Substitute Senate Bill No. 397, also known as File No. 337, is designed to broaden Medicaid coverage for school-based health care services in Connecticut. The bill seeks federal approval for a Medicaid waiver that would extend coverage to all students at Title I schools and those eligible for free or reduced-price lunches, without the need for eligibility under the Individuals with Disabilities Education Act or Medicaid income guidelines. It introduces an "opt out" form for parents or guardians who do not want their children to receive Medicaid-covered services and requires the dissemination of a list of Medicaid-reimbursable health care services to school boards. The bill also increases the grant payments to school boards for Medicaid claims from 50% to 80% of the federal portion and establishes an interagency coalition to maximize federal Medicaid funding for public school health services. The bill includes insertions and deletions to update fiscal references and percentages related to grant payments, with a fiscal impact of a $10.4 million revenue loss to the state and a corresponding gain to municipalities, and at least $100,000 in costs to the Department of Social Services.

The bill mandates that the Commissioner of Social Services, in consultation with the Commissioner of Education, develop an opt-out form in multiple languages and a list of Medicaid-eligible services for school health care. It also requires quarterly grant payments to school boards and an annual report on Medicaid reimbursements for school health services. An interagency coalition is established to coordinate efforts to maximize federal Medicaid funding for school health services, with required quarterly meetings and an annual report on the coalition's findings and actions. The bill increases the grant payments to school boards for Medicaid-eligible special education and related services from 50% to 80%, effective July 1, 2024, and the rest of the bill's provisions are effective upon passage.