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In page Medicaid:

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Medicaid also offers a Fee for Service (Direct Service) Program to schools throughout the United States for the reimbursement of costs associated with the services delivered to special education students.[4] Federal law mandates that every disabled child in America receive a "free appropriate public education." Decisions by the United States Supreme Court and subsequent changes in federal law make it clear that Medicaid must pay for services provided for all Medicaid-eligible disabled children.