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ISBE Responds to Pleas to Address Residential Placement Crisis for Illinois Students with Disabilities

For the last several school years, and specifically during the COVID-19 pandemic, schools have faced significant challenges in securing placements for students in residential facilities approved by the Illinois State Board of Education (“ISBE”). Due to the limited number of facilities approved for student placement pursuant to ISBE’s Part 401 rules, many students with significant academic, functional, and behavioral needs remain on lengthy waiting lists for residential placements with limited resources for interim programming. Per the current Part 401 rules, school districts are prohibited from placing students in a non-ISBE approved residential facility through the IEP process.

During the last five years, ISBE Hearing Officers issued several orders following due process hearings requiring school districts to place students in non-ISBE approved residential facilities at parent request. In response to these orders from the agency’s appointed hearing officers, ISBE historically reimbursed school districts for these non-approved placements. However, in February 2020, ISBE issued a memorandum denying prospective reimbursement to school districts for students placed in non-ISBE approved special education placements, even if ordered by an ISBE Hearing Officer, effective February 14, 2020.

In response to this residential placement crisis, the Illinois Council of School Attorneys sent a letter to ISBE on December 16, 2021, requesting ISBE reverse its February 2020 position and reimburse school districts for non-ISBE approved residential facilities. On January 10, 2022, ISBE sent a letter in response stating that, in order to provide short-term relief to school districts, ISBE is immediately reinstating its practice of reimbursing school districts for placements in non-ISBE approved residential facilities when ordered by an ISBE hearing officer. ISBE will not provide reimbursement to school districts if a student is placed on a non-approved residential facility pursuant to a settlement agreement or IEP team determination.

ISBE will retroactively reimburse school districts for hearing officer orders beginning in February 2020 moving forward. ISBE will release instructions for school districts on requesting reimbursement for qualifying orders in the coming weeks.

ISBE also made a recommendation to the Illinois Purchased Care Review Board (“IPCRB”) to file emergency and permanent rules regarding residential placements. Per ISBE’s January 10 letter, the emergency rules allow the IPCRB to waive the requirement that private facilities submit a certified audit and/or for a cost report if the number of students placed total 12 or fewer rather than fewer than six in the current rules. ISBE anticipates approved private facilities will accept more Illinois students under these emergency rules without needing to meet the additional audit and cost reporting requirements in the current regulations. Moreover, ISBE anticipates more non-approved facilities will seek ISBE approval under these emergency rules. ISBE recommends the IPCRB adopt this language through August 23, 2023. The IPCRB will vote on whether to accept ISBE’s recommendations regarding these emergency rules on February 1, 2022.

For questions or additional information on ISBE’s January 10, 2022, letter and its effect on residential facility placement and reimbursement, contact an attorney in our Student/Special Education practice group.