A private equity firm has invested in a software company that helps school districts track special education services and claim federal Medicaid funds. The transaction points to the heavy administrative burden schools face when trying to fund legally mandated student therapies.
What Happened
Resurgens Technology Partners, an Atlanta-based private equity firm, has completed an investment in Relay, a provider of K-12 special education and Medicaid workflow software, according to market data from Dealroom.co. Founded in 1993, Relay helps school districts coordinate, document, and bill for health services across more than 20 states.
The financial terms of the deal were not disclosed, according to the official press release on Business Wire. The investment is the ninth platform acquisition from Resurgens' $500 million second fund, which closed in 2022. Resurgens plans to work directly with Relay’s management team to develop the product, expand its marketing efforts, and enter new geographic markets.
The Bigger Picture
Medicaid is a major financial resource for public education, representing the fourth-largest source of federal funding for school districts and injecting an estimated $7.5 billion annually into school health systems. However, capturing these federal dollars is highly complex. Because Medicaid is a joint federal and state program, billing compliance rules, covered services, and eligibility guidelines vary significantly from state to state.
For example, districts in Pennsylvania operate under the "School-Based ACCESS Program," while districts in California must use the "Local Educational Agency Medi-Cal Billing Option Program." This fragmented system requires schools to manage tedious workflows, including parental consent forms, professional license verifications, and clinical hour documentation.
When tracking systems break down, school districts lose millions of dollars. A follow-up audit from the Office of the New York City Comptroller revealed that New York City Public Schools failed to claim an estimated $431.6 million in Medicaid revenue over three fiscal years because of administrative failures in collecting paperwork. Auditors found no record of nearly 20% of mandated therapy services the city was required to provide. Similarly, administrative gaps cause Pennsylvania's lower-performing school districts to leave more than $75 million unclaimed annually compared to top-performing peers.
While some educational technology investors are pulling back from classroom software due to contracting school budgets and economic shifts, back-office administrative tools that secure school funding remain attractive to private equity. As we previously reported, the ongoing transfer of edtech platforms to private equity ownership makes robust data privacy standards essential, since these administrative platforms house sensitive student medical and educational records.
What This Means for Families
Under the Individuals with Disabilities Education Act (IDEA), school districts must deliver all health-related services outlined in a student's Individualized Education Program (IEP). According to the Idaho Department of Health and Welfare, this mandate remains absolute regardless of whether the school bills Medicaid or whether a family denies consent to bill.
Even so, administrative struggles directly harm students. When schools lack efficient tracking tools, therapists spend more time on paperwork and less time with children. When districts miss out on millions of dollars in federal reimbursement, budget deficits force schools to cut other important health offerings, such as school counselors and mental health programs.
What You Can Do
Parents can ask the school's special education coordinator for regular service delivery logs to verify that their child is receiving the therapies outlined in their IEP.
When asked to sign a Medicaid billing consent form, remember that your child's services are guaranteed by law. Giving or denying consent will not change their access to mandated therapy.
Families can also attend school board meetings and ask district leadership how they track clinical documentation. Efficient administrative tools protect public school budgets, ensuring federal funds support local classrooms.