Audit Report on the Board of Education’s Medicaid Billing Practices For Services Provided to Autistic Students

AUDIT REPORT IN BRIEF

This audit determined whether the Board of Education (the Board) properly billed Medicaid for Medicaid-eligible services provided to its autistic students. The period covered by the audit predated the change of the Board to the Department of Education, a mayoral agency.

The Board billed Medicaid an estimated $11.3 million for services provided to autistic students in Fiscal Year 2001. Problems in the Board’s billing processes and errors and omissions in its computer system data caused the Board to both underbill and overbill Medicaid for those services. For Fiscal Year 2001, we estimate that the net result of these problems total an additional $2.9 million for which the Board should have billed Medicaid; the Board would have been entitled to 25 percent of that amount, or $735,258.

Specifically, the Board:

• Did not identify some autistic students who were Medicaid-eligible. The Board could have billed Medicaid an estimated $836,052 for services provided to these students.
• Did not follow up on Medicaid claims rejected by the State. Some claims were rejected improperly, and the Board could have recovered an estimated $243,162 for those claims.
• Lacked adequate controls over its Children Assistance Program (CAP) system. Thus, the Board did not bill Medicaid for eligible services totaling an estimated $3.1 million and billed for other, non-eligible, services totaling an estimated $1.3 million.

The billing processes and computer systems that we tested for this audit of Medicaid billings for autistic students were those used by the Board for Medicaid billings for all its eligible special education students. Therefore, the weaknesses we identified in this audit would also affect the Board’s billing for all Medicaid-eligible services.

Based on our finding that the Board did not identify some autistic students who were Medicaid-eligible, we estimate that 4,963 (6%) of the Board’s 82,713 special education students not considered by the Board to be Medicaid-eligible may indeed have been eligible. This would result in potential additional annual gross revenue of $19.5 million, of which the Board would have been entitled to 25 percent, or $4.9 million. This estimate indicates the large potential for additional Medicaid revenue that can be claimed by the Board for services it provides to its students.

Since our other findings are based on specific services that autistic students in our sample either did or did not receive, we did not estimate the potential costs of these findings for the entire special education student population. However, the Medicaid billing problems identified for autistic students would also affect all special education students. If the Board were to review its records for all special education students, it would find a greater amount of lost revenue and revenue to which it is not entitled than the amounts reported here. The recommendations we make regarding the billing practices for Medicaid-eligible services provided to autistic students can be applied to the billing practices for the rest of the special education population as well.

Although unrelated to billing, our review of student records found that the Board did not ensure that autistic students received the services required by their Individualized Education Programs (IEPs) and did not always maintain adequate supporting documentation necessary to claim Medicaid reimbursement.

To address these issues, we make 20 recommendations. The major recommendations are that the Board should:

• Review its Biological (BIO) File information for the 83 autistic students identified during the audit as Medicaid-eligible and bill Medicaid for reimbursable services provided to them.
• Review the criteria it uses in the matching process between the BIO File and the New York State Department of Health (DOH) Medicaid Eligibility File. The Board should consider using social security numbers and student addresses as additional criteria in the matching process.
• Attempt to obtain student social security numbers from parents and enter these numbers in its BIO File.
• Contact DOH to obtain the correct Client Identification Number (CIN) for the students with two CINs.
• Consult the Mayor’s Office about how to standardize student addresses that appear in Board and various City agency records.
• Review the State remittance report each month and resubmit any valid claim for which payment was denied.
• Review prior State remittance reports and re-submit claims previously denied under the error codes 152 and 131.
• Correct the CAP information for the students cited in this report whose records in the CAP system were without service start dates and then bill Medicaid for these students.
• Ensure that all services have an accurate start and stop date entered into CAP.
• Correct the billing codes for the students cited in the report whose records of services were miscoded in CAP and then bill Medicaid for these students.
• Review the discrepancies for the students cited in this report whose service start dates in CAP did not reconcile with the service start dates on their attendance cards.
• Develop procedures to ensure information on student attendance cards is correctly entered in CAP.
• Develop procedures to ensure that data entered in CAP accurately reflect the information on student attendance cards.

The matters covered in this report were discussed with Board officials during and at the conclusion of this audit. A preliminary draft report was sent to Board officials on November 22, 2002, and was discussed at an exit conference on January 9, 2003. We submitted a draft report to Board officials on January 24, 2003, with a request for comments. We received a written response from Board officials on March 14, 2003.

In their comments, Board officials, responding as Department of Education (Department) officials, acknowledged the problems discussed in our audit report and stated that they have already begun to implement or to partially implement its recommendations. They stated, "The Department is proceeding on several fronts to improve the accuracy of the Medicaid reimbursement claiming process."