This Senate testimony regarding potential improprieties in Medicaid claims for school-based health services focuses on: (1) trends in Medicaid's spending for administrative costs; (2) the distribution of Medicaid payments for administrative claims to schools and other entities; and (3) the adequacy of federal oversight in approving school districts' claims for reimbursement. The testimony asserts that over the past 4 years, school districts' claims for administrative costs associated with school-based health services have increased five-fold, and that federal oversight of claims has been weak, permitting an environment for opportunism and inappropriate claims. Sections of the testimony include: (1) "Background" (Medicaid's reimbursement of school-based administrative services, previous financing mechanisms used by states and later prohibited in law); (2) "Medicaid Claims for Administrative Expenditures Have Increased Dramatically in Some States"; (3) "In Some States, Medicaid Funds to Reimburse Schools Go to State Treasuries and Private Firms"; (4) "Insufficient HCFA Guidance, Uneven Oversight Have Led to Questionable Practices for Claiming Reimbursement" (Broad HCFA guidance leaves payment determination largely to regional discretion; HCFA oversight fails to discourage suspect billing practices); and (5) "Concluding Observations." (EV)