Medicaid School-Based Services in Kansas - Adjustment of the Bundled Rates

EXECUTIVE SUMMARY:

The objective of our review was to determine whether Kansas adjusted the payment rates for Medicaid school‑based health services pursuant to Federal regulations.  We found that Kansas did not adjust the payment rates for Medicaid school-based health services pursuant to Federal regulations.  Specifically, Kansas did not adjust the payment rates for inflation consistent with the costs that it used to develop the rates.  Kansas had inadequate internal controls to ensure that it correctly adjusted the payment rates.  As a result, each of the 15 payment rates was overstated as of May 2003.  We did not calculate the resulting overpayments.

We recommended that Kansas (1) work with CMS to appropriately adjust the rates for inflation, and then calculate and refund the overpayments for fiscal years (FYs) 1998'2003, (2) calculate and refund any overpayments that occurred subsequent to our audit period, and (3) develop and implement adequate internal controls to ensure that future Federal claims for school-based services comply with Federal requirements and the State plan.  Kansas stated that it will discuss the first recommendation with CMS.  In regard to the second recommendation, Kansas stated that it has not increased the payment rates since State FY 2003; therefore, "Any overpayment . . . would be contained within the audit period."  Kansas concurred with the third recommendation.