Some say Hamilton County Schools took a risk when the district became the first in the state to seek TennCare reimbursement for some special education services.
That move now is paying off locally and across the state as more districts join in.
Hamilton County Schools has so far collected about $1.6 million by having its contractor, Stellar Therapy Services, bill TennCare for some of its occupational therapy, physical therapy, audiology and speech language pathology services. That money goes back into the special education department, which officials say allows more students to receive more special education services.
Leaders in school districts across the state credit Hamilton County's success with giving them the confidence to pursue reimbursement, as well. So far at least 15 school systems are billing TennCare. And Stellar says school officials in the state's biggest districts in Memphis, Nashville and Knoxville are now looking to do the same.
That means big bucks for school systems. Stellar estimates the trend could free up tens of millions of dollars that districts could pump back into special education programs.
Wilson County Schools Special Education Director Jill Micco said her district's decision to pursue reimbursement had a lot to do with Hamilton County's results.
"I think that they are pioneers in this area," she said. "I think others would have liked to do it, but just didn't know how."
Wilson County has just started to receive reimbursement - about $1,000 so far. But Micco has been told to expect as much as $30,000 annually, which will help pay for services like occupational, physical and speech therapy.
When officials from Stellar met with Micco, they were able to show exactly how much Hamilton County had brought in. Stellar receives a percentage of all reimbursements for handling the administrative work.
"If they had said, 'Well, we're just starting this for the first time, I would have been much more hesitant," Micco said.
Holly Christopher, executive director of Chattanooga-based Stellar Therapy Services, said 47 states widely seek Medicaid reimbursements for special education services. But being a managed care state made it a much more difficult system for Tennessee districts to traverse. That's why Tennessee special education programs are turning to private companies like Stellar that have experience working in the complex world of Medicaid.
"It is administratively burdensome and prohibitive," Christopher said. "There is no way a district has the time, the personnel to do this."
In some states, schools statutorily are required to bill Medicaid for special education services, with departments of education providing clear guidance on such procedures. But in Tennessee, any such move has been from districts, not the state, Christopher said.
Working with an outside contractor puts extra cash in district coffers without using valuable staff time, said Tammy Hatfield, director of special education for Tullahoma City Schools. She, too, said Hamilton County's reimbursement trailblazing helped convince her of its merit.
"That had a lot to do with me feeling comfortable pursuing it," she said. "Knowing that Hamilton County could do it, I didn't see why we couldn't, as well."
Tullahoma is putting its reimbursement dollars - about $10,000 so far - toward staff training and to cover the cost of a consultant.
Hatfield said she felt as if she was stepping out on a limb when her district started the process last year. But now, it's becoming much more common.
"Now, every time I go to a state conference, this topic comes up," she said.