Review of Rate Setting Methodology Medicaid School-Based Child Health Program Costs Claimed by the Connecticut Department of Social Services July 1997 Through June 2001

EXECUTIVE SUMMARY:

This final report points out that methodologies used by the Connecticut Department of Social Services (state agency) to develop reimbursement rates for the school based child health program (SBCHP) were not in accordance with federal regulations, standards, and guidelines.  Monthly SBCHP treatment service rates were overstated by at least 50 percent resulting in excess reimbursement of about $32.8 million (federal share) to the state for the period July 1, 1997 through June 30, 2001.  In addition to inadequate rate setting methodologies, the state agency did not establish adequate procedures to verify that the cost data submitted by local education agencies were allowable and allocable for reimbursement under the SBCHP.  We recommended a financial adjustment and procedural improvements.  The state agency disagreed with our recommendation for a financial adjustment, but recognized the need for changes to the methods used to develop reimbursement rates.

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