Medicaid School-Based Administrative Activities in Kansas

EXECUTIVE SUMMARY:

The objective of our audit was to determine if Kansas used accurate time studies and cost reports to claim Medicaid administrative costs associated with school-based services for fiscal year (FY) 2002 in accordance with Federal guidelines.  We found that Kansas used inaccurate time studies and cost reports, and therefore did not claim Medicaid reimbursement for administrative costs associated with school-based services for FY 2002 in accordance with Federal regulations.  The 4 school districts reviewed completed 773 of 1,937 time studies inaccurately, and 1 school district submitted inaccurate cost reports.  Kansas did not ensure that completed time study forms represented actual activities performed or that school districts submitted accurate and reliable cost reports.

We recommended that Kansas: (1) ensure claims submitted for reimbursement are based on accurate time studies; (2) ensure school districts submit accurate and reliable cost reports; (3) refund $347,047 (Federal share) that did not qualify for Medicaid reimbursement ($293,182 for time studies and $53,865 for cost reports); and (4) review time studies completed by the 152 school districts that were not audited for FY 2002 and for all school districts for previous and subsequent years and refund any overpayments occurring because of inaccurate time studies.  Kansas did not agree that the study forms were completed inaccurately.  Kansas agreed with our recommendation to ensure claims submitted for reimbursement are based on accurate time studies.  It did not address the recommendations to refund overpayments and to perform time study reviews at the other school districts.