Most schools are HIPAA entities (at least in the regions I know), since they routinely bill Medicaid for school-provided services, such as nursing, counseling, or speech therapy. The clarification does help distinguish the exception for FERPA, though.
The transmission of disability-identifying information to selective public schools, however, is still highly questionable, as the receiving public school is not supposed to discriminate on the basis of disability in its admissions. I've worked for such a school, and the DOE has clearly indicated to us that, while we may ask about disability status during admissions, the parent does not have to disclose to us, and our admissions process needs to be disability-blind. Our request for IEP or 504 records comes only after the student has been admitted. This is generally true of educational records transfers.
