NORTH COUNTY -- School districts across the state and nation could lose hundreds of thousands of dollars each in annual special education funding if a recently proposed federal rule to stop reimbursing them for Medicaid-related services takes effect next year, educators said last week.

The rule, proposed by the Centers for Medicare and Medicaid services, would prohibit school districts from receiving payments for transportation and administrative services -- including outreach programs, referrals to medical providers, counseling and monitoring -- that they provide to disabled children and their families who are eligible for Medicaid. The centers, part of the U.S. Department of Health and Human Services, is a federal agency that administers federal and state health insurance programs.

The federal government intends to save almost $4 billion over five years if the rule is enacted. The public has until Nov. 6 to comment on the proposal.

Local and state educators say the rule could result in a significant cut in professional development for teachers, and in the programs and services they offer special education students.

The amount the districts risk losing varies, said Suzi Rader, the director of district and financial services for the California School Boards Association.

Medicaid reimbursements to local school districts for the 2005-06 school year, the most recent year figures were available, ranged from $259,000 combined for Escondido's elementary and high school districts to about $127,000 for the Encinitas Union School District, she said.

The San Diego County Office of Education could lose the $745,000 it receives for the thousands of Medicaid-eligible students it serves, said Carolyn Nunes, its special education director. Officials say that the statewide loss could be enormous.

"I think most school districts are concerned about the cuts," said Kelly Prins, assistant superintendent of special education for the Escondido Union School District.

Prins said districts rely on the reimbursements to offer students expanded physical, occupational and speech therapy sessions and transportation to medical appointments, as well as providing parents with information on different programs and resources available to their children.

Some of the funds can also be used for staff development and training that is specifically geared toward improving such services, Prins said.

"It's not millions, but it's a good chunk, Prins said, adding that the loss of the reimbursements would force underfunded special education programs to rely more heavily on a district's general fund.

The federal government, which is supposed to fund 40 cents of every dollar a district spends on special education, currently only pays about 18 cents, Nunes said.

"If these funds are taken away, it's kind of another slap to us who are trying to serve our most needy students," Nunes said. "(Not receiving them) will definitely impact our families and our kids."

Federal officials said, however, that some districts are using part of their reimbursement money to help fund programs and transportation services that are not linked to Medicaid-related services.

The new regulation, they said, could save the government $3.6 billion over five years.

In justifying the cut in reimbursements, federal officials have said that the cost of transporting a student from home to school for therapy should be billed as an educational expense because students are not just receiving medical-related assistance when they're on campus.

Lucile Lynch, a special education parent in the Encinitas Union School District and a member of the North Coast Consortium for Special Education's executive board, disagreed.

Lynch said that offering special education therapies and services at school is more effective because it helps students learn skills to succeed away from home. Many students, including her son, she said, may do something easily at home that they cannot do initially at school.

"You come home and the environment is completely different," she said. "You have to be able to mimic the location and setting to know what you need to work on."

Another benefit of receiving occupational and speech therapy sessions at school, Lynch said, is that her 9-year-old son has been able to work on developing his speaking skills on a daily basis. Without this funding for the schools, she said, some districts will have fewer financial resources to hirer a speech therapist or to provide the materials needed for that repetition.

"He started in some of these speech programs not being able to talk," she said. "And now he is reading a full paragraph. … What these services have meant to us was the chance to have a somewhat independent life."

To comment on the rule change, published Sept. 7 in the Federal Register, visit www.cms.hhs.gov/eRulemaking. Comments are due by Nov. 6.

Contact staff writer Shayna Chabner at (760) 740-5416 or schabner@nctimes.com.

The Centers for Medicare and Medicaid Services is proposing to cut federal Medicaid reimbursements that schools get for certain special education programs. The cut in funding, $3.6 billion over five years, would eliminate:

• Reimbursements for administrative activities and services performed by school employees. Those activities include health services for disabled students who need preventative and rehabilitative services and/or speech, physical and occupational therapies; helping student and families find resources; and coordination and monitoring of medical care.

• Reimbursements for part of the cost of transportation for bringing Medicaid-eligible students to and from school on days when they are schedule to have health services, such as therapies. Also includes the cost of transporting students to outside providers.

Public comment will be accepted through Nov. 6.

To read the propose rule, go tohttp://www.cms.hhs.gov/MedicaidGenInfo/Downloads/CMS2287P.pdf