Educators Tell City Council Why Millions Goes Unclaimed From Medicaid

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When New York City rolled out its $80 million database for special-needs students, in 2010, it gave all schools a new computer to be used solely by speech, physical and other therapists who provide services to the students to file required paperwork.

The therapists were allotted five minutes to enter their notes after each session. Stuck waiting for their turn to use the machines, many of them routinely took work home.

This has been just one of the obstacles the New York City Education Department has faced in its failure to collect Medicaid reimbursements for services provided to the students, a city councilman said at a hearing Thursday.

The notes from the therapists and teachers must be filed for reimbursement to take place under new state rules. But Councilman Domenic M. Recchia Jr., who brought up the matter of the computers, said one machine per school was not enough, especially when the database crashes often and antiquated wiring in some schools makes getting online a time-consuming chore.

The City Council called the hearing after a New York Times article in December showed that the city had failed to collect tens of millions of dollars in reimbursements in recent years, largely because it lacked the staffing and training to do so.

The federal government requires school districts to provide therapy, nursing, counseling and other types of services to special-needs students, then reimburses the costs, as long as they meet certain requirements. New York State instituted some of the nation’s strictest regulations after a 2005 audit unearthed a host of irregularities in the city’s claims, eventually forcing the city to repay $100 million to the federal government.

At the hearing, education officials tried to explain the minutiae of Medicaid reimbursement regulations, and why they had failed to file claims in some instances. But some people saw the explanations as excuses for wasting money.

Michael Mulgrew, president of the city teachers’ union, the United Federation of Teachers, called the department’s troubles in collecting the reimbursements “gross incompetence.” The Manhattan borough president, Scott M. Stringer, who addressed the problem last year in a letter to Schools Chancellor Dennis M. Walcott, described it as “absolutely a New York City embarrassment.”

Education officials said that Medicaid required a physician’s order for each of the services, for example. Veronica Conforme, the Education Department’s chief operating officer, said the city had hired more doctors to write the orders, and drafted parents and school health centers to help out, too. Still, Ms. Conforme acknowledged, the city was a long way from full compliance.

She also said that if three out of four students were absent from their group therapy session, the city could not ask for reimbursement on behalf of the only child who showed up. (The one-on-one session does not qualify as group therapy.) If speech pathologists lack certain certification – and 40 percent of the therapists employed by the city’s school system do – their services are not eligible for reimbursement.

“In a system as large as ours,” which has about 175,000 special-needs students, “meeting the new requirements has required a significant amount of investment,” Ms. Conforme said.

A budget plan released in November showed that the city hoped to collect $117 million in reimbursements for services provided in the current fiscal year, which ends on June 30; $30 million has been claimed so far, Ms. Conforme said.

The estimate, however, was not part of budget discussions last year, said the Council speaker, Christine C. Quinn. While a deal was reached to keep 4,100 teachers from losing their jobs, she said the Council signed off on the layoffs of 660 school aides because there seemed to be no other alternative to balancing the books.

“If we knew we might have this reimbursement money, we could have had a conversation with the union representing these people and told them we’re working at it, we’re trying, we’re trying to save these jobs,” Ms. Quinn said.

Medicaid reimbursements are available for 10 types of school-based services, though the city has been submitting claims for just five of them: speech, occupational and physical therapy; transportation; and nursing. The reason, Ms. Conforme said, is that those are the most common among the services provided, so there is more money involved.

The estimated loss for failing to file claims for the other services, among them audiological evaluations and psychological counseling, is $20 million a year, Michael Tragale, the department’s chief financial officer, said at the hearing.

Ms. Conforme said the department would use part of the reimbursement money it has collected this year to buy more computers for the therapists in the schools. She also noted that reimbursement claims can be filed up to two years from the date the service was provided, so there is time to address some of the kinds. Councilman Robert Jackson, chairman of the education committee, disagreed, saying the more the department waited, the more the work would pile up.

“If this was private industry, all of you would be fired right now,” Mr. Jackson told Ms. Conforme, Mr. Tragale and Matt Berlin, the department’s executive director of Medicaid, who also testified at the hearing.

“The buck stops with the Department of Education,” he added. “Not recouping those tens of millions of dollars is totally unacceptable.”