Review of Medicaid Transportation Claims Made by the New York City Department of Education

EXECUTIVE SUMMARY:

Our objective was to determine whether Federal Medicaid payments for transportation services claimed by the New York City Department of Education (NYCDE) were in compliance with Federal and State requirements.  None of the120 transportation claims in our statistically valid sample complied with all Federal and State requirements.  Specifically:  (1) for 119 claims, we were unable to verify that the transportation services billed were rendered; (2) for 97 claims, a Medicaid-covered school health service other than transportation was not rendered on days when transportation was billed; (3) Eight claims lacked any documentation at all; (4) for 33 claims, no child's plan/family plan was provided or the plan was untimely; and, (5) thirty-six claims did not include a recommendation for transportation services in the child's plan/family plan.  Based on our sample, we estimate that $96,110,877 in Federal Medicaid funding was unallowable.  We 'set aside' other claims totaling an estimated $12,130,322 in Federal Medicaid funding for consideration by CMS and the State because Federal Medicaid law and regulations require that services be documented but do not specify how transportation services should be documented.   

We recommended that the State:  (1) refund $96,110,877 to the Federal Government; (2) work with CMS to resolve $12,130,322 in set-aside claims; (3) instruct NYCDE to bill transportation based on the actual number of transportation services rendered, not based on averages; (4) provide proper guidance on Federal and State Medicaid criteria to NYCDE; (5) reinforce the need for NYCDE to comply with Federal and State requirements; (6) improve its monitoring of NYCDE's transportation claims to ensure compliance with Federal and State requirements; and (7) instruct NYCDE to maintain appropriate documentation to support its Medicaid transportation claims.  In February 14, 2005, comments on our draft report, State officials disagreed with most aspects of the report, including the audit period, approach, criteria, and conclusions, and stated that the draft report should be withdrawn.  We disagree with most of the State's comments and continue to believe that Medicaid school health providers need to follow the documentation standards required of all Medicaid providers.