Explaining it away as a “perfect storm” of “staff turnovers,” Kansas Department of Health and Environment Secretary Janet Stanek on August 26, told members of the legislative budget committee the federal government would be “clawing back” some $11 million in overpaid Medicaid funds.
The state reimburses schools for the cost of providing Medicaid services to students. Stanek said a mistake was made in the way reimbursements were calculated by the consulting company that handles medicaid reimbursements to schools. She said while reviewing the data for fiscal year 2023, several districts notified KDHE that they thought an error had been made.
The consulting company reran the calculations and discovered that a typo on a data request asked for a student count based on billed claims instead of a count based on paid claims.
“And so if you work in this arena, you know, that makes a big difference,” Stanek said. “I would say that there are no excuses, because we’re working on a path forward, but it is under-resourced in the management of this program; it was cut back under the one or two previous administrations, staff were cut. We’ve also had turnover in the schools; the people that manage these programs in the school turnover. They’re normally at clerical level that are submitting the information, etc, and .. our consulting services, had turnover. So perfect storm type of stuff.”
KSDE went back 7 years to 2016 to look at the numbers and discover that 153 — roughly 70% of the districts in the state — had been overpaid.
“So the total recoupment for that period is $11,210,060. The total dispersed to those school districts over that time period was $235 million,” Stanek said. “So the recoupment was … 4.4% of that total amount, a large majority, 153 of the districts, which is 70% that were impacted, have a recoupment of less than $25,000.”
Wichita public schools were hit hardest, and are being expected to pay back in excess of $3 million.
KSNT reports a representative from the Wichita district said they found out about the clawback via letter.
“We specifically had to give back just over $3 million because of this calculation error,” Beard told the TV station. “These are our students, and this is our revenue, and we count on this revenue, we budget for this revenue. It’s hard to be told that you owe $3 million. No one wants to receive that kind of message in the mail.”
Among the other major districts in the state, KSNT reports Kansas City, Kansas Public Schools is being asked to return more than $800,000, and the Topeka and Manhattan districts will be required to return around $400,000 each.
For the smaller districts who owe around $25,000 to $50,000 most are simply having some reimbursements withheld to make up the difference.
Stanek said the Centers for Medicare and Medicaid Services require the state to make up the overpayment within a year.