Commonwealth of Massachusetts 
Executive Office of Health and Human Services 
Office of Medicaid 
600 Washington Street 
Boston, MA  02111 
www.mass.gov/masshealth 
 


  
 MassHealth 
 Municipally Based Health Services Bulletin 13 
 April 2008 
 

 TO: Municipally Based Health Service Providers Participating in MassHealth 
FROM: Tom Dehner, Medicaid Director 
 
 
 RE: Changes in Department of Education Placement Categories 
 
 
 


Background 
This bulletin provides instruction on the service codes and   
modifiers that municipal-based health-service providers participating in  
MassHealth should use with updated special-education placement  categories recently issued by the U.S. Department of Education (DOE) for  children aged three to five years, including the rates payable for these  codes. 
   
 
Changes   
The U.S. DOE changed the placement categories and their definitions for      
students aged three to five with disabilities for the 2006–2007 school      
year. The changes are effective for all school districts in the       
Commonwealth for the 2007-2008 school year. For your convenience,      
the table below lists the new placement categories, the service codes      
and modifiers for these categories, the code and modifier descriptions,      
and the corresponding rates.         
 
New DOE Placement Categories for Ages Three to Five for the ‘07-‘08 School Year 
 MassHealth Service Code and Modifier 
 Code Description 
 Modifier 
Description 
 Rate 
 
In regular early- childhood program 40% to 79% of the time 
 T1018-U1 
 School-based individualized education program (IEP) services, bundled 
 Use for full or partial inclusion program 
 $12.41/day 
 
In regular early-childhood program less than 40% of the time 
 T1018-U2 
 School-based individualized education program (IEP) services, bundled 
 Use for substantially separate classroom 
 $26.95/day 
 
Substantially separate class 
 T1018-U2 
 School-based individualized education program (IEP) services, bundled 
 Use for substantially separate classroom 
 $26.95/day 
 
New DOE Placement Categories for Ages Three to Five for the ‘07-‘08 School Year 
 MassHealth Service Code and Modifier 
 Code Description 
 Modifier 
Description 
 Rate 
 
Public separate day school 
 T1018-U3 
 School-based individualized education program (IEP) services, bundled 
 Use for day school 
 $50.62/day 
 
Private separate day school 
 T1018-U3 
 School-based individualized education program (IEP) services, bundled 
 Use for day school 
 $50.62/day 
 
Residential facility 
 T1018-U4 
 School-based individualized education program (IEP) services, bundled 
 Use for residential school, PL1 only or PL2, documenting cost-shared residential placement 
 $52.67/day 
 
In regular early- childhood program at least 80% of the time 
 T1018-U5 
 School-based individualized education program (IEP) services, bundled 
 Use for home-based or center-based early childhood program 
 $120.79/ week 
 





    
 
Questions If you have any questions about the information in this bulletin, please 
contact the University of Massachusetts Medical School at 
1-508-856-7640, or e-mail your inquiry to 
Schoolbasedclaiming@umassmed.edu.