Editor’s note: This story was corrected to reflect that school districts or any service provider are required to notify Ohio’s Office of Medical Assistance when they have been overpaid. In this case, the state notified the districts of the reporting error and overpayment.
The Ohio Department of Job and Family Services and more than 350 school districts are in a fight over millions of dollars in Medicaid money that is used to provide services to disadvantaged and disabled students, among them children with autism.
A clearinghouse executive who handles the bills for the schools estimates the state owes districts as much as $50 million for two years of services. The districts, meanwhile, have used their own general fund money — already cut by Gov. John Kasich’s administration — to pay for those services while they await reimbursement.
Meanwhile, Job and Family Services has discovered that through an error in its reporting system, about $14.6 million in state money was incorrectly paid out, and the state wants it back.
Sam Rossi, spokesman for Ohio’s Office of Medical Assistance, said a provision in the U.S. Affordable Care Act requires the districts to notify the state when they are overpaid and to repay that amount within 60 days, even if the error is not their fault. In this case, the state notified the school districts.
After meetings and delays, there appears to be no immediate resolution as districts daily absorb new costs for services.
“I would love to learn more about what’s going on with that program and why reimbursements are lagging behind,” said Marla Root, a public policy member for Autism Ohio and the parent of an autistic child. “Obviously, we have a lot of kids who rely on those services. We wouldn’t want schools to have to stop service because they are not getting paid.”
Schools provide such services as speech, occupational and physical therapy, nursing services, psychological testing, counseling and social support for qualifying children as part of the Medicaid School Program, created in 2008 to replace the Community Alternative Funding System (CAFS).
Some Medicaid billing agents see a striking similarity in the deficiencies of MSP and CAFS, which the federal government shut down in Ohio in 2004 for noncompliance in “program eligibility requirements,” “variability in rates” and other issues, according to documents from Job and Family Services.
The state provides schools with what amounts to about half of their Medicaid expenses throughout the year. The schools temporarily cover the other half of the costs out of their own funds, then after the end of the federal fiscal year on Sept. 30, they submit a detailed accounting to the state in order to receive full reimbursement.
There is an extensive audit process that follows. Districts are now at 28 months and counting, waiting for settlement for services performed in the 2009-10 federal fiscal year, and believe that it’s nearly time for settlement on the 2010-11 year, too.
Akron struggling
Akron school officials, dealing with a $16 million budget deficit by already cutting 133 teaching positions, believe the district is owed $1 million for costs incurred in the 2009-10 school year.
The district estimates the same can be expected in the following two years, ratcheting the total money that they are awaiting from the state to $3 million.
Akron expected its first year-end settlement last summer, said autism/special education consultant Tish Kwiatkowski. When it didn’t come, she called her billing agent.
Healthcare Billing Services Inc., based in Lancaster, manages Medicaid-related finances for Akron and about 200 other Ohio districts. Owner and director Dan Thomas told his clients last year to expect the reimbursements for the 2009-10 school year in October. When that deadline passed, he assured his clients that they would see MSP year-end reimbursements by the end of December. Still, the districts wait.
“Now, I’m not even giving them a date,” Thomas said.
He attended a meeting in December with representatives of the governor and Job and Family Services to discuss the late payments. He hadn’t heard anything else on the expected payments until Feb. 15, when Patrick Beatty, deputy director and chief policy officer in the governor’s Office of Medical Assistance, sent Thomas and other billing agents an email outlining the state’s rationale for withholding funds.
Beatty provided a spreadsheet detailing what he believes are $14.6 million in payments to 543 districts and demanded repayment.
Rossi, the spokesman, explained in an email that the overpayments are the result of a system error, which incorrectly added state dollars to what is essentially a federally funded program, and the state dollars should be returned.
It doesn’t add up, Thomas said. The gap is huge, between districts owing the state $14.6 million and his estimate — obtained by consulting five other billing agents — that schools are owed nearly $50 million.
In his correspondence, Beatty — who was unavailable for comment — also accused districts of performing services that were not approved by parents, not included in the student’s formal Individualized Education Plan (IEP) or sometimes billed multiple times.
“During cost report reviews, my staff noted what appeared to be excessive Medicaid student reimbursement rates when compared to non-Medicaid enrolled students,” Betty wrote.
Thomas defended the school district’s bills, saying that no parental consent is needed, about 40 percent of therapists’ time is not tethered to an IEP, and psychological tests are administered on many days and, therefore, are correctly billed multiple times.
History of trouble
The current Medicaid School Program was created in 2008 after nearly two years without. The administration of former Gov. Bob Taft had failed by the summer of 2005 to comply with federal guidelines on the distribution of federal dollars to schools for reimbursable expenses and halted what at the time was a $69 million program.
Following the program shutdown, an Akron schools official estimated that the district would lose $2.5 million in Medicaid funding each year.
While new discrepancies are disputed, Akron Treasurer Jack Pierson has allocated $1 million from the district’s general fund to compensate for the late payment.
“We’ve been getting Medicaid money off and on for 20 years, and they keep changing it,” Pierson said.
Akron has filed two end-of-year Medicaid reimbursements totaling about $2 million. In June, another year will compound that total, ratcheting the amount due to $3 million.
Those costs have been absorbed by the district, which has also paid for a certified public accountant to audit each year’s filing.
At a recent Akron school board finance committee meeting, Kwiatkowski said: “I’ve been very clear that we’re not happy at all.”
Doug Livingston can be reached at 330-996-3792 or dlivingston@thebeaconjournal.com.
