Medicaid in Schools: Poor Oversight and Improper Payments Compromise Potential Benefit Page: 3 of 24
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Medicaid in Schools: Poor Oversight and
Improper Payments Compromise Potential
services using a bundled, rather than a fee-for-service, approach; and work
in 17 states we identified as submitting claims for administrative activities.
We also conducted investigative work in two states where we identified
abusive or potentially fraudulent practices associated with claims for
administrative activities or fee-for-service health payments.
In summary, despite growing expenditures for school-based Medicaid
services and activities, the potential benefits to schools and the children
they serve are being compromised by poor HCFA guidance and oversight
and by improper payments that divert public funding from its intended
purpose. In total, 47 states and the District of Columbia have reported $2.3
billion in Medicaid expenditures for school-based activities for the latest
year for which they have data. Although this spending level reflects a
small share of total Medicaid expenditures, more schools are expressing
interest in availing themselves of Medicaid as a source of funds, especially
to reimburse administrative activities, which creates the potential for
continuing expenditure growth.
Payment for covered services for Medicaid-eligible children is not at issue.
But methods used by some school districts and states to claim Medicaid
reimbursement for school-based services lack sufficient controls to
ensure that these are legitimate claims. For example:
* Bundled payment methods that seven states use to pay for health services
have failed in some cases to take into account variations in service needs
among children and have often lacked assurances that services paid for
were provided. HCFA last year banned the use of bundled rates because of
concerns about their development and use. However, we believe that it
would be better for HCFA to work with states and schools to build in
these missing assurances rather than to ban the use of bundled rates
* Poor guidance and oversight have resulted in improper payments in at
least 2 of the 17 states that allowed schools to submit claims for
administrative activities costs. Our work in Michigan alone identified $28
million in federal reimbursement for improper payments for
administrative activity claims over 2 recent years. The lack of effective
controls in other states could allow comparable improprieties to occur
Despite the significant level of Medicaid payments for school-based
services in some states, school districts may receive little in direct
reimbursements because of certain funding arrangements among schools,
states, and private firms contracting with them. Seven states retain from
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United States. General Accounting Office. Medicaid in Schools: Poor Oversight and Improper Payments Compromise Potential Benefit, text, April 5, 2000; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc289520/m1/3/: accessed February 22, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.