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NYC Failed To Secure Hundreds of Millions of Federal Medicaid Funds For Special Education
The New York City Department of Education (DOE) failed to recoup $356 million in federal Medicaid funds for special education services between FY12 and FY14 and is projected to lose out on $310 million more in reimbursement through FY18, Comptroller Scott M. Stringer revealed in a new analysis released today. "This is not new news. We have heard about the NYC DOE doing the same thing for almost 3 years. When will this change? NYC Chancellor Carmen Farina must be fired." writes Betsy Combier, Editor
   Scott Stringer   
The failures of the NYC Department of Education in the area of special education are appalling, not only in terms of getting Federal Medicaid funds, but in getting children their special services and in keeping the licensed special education teachers in the classroom. This is not new news. We have heard about the NYC DOE doing the same thing for more than 3 years. When will this change?

See my posts in 2004:
NYC UFT Gives an Overview of the 'Special Education Mess'

A Question For Carmen Farina, NYC Chancellor: Where is the Money?

Special Education in New York City Does Not Exist; Ed Officials Mislead the Public and Discard the Kids

New York City Ed Department Cited by Audit as Defrauding Federal Government

Get the picture? And Chancellor Carmen Farina was Deputy Chancellor during the Bloomberg/Klein years, until she was forced out

Chancellor Carmen Farina must be fired.

Betsy Combier, Editor


NEW YORK, NY – The New York City Department of Education (DOE) failed to recoup $356 million in federal Medicaid funds for special education services between FY12 and FY14 and is projected to lose out on $310 million more in reimbursement through FY18, Comptroller Scott M. Stringer revealed in a new analysis released today.

“The Department of Education’s ineffectiveness in claiming Medicaid reimbursements for special education has resulted in millions of dollars being ‘left on the table’, forcing City taxpayers to pick up the tab,” Comptroller Stringer said. “To put this in perspective, the funds we’ve missed out on in the past two years are more than the entire UPK budget for FY15. It’s time for DOE to come up with a real plan to secure our federal reimbursement for mandated services that support our most vulnerable students.”

The Comptroller’s analysis shows a steep decline in DOE Medicaid reimbursements beginning in FY06, when it realized $17 million in reimbursements compared to an average of $110 million in the previous ten years. The drop in reimbursement can be attributed to new processes put in place after a series of federal audits determined the City and State had received over $1 billion in Medicaid funds from claims that should have been “disallowed.”

In July 2009, the Department of Justice, Office of the Inspector General, Centers for Medicare and Medicaid Services and New York State reached a settlement in which the State agreed to return $539.75 million to the federal government, $100 million of which would be paid back by New York City. Since the settlement, New York State has made its own claiming rules for school districts more restrictive as a way to avoid potential future clawbacks, since the State is responsible for fifty percent of the districts’ Medicaid costs.

According to DOE’s own estimates, the City’s success in securing these dollars is not projected to improve in the near future. The current budget adjusted Medicaid reimbursements downward from FY15 through FY18 by a cumulative $310 million. If that stands, the City would lose out $666 million in total federal funding over a seven-year span.
Comptroller Stringer made several recommendations to improve DOE’s claims process and ensure City dollars are not replacing federal funding:
DOE must clarify its claims process so that it can recoup its spending on Medicaid eligible special education services;
A joint City, State and federal taskforce should be established in order for DOE to maximize the return on its Medicaid eligible spending; and
The state and federal governments must come through on their financial responsibilities to New York City children by cutting the red tape and bureaucracy that stands in the way of DOE being reimbursed for mandated services.
To read the full report, click here.


Advocates For Children

Thousands of New York City Students Deprived of Special-Education Services, Report Says

From 2014:

EXCLUSIVE: School officials lose $356M in special education funds over sloppy accounting
NY DAILY NEWS, August 22, 2014

City public schools lost $356 million during the past three years in federal Medicaid payments for special education services because city and state officials failed to properly apply for reimbursement, the Daily News has learned.

“Red tape and bureaucracy should not stand in the way of (the city) being reimbursed for the vast array of services provided,” city Controller Scott Stringer said in a report obtained by The News.

As a result, between 2012 and this year, the city Department of Education kept shifting funds originally slated for books, supplies and other general costs to pay for those special education services, Stringer said.

And unless officials reform their practices quickly, the school system will miss out on another $310 million from Medicaid over the next four years — for an astonishing total loss of $666 million.

“That’s just unacceptable,” Stringer said. “There’s no excuse for leaving so much money on the table.”

Under federal law, Medicaid provides 100% reimbursement to state and local school districts for special education services such as speech, occupational and physical therapy, counseling, evaluations of students, and pupil transportation.

Each school district, however, must first pay for the service, then provide extensive documentation to its state education department, which in turn applies to Medicaid for reimbursement. After Washington approves the money, the states and local districts get to split the payments between them.

But over the past few years, United Federation of Teachers President Mike Mulgrew and other school system labor leaders have warned that New York City, unlike other school districts in the state, keeps botching its documentation of special education expenditures.

Stringer’s report appears to back that up. He found the city has collected only a tiny fraction of the Medicaid money it should have.

In the fiscal year that ended June 30, for example, the Department of Education initially expected to receive $117 million from Medicaid for services to 170,000 special education pupils. Instead, it has received just $2.2 million, and billed for only another $180,000.

Department of Education officials say they’ve been working hard to improve the Medicaid billing system they inherited from the Bloomberg years.

“We are confident that our . . . corrective action plan, along with additional actions the DOE has taken since last December, will result in increased Medicaid revenue this fiscal year and in the future,” department spokeswoman Devora Kaye said

Betsy Combier Speaks Out on the Constitutional Mess Created by Mayoral Control of the New York City Board of Education (2008)

New York City Special Education Problems Persist, Says UFT VP, City Council Speaker, and everyone else

© 2003 The E-Accountability Foundation