MEDICAID: Kids’ Funds Went to Consulting Firms, States
Consulting firms and state governments have collected hundreds of millions of dollars in Medicaid funds earmarked for disabled poor children, according to a new report on Medicaid in schools. Federal GAO investigators Tuesday said that school districts often pay private firms contingency fees to help prepare claims and then illegally bill Medicaid for the consulting services. Some schools pay consulting fees of up to 20% or 25% of Medicaid funds secured for them, creating "an environment of opportunism" that tends to "encourage questionable claims" and the filing of "improper Medicaid claims for administrative activities," investigators reported, adding that the "problems had been allowed to fester because of weak supervision by federal Medicaid officials." Medicaid's Timothy Westmoreland said his office "generally agreed" with the findings and would "take steps to make sure Medicaid money is used only for children and services covered by Medicaid." But as federal officials try to calculate the exact amount of overpayment to organize a recovery effort, state health officials are denying the accusations, saying that the "Clinton administration had never given them clear guidance about how federal Medicaid money could be used in schools." The Senate Finance Committee will hold a hearing today to discuss the report (Pear, New York Times, 4/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.