CMS stated that it was proposing to roll back the block, which had yet to be implemented by Congress, due to concerns about the adverse effects of the regulations.

“Elimination of Reimbursement Under Medicaid for School Administration Expenditures and Costs Related to Transportation of School-Age Children Between Home and School” was former U.S. Health and Human Services Secretary Mike Leavitt’s response to President Bush’s FY07 budget proposal that included a line item that would have eliminated alleged fraudulent claims of $3.6 billion over a five-year period.

The funds were originally designed to help states reimburse school district and other child care providers who transported Medicaid-eligible students to special services such as therapy and doctor visits. The alleged fraud was discovered by the Government Accountability Office, which said it found many instances of insufficient documentation on a student’s IEP or verification of service.

CMS cited potential restrictions on services available to beneficiaries, potential harmful effects on state partners in the current economic recession and a lack of evidence of fraudulent claims.

“Rescinding these provisions will permit further opportunity to determine the best approach to further the objectives of the Medicaid program in providing necessary health benefits coverage to needy individuals,” the NPRM states.

Comments may be submitted electronically by searching for docket number CMS-2287-P2 for the transportation services rule. The NPRM also covers two other regulations, CMS-2213-P2 for rescinding the Outpatient Services Definition Final Rule and CMS 2237-P on partial rescission of the Case Management Services Interim Final Rule.