|New York City Comptroller Scott Stringer|
$180 million could have helped many children with special needs. Is there no one in New York City who knows accounting and wants to work for the NYC Department of Education? Please, find someone who knows what to do with $37 Billion before all of that goes missing as well.
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The shortfall came because Department of Education officials didn’t submit all the paperwork to secure more than $155 million in reimbursement for some speech, occupational and physical therapy sessions, Stringer’s auditors found.
The Education Department missed out on at least another $25 million by never requesting reimbursement for other services, the auditors say.
Half of the roughly $180 million city Education Department officials left on the table would have gone to the state under federal rules, with the remaining $90 million flowing to the city coffers, auditors said.
“This is money that could be in our classrooms supporting our children when they need it most,” said Stringer in a statement. “This mismanagement is unacceptable, and the DOE must improve its process to capture every last dollar eligible for reimbursement.”
DOE officials vigorously disputed Stringer’s findings.
Stringer’s office argued that since DOE is responsible for submitting all the reimbursement claims, it was appropriate to note the total amount the agency missed out on recouping, even if half of it would have gone to the state.
To claim money for special education services from Medicaid — the federal insurance program that covers medical costs for low-income people — school districts must compile reams of paperwork, including doctor referrals, evidence that therapists are licensed, consent from families to apply for reimbursement, and notes documenting therapy sessions.
Auditors said the DOE conducted roughly 6.8 million individual therapy sessions during the 2018-19 school year for which it could’ve claimed reimbursement.
But the Education Department was missing at least one element of the necessary paperwork for about 1.6 million of those therapy sessions, depriving the agency of up to $155 million in potential reimbursements, auditors said.
The most common piece of missing documentation was a referral from a doctor, auditors found.
The DOE has a team of in-house doctors that writes referrals for occupational and physical therapy, and agency officials said they try to deploy those doctors based on need. Stringer’s auditors advised the DOE to hire more doctors.
In roughly one-fourth of the cases the auditors analyzed, the DOE failed to submit evidence that the provider had an appropriate license to claim federal reimbursement. The comptroller’s office recommended a “comprehensive review” to determine which therapists need to obtain or update their credentials.
Scores of disabled students in private schools also receive DOE-funded therapy that is eligible for federal reimbursement — but the city does not always make sure the private schools provide the paperwork needed for the city to get federal reimbursement, the auditors found.
Another problem, Stringer’s auditors found, was a shortfall in the consent forms collected from students’ families.
A DOE spokeswoman countered that claim, saying the agency collects consent from 85% of families, “one of the best collection rates in the country on a form that is voluntary for families to complete and return.”
In one pointed back-and-forth, auditors dinged DOE officials for failing to take advantage of a Medicaid program that reimburses districts for psychological counseling.
The DOE frequently provides students therapy that meets the Medicaid definition for “psychological counseling” — but fails to classify the sessions as such on students’ Individual Education Plans, auditors said.
The department says many of those counseling sessions are not eligible for federal reimbursement, and that changing recommendations on students’ IEPs would amount to “focus[ing] on revenue rather than the student’s needs.”.
But Stringer’s report says that’s “patently untrue,” and that the oversight cost the city up to $2.4 million in federal money during the 2018-19 school year.
The DOE has long struggled with Medicaid reimbursement. Stringer’s office found in 2014 the DOE lost out on $356 million in unclaimed funds over the course of three years.
The agency ramped up its efforts in 2013, and Medicaid reimbursement revenues shot up from roughly $18 million in 2016 to $97 million in 2019, before falling some during the pandemic, the report found.
The Education Department now has an office dedicated to overseeing Medicaid reimbursement requests, though it employs only five people, according to the audit.
DOE officials argued that recouping every possible dollar of Medicaid reimbursement likely would require big spending outlays on new systems and staff.
“We reject this audit’s suggestions that prioritize bureaucratic procedures over New York City families,” said Education Department spokeswoman Katie O’Hanlon. “We have already implemented many of this report’s recommendations and will continue to work towards maximizing all reimbursements as appropriate, but not ahead of the needs of students.”