) by contacting Jennifer Sheehy, U.S. Department of
Education, 400 Maryland Avenue, SW., room 5103, Potomac Center Plaza,
Washington, DC 20202-2600. Telephone: (202) 245-7605.
SUPPLEMENTARY INFORMATION:
Invitation To Comment
We invite you to submit comments regarding these proposed
regulations. To ensure that your comments have maximum effect in
developing the final regulations, we urge you to identify clearly the
specific section or sections of the proposed regulations that each of
your comments addresses and to arrange your comments in the same order
as the proposed regulations.
We invite you to assist us in complying with the specific
requirements of Executive Order 12866; Executive Order 13563; and the
Presidential Memorandum on Administrative Flexibility, Lower Costs and
Better Results for State, Local, and Tribal Governments and their
overall direction to Federal agencies to reduce regulatory burden where
possible. Please let us know of any further opportunities we should
provide to reduce the potential costs or increase potential benefits
while preserving the effective and efficient administration of the IDEA
Part B program.
During and after the comment period, you may inspect all public
comments about these proposed regulations by accessing Regulations.gov.
You also may inspect the comments, in person, in room 5104, Potomac
Center Plaza, 550 12th Street, SW., Washington, DC, between the hours
of 8:30 a.m. and 4:00 p.m., Eastern time, Monday through Friday of each
week except Federal holidays.
Assistance to Individuals With Disabilities in Reviewing the Rulemaking
Record
On request, we will supply an appropriate aid, such as a reader or
print magnifier, to an individual with a disability who needs
assistance to review the comments or other documents in the public
rulemaking record for these proposed regulations. If you want to
schedule an appointment for this type of aid, please contact the person
listed under FOR FURTHER INFORMATION CONTACT.
Background
34 CFR Part 300 (Part B)
The regulations in 34 CFR part 300 implement Part B of IDEA. The
Department provides grants to States, outlying areas, and freely
associated States, as well as funds to the Department of the Interior,
to assist them in providing special education and related services to
children with disabilities. There are four key purposes of the Part B
regulations: (1) To ensure that all children with disabilities have
available to them a free appropriate public education (FAPE) that
emphasizes special education and related services designed to meet
their unique needs and prepare them for further education, employment,
and independent living; (2) to ensure that the rights of children with
disabilities and their parents are protected; (3) to assist States,
localities, educational service agencies, and Federal agencies in
providing for the education of all children with disabilities; and (4)
to assess and ensure the effectiveness of efforts to educate children
with disabilities.
The Part B regulations allow public agencies to use public benefits
or insurance (e.g., Medicaid) to provide or pay for services required
under Part B with the consent of the parent of a child who is enrolled
under the public benefits or insurance program. Public insurance is an
important source of
[[Page 60311]]
financial support for services required under Part B. With respect to
the use of public insurance, Sec. 300.154(d)(2)(iv)(A) specifically
provides that a public agency must obtain parental consent, consistent
with Sec. 300.9, ``each time that access to public benefits or
insurance is sought.''
We included this requirement when we amended the Part B regulations
in 2006 in recognition of two principles affecting the rights of
parents and children under Part B of IDEA. First, Part B of IDEA
requires that public agencies make available FAPE to all children with
disabilities. The definition of FAPE includes a requirement that
required services must be provided at no cost to the parent or child.
However, using public benefits or insurance could, in some cases,
result in costs to a parent or child. Accordingly, Sec.
300.154(d)(2)(i), (ii), and (iii) specify certain limitations on the
circumstances in which a public agency may use public benefits or
insurance to pay for special education and related services.
Second, in order to access a child's or parent's public benefits or
insurance, a public agency must disclose personally identifiable
information from the child's education records to the public benefits
or insurance program. These disclosures are protected by FERPA, and
section 617(c) of IDEA. Under FERPA, section 617(c) of IDEA, and Sec.
300.622, a child's education records cannot be released to a public
benefits or insurance program without parental consent, except for a
few specified exceptions. These exceptions do not include the release
of education records for billing purposes.
The ``confidentiality'' and ``no cost'' principles of FERPA and
IDEA continue to be of paramount importance, and we believe our Part B
regulations must continue to protect these important rights in the
context of permitting public agencies access to public benefits or
insurance in order to pay for services required by Part B. However,
since the adoption of Sec. 300.154(d)(2)(iv) in 2006, our experience
with implementing this provision suggests that we could improve this
regulation to protect parents' and children's interests.
First, while Sec. 300.154(d)(2) identifies the specific parameters
for public agencies regarding access to public benefits or insurance,
the regulations do not require that public agencies inform parents
specifically of most of these protections. The regulations also do not
require that parents be informed of their rights under FERPA and Sec.
300.622 in the context of a public agency's use of public benefits or
insurance. Yet information about the circumstances under which public
agencies can access public benefits or insurance to provide services
required under Part B and about parents' right to consent to, refuse to
consent to, or withdraw consent to disclosures of personally
identifiable information from their child's education records could be
very valuable to parents as they assess how a public agency may be
using their child's or their own public benefits or insurance.
Second, public agencies have continuing concerns about the meaning
of the phrase ``each time'' in Sec. 300.154(d)(2)(iv)(A). They also
have concerns about the overall costs and administrative burdens
imposed by requiring parental consent to access public benefits or
insurance in addition to the parental consent required by FERPA and the
parental consent required by IDEA for the initial evaluation of a child
with a disability and the initial provision of special education and
related services. On May 3, 2007, in response to several queries about
the meaning of the requirement that parental consent be obtained ``each
time that access to public benefits or insurance is sought,'' the
Office of Special Education Programs (OSEP) issued a memorandum to
State Directors of Special Education to clarify the parental consent
requirement in Sec. 300.154(d)(2)(iv)(A). OSEP Memorandum 07-10 (May
3, 2007). In that memorandum, OSEP clarified that obtaining informed
written consent from parents for billing a public benefits or insurance
program for a specified amount of services for a specified period of
time complies with the regulation. However, notwithstanding this
flexibility, SEAs and LEAs have continued to express concerns about the
significant administrative and financial burdens that they believe
Sec. 300.154(d)(2)(iv) imposes.
Significant Proposed Regulations
Methods of Ensuring Services (Sec. 300.154)
We propose to amend current Sec. 300.154(d)(2)(iv). Under the
proposed change, the public agency responsible for providing special
education and related services to a child would be required, before
accessing a child's or parent's public benefits or insurance, to
provide to the child's parents written notification consistent with
current Sec. 300.503(c). The notification would include: (1) A
statement that parental consent must be obtained under 34 CFR part 99
and Sec. 300.622 before the public agency discloses, for billing
purposes, their child's personally identifiable information to the
agency responsible for the administration of the State's public
benefits or insurance program (e.g., Medicaid); (2) a statement
repeating the no cost provisions in current Sec. 300.154(d)(2)(i)
through (iii); (3) a statement that the parents have the right under 34
CFR part 99 to withdraw their consent to disclosure of personally
identifiable information to the agency responsible for the
administration of the State's public benefits or insurance program
(e.g., Medicaid) at any time; and (4) a statement that withdrawal of
consent or refusal to provide consent under 34 CFR part 99 and Sec.
300.622 to disclosure of personally identifiable information to the
agency responsible for the administration of the State's public
benefits or insurance program (e.g., Medicaid) does not relieve the
public agency of its responsibility to ensure that all required
services are provided at no cost to the parents.
Thus, under these proposed regulations, the public agency would no
longer be required to obtain parental consent each time that it seeks
access to public benefits or insurance in order to provide a service to
a child. Public agencies would provide the written notification to
parents of children who receive special education and related services
prior to seeking access to the child's or parent's public benefits or
insurance. The exact timing and frequency of a public agency's
provision of the one-time written notification to the parent would be
at the discretion of the public agency, so long as the public agency
provides the notification before the public agency seeks access to the
child's or parent's public benefits or insurance.
We believe that this proposed amendment is in accordance with the
provisions in section 612(a)(12) of the Act, which provide that a State
must identify or have a method for defining the financial
responsibility of non-educational agencies for services required to
provide FAPE to children with disabilities and that the financial
responsibility of those agencies, including the State Medicaid agency
and other public insurers of children with disabilities, must precede
the financial responsibility of LEAs. Thus, the statute contemplates
that public agencies should, in appropriate circumstances, be accessing
public benefits and insurance programs as a means of paying for
services required under Part B.
The constraints on a public agency's use of public benefits or
insurance are related to two very important parent protections. First,
consistent with the definition of FAPE in section 602(9) of the Act,
services must be made available at public expense and without charge to
[[Page 60312]]
the child or the child's parents. Second, information in a child's
education records is protected under FERPA and section 617(c) of the
Act. Under FERPA and the regulations in Sec. 300.622 implementing
section 617(c), a child's education records cannot be released to a
State Medicaid agency without parental consent, except for a few
specified exceptions. These exceptions do not include the release of
education records for the purpose of billing a public or private
benefits or insurance program.
We are proposing these amendments to advance these critical parent
protections and to reduce unnecessary burden on a public agency's
ability to access public benefits or insurance in appropriate
circumstances. First, we are mindful of the importance of ensuring that
parents have sufficient information to make decisions about a public
agency's use of their public benefits or insurance and the disclosure
of their child's educational records for that purpose. Prior to the
publication of the Part B regulations in 2006, there was no
requirement, other than the parental consent requirements in FERPA and
an earlier version of current Sec. 300.622, which required that public
agencies obtain parental consent before accessing a child's or parent's
public benefits or insurance to pay for services necessary to make FAPE
available to a child. To ensure that those services would be made
available without cost to the child or the child's family, public
agencies were prohibited from requiring parents to (a) Sign up for or
enroll in a public benefits or insurance program and (b) incur out-of-
pocket expenses related to the public agency's use of the public
benefits or insurance. In addition, public agencies were prohibited
from using a child's benefits under a public benefits or insurance
program if that use would decrease available lifetime coverage or any
other insured benefit, result in the family paying for services that
would otherwise be covered and that are required for the child outside
of the time the child is in school, increase premiums or lead to the
discontinuation of insurance or benefits, or risk loss of eligibility
for home and community-based waivers based on aggregate health-related
expenditures.
These ``no cost'' provisions are stated in the current regulations
in Sec. 300.154(d)(2)(i), (ii), and (iii) (and we are not proposing
changes to them in this NPRM). Notwithstanding the importance of these
protections, however, the regulations that we issued in 2006 do not
require that parents be notified of these restrictions on a public
agency's ability to access public benefits or insurance for services
required under Part B. Furthermore, the current regulations do not
require that parents be informed of their rights to refuse to provide
consent or to withdraw consent for disclosures of personally
identifiable information from education records for access to public
benefits or insurance.
In reviewing the 2006 regulations, we have determined that
amendments are necessary to ensure parents are receiving the
information they need regarding their rights with respect to the use of
their public benefits or insurance for Part B services. We believe it
is very important that parents be provided information about the
limitations on a public agency's billing of public benefits or
insurance programs, as well as their rights under FERPA and section
617(c) of IDEA to consent prior to the disclosure of personally
identifiable information from education records, and to withdraw their
consent for such disclosures without penalty. This information would
help parents make informed decisions about, and monitor public
agencies' use of, public benefits and insurance used to provide
services for their child. Accordingly, through these proposed
regulations, we would specifically require public agencies to provide
this information to parents.
Second, these proposed amendments are designed to address the
concern expressed to the Department by many SEA personnel and other
interested parties that, since the publication of the Part B
regulations in 2006, the inability to obtain parental consent has
contributed to public agencies' failure to claim all of the Federal
financial assistance available for individualized education program
(IEP) services covered under Medicaid. In addition, public agencies
have expressed concern over using limited resources and the significant
administrative burden to obtain parental consent for the use of
Medicaid and other public benefits or insurance each time that access
to public benefits or insurance is sought. Consequently, many of these
parties have requested that the Department remove the parental consent
requirement in current Sec. 300.154(d)(2)(iv).
The results of the National Alliance for Medicaid in Education,
Inc. (NAME)'s 2009 Biennial Survey Trends and Data, which collects
information from SEAs, LEAs, and State Medicaid agencies on the use of
Medicaid in education, support States' concerns. (See: http://medicaidforeducation.org/) As part of this 2009 survey, NAME identified
the fiscal impact of Sec. 300.154(d)(2)(iv) as one of the key factors
adversely affecting LEAs' use of public benefits or insurance to help
pay for special education and related services. NAME provided summary
responses from a few specific school districts surveyed indicating that
the regulation requiring parental consent to bill Medicaid each time
that access to public benefits or insurance is sought had a direct
negative effect on an LEA's ability to bill Medicaid for Part B
services on students' IEPs. For example, one LEA reported to NAME that
the regulation requiring parental consent to bill Medicaid each time
that access to public benefits or insurance is sought precluded the LEA
from claiming approximately 70 percent of the Federal Medicaid
financial participation available for covered IEP services for about
6,800 of its students. One school district reported foregoing Medicaid
reimbursements totaling $1.5 million in school year 2008-2009 and
$507,000 in school year 2009-2010, rather than incur the expense of
obtaining parental consent to bill Medicaid. Additionally, in the NAME
2009 survey, one SEA estimated that overall statewide reimbursements
were 20 to 23 percent lower than projected due to ``parental consent to
bill'' issues.
School districts also provided to NAME examples of the
administrative burden caused by the consent requirement. For example,
they pointed out that the process for following up with parents to
obtain parental consent is very laborious and time consuming. Staff
must first identify those IEPs that lack parental consent, confirm
parents' addresses, and conduct home visits in order to obtain consent
when necessary. At a cost of $4,075, one school district reportedly
sent out more than 5,200 requests to parents for consent to bill
Medicaid. The district received responses from only about 30 percent of
those parents. Another school district reported to NAME that, in
addition to lost Federal match dollars, the regulation cost the LEA
nearly $15,000 in postage in the previous school year to send out
parental consent forms, more than half of which were not completed and
returned.
Since 2006, we have encouraged public agencies to use children's
public benefits or insurance to the extent possible to help pay for
some of the costs of providing special education and related services.
Section 612(a)(12) of IDEA recognizes that public benefits or insurance
are important resources for LEAs and other public agencies to access,
when appropriate, to assist in meeting their obligation to make FAPE
available to all children who are eligible to receive services under
IDEA. While the examples provided to NAME of
[[Page 60313]]
decreases in Medicaid reimbursement cannot be directly attributed
solely to the parental consent provision in current Sec.
300.154(d)(2)(iv), it appears that the parental consent provision has
taxed resources and created significant administrative burden on public
agencies.
Given the importance of public agencies maximizing the financial
resources available in order to make FAPE available, and given the
difficulty they are experiencing in obtaining parental consent under
current Sec. 300.154(d)(2)(iv), we believe replacing this consent
requirement with a written notification requirement will assist public
agencies by facilitating reimbursement through Medicaid or other public
benefits or insurance programs. We also believe that written
notification will continue to protect the rights of children with
disabilities to receive FAPE and the privacy rights of children and
parents. While we believe the proposed regulations will provide
administrative and financial relief to some public agencies (SEAs and
LEAs), we recognize these benefits may increase costs for public
agencies responsible for administering public benefits or insurance
programs. We invite comments on the impact the proposed regulations may
have on public benefits or insurance programs.
The proposed revisions to Sec. 300.154(d)(2)(iv) are also
consistent with the President's January 18, 2011, Executive Order 13563
entitled ``Improving Regulation and Regulatory Review'' and February
28, 2011, memorandum to executive departments and agencies entitled
``Administrative Flexibility, Lower Costs, and Better Results for
State, Local, and Tribal Governments.'' These documents direct each
Federal executive department and agency to periodically review its
existing significant regulations to determine whether any such
regulations should be modified, streamlined, expanded, or repealed so
as to make the department's or agency's regulatory program more
effective or less burdensome in achieving the regulatory objectives.
These proposed amendments to the Part B regulations would address
concerns raised by SEAs and LEAs regarding the burdens imposed by
current Sec. 300.154(d)(2)(iv)(A), while protecting the rights of
parents and children and ensuring that children with disabilities
receive FAPE. Accordingly, we believe the proposed revisions in Sec.
300.154(d)(2)(iv) further the President's directive to reduce the
burden on States and other entities.
In sum, under the proposed amendments to Sec. 300.154(d)(2)(iv),
public agencies would no longer be required to obtain separate parental
consent prior to seeking to bill or otherwise access the Medicaid or
other public benefits or insurance programs in which a child
participates to provide or pay for services required under Part B of
the Act. Instead, public agencies would be required to provide written
notification, consistent with current Sec. 300.503(c), to the child's
parents that includes: (1) A statement that parental consent must be
obtained under 34 CFR part 99 and Sec. 300.622 before the public
agency discloses, for billing purposes, their child's personally
identifiable information to the agency responsible for the
administration of the State's public benefits or insurance program
(e.g., Medicaid); (2) a description of the no cost provisions in Sec.
300.154(d)(2)(i), (ii), and (iii); (3) a statement that the parents
have the right under 34 CFR part 99 to withdraw their consent to
disclosure of personally identifiable information to the agency
responsible for the administration of the State's public benefits or
insurance program (e.g., Medicaid) at any time; and (4) a statement
that withdrawal of consent or refusal to provide consent under 34 CFR
part 99 and Sec. 300.622 to disclosure of personally identifiable
information to the agency responsible for the administration of the
State's public benefits or insurance program (e.g., Medicaid) does not
relieve the public agency of its responsibility to ensure that all
required services are provided at no cost to the parents.
Written notification may be provided to parents when it is most
appropriate and convenient for the family, but must be provided before
the State seeks to use the child's or parent's public benefits or
insurance; as a practical matter this may be at the child's initial IEP
meeting, when the parent consents to the initial provision of special
education services, at a parent-teacher conference, or at another time
when it is most convenient for the parent. We are interested in
receiving comments, however, on whether requiring the notification be
provided at a specific time or meeting, such as the initial IEP
meeting, would be desirable from the parents' or the LEA's perspective.
No other changes are being proposed to Sec. 300.154(d). Thus,
public agencies will continue to be subject to the requirements in
Sec. 300.154(d)(2)(i), (ii), and (iii), which states that the public
agency--(i) May not require parents to sign up for or enroll in public
benefits or insurance programs in order for their child to receive FAPE
under Part B of the Act; (ii) may not require parents to incur an out-
of-pocket expense such as the payment of a deductible or co-pay amount
incurred in filing a claim for services provided under Part B, but
pursuant to current Sec. 300.154(g)(2), may pay the cost that the
parents otherwise would be required to pay; and (iii) may not use a
child's or parent's benefits under a public benefits or insurance
program if that use would decrease available lifetime coverage or any
other insured benefit; result in the family paying for services that
would otherwise be covered by the public benefits or insurance program
and that are required for the child outside of the time the child is in
school; increase premiums or lead to the discontinuation of benefits or
insurance; or risk loss of eligibility for home and community-based
waivers, based on aggregate health-related expenditures. Additionally,
public agencies would continue to have to comply with the parental
consent requirements of FERPA and Sec. 300.622 prior to disclosing
personally identifiable information in educational records to Medicaid
or other public benefits or insurance programs. The following case
study illustrates what the different provisions in current regulations
and the proposed regulation would mean for the family of a child with a
disability:
Case Study for the Use of Public Insurance Under Part B of IDEA
Tommy is evaluated and determined eligible for special education
services. The IEP Team, which includes Tommy's parents, meets to
develop Tommy's IEP and identify the special education and related
services that Tommy needs. The IEP Team determines that, in addition to
special education services, Tommy needs related services including
physical therapy twice a week for 30 minutes and occupational therapy
once a week for 30 minutes. If Tommy needs a change in services, the
IEP Team, which includes his parents, must revise the IEP. [Note that
Tommy's parents and the school can agree not to convene an IEP Team
meeting for the purposes of making any changes, and instead, may
develop a written document to amend or modify Tommy's current IEP.]
Tommy is eligible for public insurance (i.e., Medicaid), but his
parents have not enrolled him in Medicaid. When his parents are asked
to give their consent to provide special education and related services
to Tommy, a member of the IEP Team may, but is not required to, explain
that Medicaid can help the school pay for Tommy's special education and
related services--specifically, that the school
[[Page 60314]]
can be reimbursed by Medicaid for some of the costs of Tommy's physical
and occupational therapy. The IEP Team asks Tommy's parents if they
would consider enrolling Tommy in Medicaid and makes clear that the
parents do not have to enroll Tommy in Medicaid in order to receive
services and that the services will be provided at no cost regardless
of their choice. Tommy begins receiving special education and related
services as outlined in his IEP.
Under the current Part B regulations: Tommy's parents enroll Tommy
in Medicaid and provide their consent for the school to provide Tommy's
personal information (e.g., name, birth date, special education
eligibility) to Medicaid so that the school can be reimbursed for some
of the physical and occupational therapy services it provides to Tommy.
Additionally, Tommy's parents provide their consent for the school to
bill Medicaid for the services described in Tommy's IEP. The IEP Team
explains to Tommy's parents that when they provide consent to bill the
Medicaid program, their consent to bill the Medicaid program is only
for the services outlined in Tommy's IEP for the period specified in
the IEP and that if Tommy's services or the cost of providing those
services change, the school would need to obtain their consent each
time services are revised or costs change in order to bill Medicaid.
[Note that the confidentiality and no-cost protections outlined below
are in the current regulations, but there is no requirement that
parents be informed of these protections as they relate to the use of
public benefits or insurance.]
Under the proposed regulations:
In order for the school to use Medicaid funds to pay for Part B
services, the following must occur:
(1) Tommy's parents must give their consent for the school to
provide Medicaid with Tommy's personal information (e.g., name, birth
date, special education eligibility).
(2) The school must provide Tommy's parents with a written notice
that informs them of the following:
(a) Consent is required and may be withdrawn. Parental consent must
be obtained before the school discloses, for billing purposes, a
child's personally identifiable information to Medicaid. Parents may
withdraw their consent to disclose personally identifiable information
to Medicaid at any time and thus prevent the school from billing
Medicaid. If the parents do not provide consent or withdraw consent,
the school must still provide IDEA services at no cost.
(b) No-cost protections. The school may not require parents to sign
up for or enroll in Medicaid. The school may also not require parents
to incur an out-of-pocket expense (e.g., deductible or co-pay) incurred
in filing a claim for services. Additionally, the school may not use a
child's Medicaid benefits if that use would (i) Decrease lifetime
coverage or any other insured benefit, (ii) result in the family paying
for services that would otherwise be covered by Medicaid and that are
required for the child outside of the time the child is in school,
(iii) increase premiums or lead to discontinuation of benefits or
insurance, or (iv) risk loss of eligibility for home and community-
based waivers. [These are referred to as the ``no cost protections'' in
current Sec. 300.154(d)(2)(i), (ii), and (iii).]
(c) Services will continue. If the parent does not enroll in
Medicaid under paragraph (b) above, does not provide consent, or
withdraws consent under paragraph (a) above, the school must still
provide special education and related services at no cost to the child
and parents.
The school would no longer be required, as under current Sec.
300.154(d)(2)(iv)(A), to obtain parental consent each time that it
seeks access to public benefits or insurance programs (which the
Department has interpreted to mean each time there is a change in the
services or cost of services billed to Medicaid or other public
benefits or insurance programs). Note, however, that if there is a
change in Tommy's services, Tommy's IEP Team, which includes his
parents, must revise the IEP. Changes to the IEP may be made either by
the entire IEP Team at an IEP Team meeting or the parents and the
school can agree not to convene an IEP Team meeting for the purposes of
making any changes, and instead, may develop a written document to
amend or modify Tommy's current IEP.
Executive Order 12866
Regulatory Impact Analysis
Under Executive Order 12866, the Secretary must determine whether
this regulatory action is ``significant'' and therefore subject to the
requirements of the Executive order and subject to review by OMB.
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action likely to result in a rule that may
(1) Have an annual effect on the economy of $100 million or more or
adversely affect a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or
tribal governments or communities in a material way (also referred to
as an ``economically significant'' rule); (2) create serious
inconsistency or otherwise interfere with an action taken or planned by
another agency; (3) materially alter the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raise novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive order.
We have reviewed Executive Order 12866 and determined that this is
a significant regulatory action under section 3(f)(4) of Executive
Order 12866.
The Department has also reviewed these regulations pursuant to
Executive Order 13563, published on January 21, 2011 (76 FR 3821).
Executive Order 13563 is supplemental to and explicitly reaffirms the
principles, structures, and definitions governing regulatory review
established in Executive Order 12866. To the extent permitted by law,
agencies are required by Executive Order 13563 to: (1) Propose or adopt
regulations only upon a reasoned determination that their benefits
justify their costs (recognizing that some benefits and costs are
difficult to quantify); (2) tailor their regulations to impose the
least burden on society, consistent with obtaining regulatory
objectives, taking into account, among other things, and to the extent
practicable, the costs of cumulative regulations; (3) select, in
choosing among alternative regulatory approaches, those approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts;
and equity); (4) to the extent feasible, specify performance
objectives, rather than specifying the behavior or manner of compliance
that regulated entities must adopt; and (5) identify and assess
available alternatives to direct regulation, including providing
economic incentives to encourage the desired behavior, such as user
fees or marketable permits, or providing information upon which choices
can be made by the public.
We emphasize as well that Executive Order 13563 requires agencies
``to use the best available techniques to quantify anticipated present
and future benefits and costs as accurately as possible.'' In its
February 2, 2011, memorandum (M-11-10) on Executive Order 13563,
improving regulation and regulatory review, the Office of Information
and Regulatory Affairs has emphasized that such techniques may include
``identifying changing future compliance costs that might result from
[[Page 60315]]
technological innovation or anticipated behavioral changes.''
We are issuing these regulations only upon a reasoned determination
that their benefits justify their costs and we selected, in choosing
among alternative regulatory approaches, those approaches that maximize
net benefits. Based on the analysis that follows, the Department
believes that these proposed regulations are consistent with the
principles in Executive Order 13563.
We also have determined that this regulatory action would not
unduly interfere with State, local, and tribal governments in the
exercise of their governmental functions.
1. Potential Costs and Benefits
Section 300.154(d)
Under current regulations, public agencies are required to obtain
informed written consent from parents to use a child's or parents'
public benefits or insurance to pay for services identified in the
child's IEP. Consent must be obtained for a specified type (e.g.,
physical therapy, speech therapy) and amount of services (e.g., number
of hours per week) for a specified period of time (e.g., a year). If
the type or amount of service changes, or if the amount charged for
services changes, the public agency must obtain parental consent
covering the change in services or costs to be charged to the child's
or parents' public benefits or insurance. Proposed changes to this
section would permit public agencies to use public benefits or
insurance programs in which a child participates to provide or pay for
services required under Part B of the Act without obtaining parental
consent each time it seeks access to those benefits or insurance,
provided that parental consent requirements imposed under FERPA and
Sec. 300.622 are met and written notification has been provided to
parents. These changes would allow public agencies to save the
administrative and postage costs necessary to obtain written consent
from parents, but they would add a requirement that public agencies
provide a written notification to parents prior to accessing public
insurance funds to inform them of their rights and protections under
the Act. We estimate that the proposed changes to Sec. 300.154 would
result in a net cost savings and provide an economic benefit to a
number of LEAs in many States.
Savings from reduction in current requirements:
Although there are no direct data on the number of children who
participate in both IDEA Part B and public benefits or insurance
programs, a Congressional Research Service (CRS) report indicates that
at least 25 percent of children receiving services under IDEA are
eligible for Medicaid services (including children that are eligible
but not enrolled in Medicaid).\1\ For this analysis, we assume that 20-
30 percent of the 6,614,000 students enrolled in the Part B program are
also enrolled in public benefits or insurance programs for a total of
1,322,800 to 1,984,200 children enrolled in both programs. Some LEAs do
not use public benefits or insurance to pay for services that are
eligible for reimbursement; however, there are no direct data on the
number of these LEAs or the number of eligible students enrolled in
these LEAs. We assume that all LEAs seek parental consent for all
students enrolled in both programs. As a result, our analysis likely
overestimates the percentage of students enrolled in both programs that
would need parental consent.
---------------------------------------------------------------------------
\1\ U.S. Congressional Research Service. Individuals with
Disabilities Education Act (IDEA) and Medicaid (RL31722; Jan. 31,
2003), by Richard Apling and Elicia Herz.
---------------------------------------------------------------------------
Under current regulations, we assume that consent must be obtained
1.2 times per year. This results in a total estimate of 1,587,360 to
2,381,040 consent requests per year for 1,322,800 to 1,984,200
children. If we assume that the forms are no more than 4 pages long and
that it takes approximately 5-10 minutes of administrative time to
draft and print these forms for each consent request (forms must be
tailored to the specific services and duration of services as specified
in the child's IEP), the cost would be approximately $5,386,000 to
$15,683,000 annually.\2\
---------------------------------------------------------------------------
\2\ Assumes the cost of administrative time is $48.90 per hour
based on the median wage of a special education teacher in 2009 of
$36.22, as reported in the National Compensation Survey (http://www.bls.gov/ncs/ocs/sp/nctb1479.pdf), with benefits valued at
approximately 35 percent of the wage.
---------------------------------------------------------------------------
We assume that in most cases (50-75 percent), parents respond to a
request for consent during a child's IEP meeting (either annual or
following a change in the IEP) and that in cases where a response is
not obtained during an IEP meeting (25-50 percent) (or the agency and
parents agree to make a change in the IEP without convening an IEP
meeting as statutorily permitted), public agencies mail forms directly
to parents to be completed and returned. In cases where consent is
requested during an IEP meeting, we assume that there are 5
participants (one special education teacher, one general education
teacher, one psychologist, one school representative, and one parent)
with average earnings of $44.87 per hour in wages and benefits.\3\
Assuming it takes on average one minute to obtain a response, the
additional estimated cost of obtaining a response during an IEP meeting
would be $2,967,000 to $6,677,000 annually.
---------------------------------------------------------------------------
\3\ Median wages of participants, excluding the parent, were
obtained from the National Compensation Survey (http://www.bls.gov/ncs/ocs/sp/nctb1479.pdf). This calculation uses the Federal minimum
wage of $7.50 per hour to account for the cost of a parent's time.
---------------------------------------------------------------------------
In cases where it is necessary to send consent forms to parents by
mail, public agencies would incur additional administrative, postage,
and material costs. We assume that 25-50 percent of parents will
receive consent forms sent via mail, that only 30-50 percent of those
recipients will respond to any particular letter request, and that a
maximum of 3 letters are sent to any particular parent for a total
694,470 to 2,607,239 letters sent. We assume that the postage cost of
sending each form would be $0.44, each envelope would be $0.10, and
each 4-page form would be $0.20. In addition, parents responding to
consent requests would need to provide return postage of $0.44 and
$0.10 for a return envelope. We estimate a total postage and materials
cost of $574,791 to $2,254,521.\4\ We estimate that it takes
approximately 10-15 minutes of administrative time to track the
addresses of parents who have not provided a response, mail forms to
parents, and process responses, and an additional 5 minutes for parents
to respond to a consent request for a total time cost of $3,391,521 to
$15,182,363.\5\ Thus, we estimate that the total costs incurred under
the current regulations and thus, the gross savings of the proposed
changes to this section would be $15,303,000 to $41,471,000 annually.
---------------------------------------------------------------------------
\4\ Amounts shown are the additional postage and material costs
of sending forms via mail; the cost of the first form copy is not
included.
\5\ Assumes the cost of administrative time is $48.90 per hour
based on the median wage of a special education teacher in 2009 of
$36.22, as reported in the National Compensation Survey (http://www.bls.gov/ncs/ocs/sp/nctb1479.pdf), with benefits valued at
approximately 35 percent of the wage. This calculation uses the
Federal minimum wage of $7.50 per hour to account for the cost of a
parent's time.
---------------------------------------------------------------------------
Costs of additional requirements:
The proposed changes to Sec. 300.154(d) would permit public
agencies to access a child's or parent's public benefits or insurance
if the public agency provides written notification to the child's
parents prior to accessing public benefits or insurance funds to inform
them of their rights and protections under the Act.
Proposed section 300.154(d)(2)(iv) would specify that this written
notification must include: (1) A
[[Page 60316]]
statement that parental consent must be obtained under 34 CFR part 99
and Sec. 300.622 before the public agency discloses, for billing
purposes, their child's personally identifiable information to the
agency responsible for the administration of the State's public
benefits or insurance program (e.g., Medicaid); (2) A statement of the
``no cost'' provisions in Sec. 300.154(d)(2)(i) through (iii); (3) A
statement that the parents have the right under 34 CFR part 99 to
withdraw their consent to disclosure of personally identifiable
information to the agency responsible for the administration of the
State's public benefits or insurance program (e.g., Medicaid) at any
time; and (4) A statement that withdrawal of consent or refusal to
provide consent under 34 CFR part 99 and Sec. 300.622 to disclosure of
personally identifiable information to the agency responsible for the
administration of the State's public benefits or insurance program
(e.g., Medicaid) does not relieve the public agency of its
responsibility to ensure that all required services are provided at no
cost to the parents.
We do not expect the requirements for notification to have a
significant cost impact. While the notification must be provided to
parents before the public agency may use the public benefits or
insurance to pay for Part B services, the timing of the written
notification is otherwise left to the discretion of the public
agencies. In many instances, public agencies would have an opportunity
to provide this notification, either by mail or in person, in
conjunction with other required documentation or activities and would
incur only the additional cost of photocopying the notification.
Although the specific format and content may vary by State, we
estimate that it would take no more than 10 hours per State to draft a
written notice that complies with these requirements and that the
notice would not exceed 4 pages in length. Although the notification
requirement rests with LEAs, we assume States will choose to create a
standard notice in order to increase efficiency and address any
applicable State laws.
According to the National Compensation Survey from the Bureau of
Labor Statistics, the median hourly wage for lawyers employed full-time
in State or local government is $38.46.\6\ With benefit costs of
approximately 35 percent, we estimate that the cost per State of
drafting this notice would be no more than $520, for a national cost of
approximately $31,000.
---------------------------------------------------------------------------
\6\ http://www.bls.gov/ncs/ocs/sp/nctb1479.pdf.
---------------------------------------------------------------------------
Assuming all LEAs need to prepare notifications and that it would
take approximately 30 minutes for an administrative assistant to obtain
and modify an existing notice for each LEA, the total cost of preparing
notifications would be $196,000.\7\ If the written notification is
assumed to be no more than 4 pages long, then the cost of photocopying
this document for the estimated 1,322,800 to 1,984,200 children who
participate in both Part B and a public benefits or insurance program
would be approximately $265,000 to $397,000 upon adoption of these
changes. Assuming notification is provided once for each child over the
course of his/her K-12 education, the annual cost of providing these
notifications would be $20,000 to $31,000.
---------------------------------------------------------------------------
\7\ Assumes the cost of administrative time is $23.96 per hour
based on the median wage of secretaries and administrative
assistants in 2009 of $17.75, as reported in the National
Compensation Survey (http://www.bls.gov/ncs/ocs/sp/nctb1479.pdf),
with benefits valued at approximately 35 percent of the wage. The
number of LEAs is assumed to be 16,330 as reported by the NCES
(Schools and Staffing Survey, ``Public School District Data File,''
2007-08).
---------------------------------------------------------------------------
In some instances, public agencies would be unable to provide this
written notification in conjunction with other mailings or in person
and would need to provide written notification by mail separately. We
assume that sending written notification by mail is required for half
of the eligible children and that the cost of each notification would
be $0.74.\8\ The resulting additional cost of mailing these
notifications would be an estimated $357,000 to $536,000 upon adoption
of the proposed changes and $27,000 to $41,000 annually thereafter.
This would result in a total cost of $849,000 to $1,159,000 upon
adoption of the proposed changes and $48,000 to $72,000 annually
thereafter.
---------------------------------------------------------------------------
\8\ The assumed cost of mailing a notification includes $0.20
for 4 sheets of paper, $0.44 in postage, and $0.10 for an envelope.
---------------------------------------------------------------------------
After accounting for additional notification costs resulting from
the proposed changes, the net savings upon adoption of these changes
would be $14,144,000 to $40,622,000 in the first year after adoption
and then $15,231,000 to $41,423,000 annually thereafter.
2. Clarity of the Regulations
Executive Order 12866 and the Presidential memorandum on ``Plain
Language in Government Writing'' require each agency to write
regulations that are easy to understand.
The Secretary invites comments on how to make these proposed
regulations easier to understand, including answers to questions such
as the following:
Are the requirements in the proposed regulations clearly
stated?
Do the proposed regulations contain technical terms or
other wording that interferes with their clarity?
Does the format of the proposed regulations (use of
headings, paragraphing, etc.) aid or reduce their clarity?
Would the proposed regulations be easier to understand if
we divided them into more (but shorter) sections? (A ``section'' is
preceded by the symbol ``Sec. '' and a number heading; for example,
Sec. 300.154, regarding methods of ensuring services.)
Could the description of the proposed regulations in the
SUPPLEMENTARY INFORMATION section of this preamble be more helpful in
making the proposed regulations easier to understand? If so, how?
What else could we do to make the proposed regulations
easier to understand?
To send any comments that concern how the Department could make
these proposed regulations easier to understand see the instructions in
the ADDRESSES section of the preamble.
Regulatory Flexibility Act Certification
The Secretary certifies that these proposed amendments to the
regulations governing the Assistance to States for the Education of
Children with Disabilities program, if finalized, would not place
unnecessary burdens on small businesses and organizations. In fact,
small entities such as small LEAs would benefit from the proposed
changes to the Assistance to States for the Education of Children with
Disabilities program, because these entities would experience less
burden when accessing Medicaid or other public benefits or insurance
programs to appropriately pay for services under Part B of the Act.
Paperwork Reduction Act of 1995
These proposed regulations contain information collection
provisions that are subject to review by OMB under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501-3520). A description of the
information collection is given below with an estimate of the annual
record keeping burden.
The proposed regulations include one information collection
requirement associated with proposed Sec. 300.154. Under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507d), the Department has submitted a
copy of this section to
[[Page 60317]]
OMB for its review. Interested persons are requested to send comments
regarding the information collection to the Department of Education
within 30 days after publication of these proposed regulations. This
comment period does not affect the deadline for public comments
associated with this proposed regulation.
Collection of Information: State and Local Educational Agency
Record Keeping, Notification, and Reporting Requirements under Part B
of the Individuals with Disabilities Education Act (Information
Collection 1820-0600). Proposed Sec. 300.154(d)(2)(iv) will be added
to this currently approved collection. The Act requires SEAs and LEAs
to gather, maintain, report, and disclose various information and data,
but the Act does not require this information and data to be submitted
to the Department.
Under proposed Sec. 300.154(d)(2)(iv), each LEA must provide a
written notification to parents prior to accessing a child's or
parent's public benefits or insurance. We assume that each SEA will
develop a model notice that its LEAs can use and that it will take an
average of about 10 hours to draft the notice for each of the 60
grantees funded under Part B of IDEA, representing a total burden of
600 hours. We further estimate that as an uppermost bound it will take
an additional 8,165 hours for LEA staff to obtain and modify an
existing model notification, based on not more than 30 minutes for each
of the 16,330 LEAs. However, we would expect that most LEAs will simply
use the model from its SEA. Therefore, we estimate the one-time burden
for the first year of implementation of this notification requirement
to be not more than 8,765 hours. With the addition of the burden to
SEAs and LEAs associated with proposed Sec. 300.154, the total annual
record keeping and notification burden for this collection of
information is estimated to be approximately 521,491 hours for the
104,038 separate responses from SEAs and LEAs.
Consistent with the earlier discussion, the following chart
describes the sections of the proposed regulations involving
information collections, the information being collected, and the
collections the Department will submit to OMB for approval and public
comment under the Paperwork Reduction Act.
------------------------------------------------------------------------
Collection
Regulatory section information Collection
------------------------------------------------------------------------
Sec. 300.154(d)........... Requires that Information
parents receive a collection 1820-
written 0600 ``State and
notification prior Local Educational
to LEAs accessing a Agency Record
child's or parent's Keeping,
public benefits or Notification, and
insurance. Reporting
Requirements under
Part B of the
Individuals with
Disabilities
Education Act.''
------------------------------------------------------------------------
If you want to comment on the proposed information collection
requirements, please send your comments to the Office of Information
and Regulatory Affairs, OMB, Attention: Desk Officer for U.S.
Department of Education. Send these comments by e-mail to OIRA_Submission@omb.eop.gov or by fax to (202)395-6974. Commenters need only
submit comments via one submission medium. You may also send a copy of
these comments to the Department contact named in the ADDRESSES section
of this preamble.
We consider your comments on this proposed collection of
information in--
Deciding whether the proposed collection is necessary for
the proper performance of our functions, including whether the
information will have practical use;
Evaluating the accuracy of our estimate of the burden of
the proposed collection, including the validity of our methodology and
assumptions;
Enhancing the quality, usefulness, and clarity of the information
we collect; and
Minimizing the burden on those who must respond. This
includes exploring the use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology; e.g., permitting electronic submission of
responses.
OMB is required to make a decision concerning the collection of
information contained in these proposed regulations between 30 and 60
days after publication of this document in the Federal Register.
Therefore, to ensure that OMB gives your comments full consideration,
it is important that OMB receives the comments within 30 days of
publication. This does not affect the deadline for your comments to us
on the proposed regulations.
Requests for copies of the submission for OMB review may be
accessed from http://edicsweb.ed.gov by selecting the ``Browse Pending
Collections'' link. When you access the information collection, click
on ``Download Attachments'' to view. Written requests for information
should be addressed to U.S. Department of Education, 400 Maryland
Avenue, SW., LBJ, room 2W115, Washington, DC 20202-4537. Requests may
also be electronically mailed to the Internet address
ICDocketMgr@ed.gov or faxed to (202) 401-0920.
Intergovernmental Review
This program is subject to Executive Order 12372 and the
regulations in 34 CFR part 79. One of the objectives of the Executive
order is to foster an intergovernmental partnership and a strengthened
federalism by relying on processes developed by State and local
governments for coordination and review of proposed Federal financial
assistance.
This document provides early notification of the Department's
specific plans and actions for this program.
Assessment of Educational Impact
In accordance with section 411 of the General Education Provisions
Act, 20 U.S.C. 1221e-4, the Secretary particularly requests comments on
whether these proposed regulations would require transmission of
information that any other agency or authority of the United States
gathers or makes available.
Electronic Access to this Document: The official version of this
document is the document published in the Federal Register. Free
Internet access to the official edition of the Federal Register and the
Code of Federal Regulations is available via the Federal Digital System
at: http://www.gpo.gov/fdsys. At this site you can view this document,
as well as all other documents of this Department published in the
Federal Register, in text or Adobe Portable Document Format (PDF). To
use PDF you must have Adobe Acrobat Reader, which is available free at
the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at: http://www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
[[Page 60318]]
(Catalog of Federal Domestic Assistance Number 84.027, Assistance to
States for Education of Children with Disabilities)
List of Subjects in 34 CFR Part 300
Administrative practice and procedure, Education of individuals
with disabilities, Elementary and secondary education, Grant programs--
education, Privacy, Private schools, Reporting and recordkeeping
requirements.
Dated: August 31, 2011.
Arne Duncan,
Secretary of Education.
For the reasons discussed in the preamble, the Secretary proposes
to amend title 34 of the Code of Federal Regulations as follows:
PART 300--ASSISTANCE TO STATES FOR THE EDUCATION OF CHILDREN WITH
DISABILITIES
1. The authority citation for part 300 continues to read as
follows:
Authority: 20 U.S.C. 1221e-3, 1406, 1411-1419, unless otherwise
noted.
2. Section 300.154 is amended by revising paragraph (d)(2)(iv).
The revision reads as follows:
Sec. 300.154 Methods of ensuring services.
* * * * *
(d) * * *
(2) * * *
(iv) Prior to accessing a child's or parent's public benefits or
insurance, must provide written notification, consistent with Sec.
300.503(c), to the child's parents. The notification must include--
(A) A statement that parental consent must be obtained under 34 CFR
part 99 and Sec. 300.622 before the public agency discloses, for
billing purposes, their child's personally identifiable information to
the agency responsible for the administration of the State's public
benefits or insurance o program (e.g., Medicaid);
(B) A statement of the ``no cost'' provisions in Sec.
300.154(d)(2)(i)-(iii);
(C) A statement that the parents have the right under 34 CFR part
99 to withdraw their consent to disclosure of personally identifiable
information to the agency responsible for the administration of the
State's public benefits or insurance program (e.g., Medicaid) at any
time; and
(D) A statement that withdrawal of consent or refusal to provide
consent under 34 CFR part 99 and Sec. 300.622 to disclosure of
personally identifiable information to the agency responsible for the
administration of the State's public benefits or insurance program
(e.g., Medicaid) does not relieve the public agency of its
responsibility to ensure that all required services are provided at no
cost to the parents.
* * * * *
[FR Doc. 2011-22784 Filed 9-27-11; 8:45 am]
BILLING CODE 4000-01-P