The request seemed modest at the time: could the family's ABA provider come in during the transition to kindergarten, just until the student settled? Three years later, the provider is still there, staff plan around her schedule, and the student's day is built partly on her work. The arrangement has quietly become load-bearing, and it is worth understanding what South Dakota Medicaid does — and does not — require of the school when private ABA happens in your building.
Quick note: if you’re a superintendent, principal or school board member and that introductory paragraph sounded like gibberish to you, maybe just forward this email to your special ed director. Read on if you love the sound we nerds make when we speak special ed to each other.
What South Dakota Medicaid actually says
ABA is not an eligible school-district service. Under the School District Services manual, the covered school-district services billable to Medicaid are limited to psychological, physical therapy, occupational therapy, speech therapy, audiology, and nursing services, each tied to a specific CPT code. ABA is not on that list, and school districts cannot bill Medicaid for it. When an agency operating a special education program provides a Medicaid-covered service that is not an eligible school-district service — the manual names ABA specifically — that agency may only enroll as a group of professionals and bill for the non-school-district services. So if ABA happens in your building and Medicaid pays for it, the billing pathway belongs to the outside provider, not the district.
FAPE runs through the IEP, not through Medicaid
Medicaid billing rules and IDEA obligations operate on separate tracks. FAPE means the services the IEP team determines the student needs to make appropriate progress; Medicaid is a funding mechanism that neither adds to nor subtracts from what the IEP must contain. The fact that South Dakota lets an outside ABA provider bill for services delivered in school says nothing about whether ABA is a required related service for any particular student. It does not declare that every district must provide ABA, and it does not make the provider's presence an IEP-team decision by default.
The harder question: you already let a private provider in
Many districts have permitted privately retained or Medicaid-funded ABA providers to work with students on campus — and South Dakota's rules make that permission allowable because the outside provider can bill directly without the school in the loop. Does that access concede that ABA is necessary for FAPE? Generally, no… but possibly yes. Access is not an admission, and allowing a parent-arranged provider into your building as a courtesy does not by itself establish that ABA is educationally necessary. But candidly, untangling whether a student's progress stems from ABA services in the school setting or from the numerous other interventions your district uses can prove difficult.
Additionally, how you've handled that access can create exposure. If the provider's services appear in the IEP, PWN, or meeting minutes, or if staff have built the student's daily programming around the provider, a parent can plausibly argue the district itself treated ABA as necessary for FAPE. That the provider bills Medicaid or the parent’s private insurance independently does not insulate you here — the risk lives in how the district treats the service, not in who cuts the check. You also run the risk that if the family’s health insurance or Medicaid eligibility cease, they will have a good argument that the school now must pay, because they will argue that you tacitly admitted that ABA was necessary for FAPE by allowing the provider into the building at all.
Going forward, route any parent request for a parent-selected ABA provider through the IEP team, which decides whether ABA services are necessary for FAPE. Even where the team determines they are, IDEA generally leaves personnel decisions to the district: the school chooses who delivers the services. Note the wrinkle South Dakota adds — because Medicaid recognizes the outside ABA provider, not the school, as the billing entity for school-based ABA, a district that concludes ABA is necessary for FAPE cannot assume Medicaid will fund the district's own delivery of it. That is a reason to think carefully at the IEP table, and to document the team's reasoning either way.
The throughline in all of this: don't make the decision based on the service, make it based on the kid. We can't forget the 'I' in IEP stands for individualized, and therefore the IEP team should consider the information. These situations rarely announce themselves until they're already problems, so if something in this post feels familiar, reach us at ksb@ksbschoollaw.com.