Assistance to States for the Education of Children With Disabilities, 60310-60318 [2011-22784]

Agencies

• DEPARTMENT OF EDUCATION

[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 https://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 
https://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: https://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 (https://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 (https://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 (https://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\ https://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 (https://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 https://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: https://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: https://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