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September 30, 2008

DiNapoli: Eight School Districts Miss Out on
$3.1 Million of Medicaid Reimbursement

Weak internal controls and policies prevented eight school districts throughout Northeastern New York from claiming at least $3.1 million in Medicaid reimbursable expenses and consequently losing out on $1.54 million in revenue for the districts and state to share, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“School districts are struggling to fund educational programs with limited resources, and every nickel matters,” DiNapoli said. “Medicaid reimbursements are an important revenue source for school districts and the state. The money is being spent, the services are being provided, and districts should go after the reimbursement.”

DiNapoli’s audit, covering the period of July 2005 to June 2007, found eight school districts failed to seek reimbursements for $3.1 million in Medicaid reimbursable expenses. School districts and New York state are each entitled to receive 25 percent of these type of expenses from the federal government. By failing to claim the Medicaid expenses, the school districts collectively lost out on $770,000. Because the state is due an equal share of the Medicaid reimbursements sent to the districts, the state also lost out on $770,000.

The reasons for failing to claim the Medicaid reimbursements varied among districts with reasons including:

  • untimely identification of Medicaid eligible students due to poor communication between districts and the Medicaid claims processor;
  • difficulty obtaining proper documentation from service providers;
  • irregularly claiming bills resulting in a backlog of claims; and
  • not reviewing Medicaid claim denials for the potential of resubmitting claims for reimbursement.

DiNapoli’s office recommends that district officials:

  • ensure that student eligibility is updated periodically in an effort to claim all potential reimbursements;
  • develop procedures that ensure documentation is obtained from providers and transmitted to the Medicaid claims processor in a timely manner; and
  • reconcile the amounts claimed for Medicaid reimbursement with the amounts received and review any rejections or disallowances to determine whether the items may be resubmitted with additional documentation or explanation.

District officials generally agreed with our recommendations and indicated they plan to initiate corrective action.

The school districts included in the audit are Amsterdam City, Johnstown City, Lansingburgh Central, Peru Central, Plattsburgh City, Salmon River City, Saranac Central and Shenendehowa Central. Each school district received an audit findings letter. Click on the district's name to view each district's letter and their response.

Click here for a copy of the audit.

School District Accountability
In order to improve accountability of the state’s schools, DiNapoli’s office will audit all of New York’s 834 school districts, Board of Cooperative Educational Services (BOCES) and charter schools by 2010. The State Comptroller’s office has completed 480 school audits and approximately 200 school audits are currently underway.


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