NYC Schools Lost Out on $431M in Medicaid Reimbursements

New York City Public Schools failed to collect as much as $431.6 million in Medicaid reimbursements over three fiscal years for a variety of services for students with disabilities, according to a new audit by City Comptroller Mark Levine.

Not only did auditors find that NYCPS did not claim millions of dollars in reimbursements, in many cases it did not appear to document mandatory services provided to these students, the audit found.

NYCPS can seek Medicaid reimbursements for up to 10 services it provides to students with Individualized Education Programs. Past audits have found the system only sought payment for some of the Occupational Therapy, Physical Therapy, and Speech Therapy services it provided. The latest audit found NYCPS still failed to seek reimbursement for any of the other seven Medicaid-eligible services, the audit said.

NYCPS successfully claimed less than half of the total services it intended to claim reimbursement from Medicaid for over the three-year fiscal period. Under Medicaid rules, failure to meet just one documentation requirement prevents a claim of reimbursement.

NYCPS also lacks any record of providing 16.2% of OT, PT or ST services required in IEPs. Auditors concluded that either those mandated services for students with IEPs were not performed or the documentation to track their results was not kept.

“Failing to collect Medicaid reimbursements the city is entitled to is more than a fiscal problem — it raises serious questions about whether government is operating as effectively as New Yorkers need it to,” Levine said in a statement. “When NYCPS cannot reliably claim federal dollars for services it already provides, and cannot consistently document whether mandated services were delivered, students, families, and taxpayers all lose."

Auditors found that NYCPS failed to claim $273.4 million in OT, PT and ST services delivered to Pre-K to 12th grade students; $132.8 million in which mandated services that may have been provided lacked documentation; and $25.4 million in unclaimed services delivered across medical, OT, PT and ST evaluations and reevaluations, as well as psychological counseling.

Levine said the school system needs to establish routine monitoring controls, such as sample-based reviews, to ensure that all OT, PT, and ST service encounters are supported by required written orders or referrals prior to submission for Medicaid reimbursement, and record and track all mandatory services sessions for students with disabilities, among other recommendations.