Border Wars
The OSEP letter goes on to say that these parentally-placed private school students from other states should also be counted as special education students within the school district for purposes of calculating the "proportionate share" of IDEA funding that is available to be spent on private school special education students in the district. For those school districts in Connecticut who have students parentally placed in boarding schools in Massachusetts, the fact that the Massachusetts local school district is getting the IDEA funding for that student (who may be a Connecticut resident) is a very good reason to refer that student to the Massachusetts district both for an initial eligibility evaluation, as well as triennial evaluations and other "service plan" services that the student may need while enrolled at the Massachusetts school.
Keep in mind also, that this principle is equally applicable to states other than Massachusetts, even though Massachusetts was the target of the OSEP criticism here. Think about those kids sent to boot camp/school in Virginia, wilderness camp/school in Utah, etc. Given that the local school district for the town where the school is located is going to get the IDEA funding for that student, don't lose too much sleep over sending the student to that district for evaluation and other services.