Review of Colorado Direct Medical Service and Specialized Transportation Costs for the Medicaid School Health Services Program for State Fiscal Year 2008

Not all of the costs that the Colorado Department of Health Care Policy and Financing (State agency) claimed for School Health Services (SHS) during the period July 1, 2008, through June 30, 2009, were reasonable, allowable, and adequately supported pursuant to applicable Federal regulations and State requirements. Specifically, of the $1.8 million (Federal share) that the State agency claimed in costs for the Greeley and Aurora school districts for this period, $248,000 (Federal share) was unallowable for Federal reimbursement due to a variety of errors. In addition, errors identified during our review of the audited (Greeley and Aurora) school districts impacted not only these school districts, but also other Colorado school districts and the State agency. As a result of these errors, these other Colorado school districts received a total of $467,000 (Federal share) in unallowable Medicaid payments for the period July 1, 2008, through June 30, 2009. As an additional result of these errors, the State agency received a total of $156,000 (Federal share) in unallowable Medicaid payments for the same period. These errors totaling $871,000 (Federal share) in questioned costs occurred because the State agency did not have adequate policies and procedures to monitor the SHS program and to ensure that all costs claimed met Federal requirements.