CHEYENNE – Wyoming could soon join the rest of the country and use Medicaid to cover K-12 special education services, and the new funding model could get a test run in Laramie County School District 1.

Under the proposed setup, Wyoming’s 48 school districts would be able to request reimbursements through Medicaid for services like speech therapy that are provided to students in special education programs.

Historically, the state has reimbursed districts for 100% of the costs to provide special education services. But it approved a spending cap in 2018 that kept the state’s reimbursements tied to the amount districts spent in previous years.

State lawmakers on the Joint Appropriations Committee discussed legislation Monday morning that would set in motion the necessary changes to implement the shift. However, they ultimately took no action on the bill.

Estimates show Wyoming would gain roughly $2 million annually in Medicaid funding during the first biennium of implementation, with that amount growing to $2.7 million by the third year. Meanwhile, the bill would require $550,000 from the School Foundation Account to get a billing system set up in the state Department of Education.

Committee co-chairman Rep. Bob Nicholas, R-Cheyenne, noted the longer the state doesn’t gain Medicaid reimbursements, the more money it could lose in the future.

“You continue to be the outlier and don’t do it, then (when) additional programs come online through Medicaid and Medicare, we don’t qualify for those,” Nicholas said. “At the end of the day, we could be passing up a lot more dollars.”

LCSD1 Superintendent Boyd Brown confirmed the district has been in talks with the state about acting as a pilot location for the program. He said the new billing setup would require several changes to how the district works with state and federal entities.

“If it doesn’t work with the larger districts, it probably wouldn’t be very successful with the smaller ones,” Brown said. “So we were just looking to partner with the Legislature, the Department of Health and the Department of Education to see if we can make things work a little smoother.”

Brown said while the specifics remain unclear, either the district or the state would need additional staffing to handle the administrative burdens associated with the change. That staffing concern was shared by some lawmakers on the committee, especially as it relates to smaller school districts.

Yet other members felt the best route would be to begin a pilot program for the billing in one or a few districts while the state works out the kinks before implementing the statewide program.

“Wouldn’t it make more sense to put this together in the context of a single, motivated district to explore all of these issues, rather than try to do it with 48 districts at once?” asked Sen. Dave Kinskey, R-Sheridan.

Kinskey added most of the questions floated by lawmakers couldn’t be answered until the state begins discussions with the federal Centers for Medicare and Medicaid Services about how implementation would work.

“Why wouldn’t you take Laramie 1 up on their offer and just work with them and pilot it there and explore these issues in that context as you fashion a plan with CMS?” the senator asked.

The bill could be amended to limit implementation to one or a handful of specific school districts, though Wyoming Department of Education chief of staff Dicky Shanor noted some of the administrative costs would have to be paid, regardless of how many districts are in the program when it starts.

Lawmakers also discussed how state statute could limit the Department of Health’s ability to carry out some of the services it would be responsible for, which was a large source of their hesitation. Similarly, Brown said getting state requirements aligned with federal ones is the biggest barrier to getting the program off the ground.

“It may take up to 18 months to get that done,” Brown said.

At the end of discussion, Nicholas said it would make sense to make the program voluntary for certain school districts and recommended legislative staff work on a revised version of the bill.

“There’s not a lot of legs to this bill, and frankly, a lot of us don’t understand it and can’t articulate it,” Nicholas said.

Nicholas added regardless of what is done with the billing program, it should be carried out in tandem with the state’s ongoing efforts to recalibrate its funding model for K-12 education.

The Joint Appropriations Committee will continue to meet in the Capitol this week as it sorts through the state’s budget leading up to the legislative session, which begins Feb. 10.