Audit of Medicaid School-Based Services in Texas

EXECUTIVE SUMMARY:

The objective of our audit was to determine whether the Texas Health and Human Services Commission (the State agency) claimed Federal reimbursement for school-based health services in accordance with Federal and State requirements.  We found that 991 of sampled claims did not comply with Federal and State requirements.  The State agency claimed reimbursement for services that were (1) not allowable because of programmatic deficiencies or (2) rendered by unlicensed providers.  We estimate that the State agency inappropriately claimed at least $8,749,158 in Federal reimbursement during State fiscal year 2000.  In addition, school districts were overpaid $53,235 for counseling services because they were paid more than the maximum allowable fee established by the State agency. 

We recommended that the State agency:  (1) refund to the Federal Government $8,749,158 for unallowable services, (2) work with the Centers for Medicare & Medicaid Services to determine the financial impact to the Federal Government for overpayments made by the State agency for counseling services and make an appropriate refund, (3) review periods after our audit period and make appropriate financial adjustments for any unallowable services, (4) routinely monitor claims from school districts for compliance with Federal and State requirements, (5) direct school districts to ensure that providers of services meet licensing requirements, and (6) issue guidance requiring school districts to bill only for allowable Medicaid services rendered by licensed individuals.  State agency officials said that they would need to complete a number of steps before addressing most recommendations.