School-Based Fee-for-Service Medicaid Reimbursements
Learn how the AI-generated research projects were createdOverall Conclusion
The audit identifies widespread weaknesses in Kansas’s school-based Medicaid FFS program, including policy misalignments with federal guidance, documentation gaps, and data integrity issues that contributed to unreconciled payments and potential multi-million-dollar improper payments. While some LEAs achieved high reimbursement rates under independent models, others exhibited substantial under-billing, missing documentation, and NPI-related noncompliance. The report highlights substantial cost-saving opportunities through realigning payment streams to MCO capitation, enhancing policy consistency, and strengthening oversight, credentialing, and documentation controls to ensure that only medically necessary services identified in IEPs are reimbursed.
Source Document
Audit Scope
The audit scope covered all Medicaid-enrolled students who had services billed on their behalf from a Local Education Agency (LEA) provider within a school-based program from January 1, 2021, through January 31, 2023. The audit examined school-based Medicaid Fee-For-Service (FFS) reimbursements processed through KDHE-DHCF’s Kansas Medicaid program (KMAP) for services delivered in Kansas public schools, focusing on Local Education Agencies (LEAs) including one interlocal/co-op arrangement (LEA #13). The 18 LEAs represented by districts and co-ops/interlocals included 286 districts with an average enrollment of 480,082 students; a 6% sample produced 17 districts plus 1 interlocal (for a total of 18 LEAs) and 5,996 Medicaid-eligible students. A 2% student-based sample yielded 110 test beneficiaries. Data sources included KMMS claims data, KSDE enrollment data, IEP records, and provider credentialing information. The analysis encompassed analyses of fee-for-service claims, IEP records sampling, provider credentials/background checks, attendance records, logs, and cross-checks of IEPs/logs/claims, as well as capitation payments to MCOs and the relationship of FFS payments to MCO capitation. The audit period spans January 1, 2021, to January 31, 2023, and addresses applicable laws and policies, including EPSDT, IDEA, SSA, CMS guidelines, and Kansas regulations (KMAP, KSDE LEA Manual, and related statutes).
Key Findings Summary
Invalid NPIs used on claims; one LEA paid $596,882.86 for 242 of 316 beneficiaries (77%) with an NPI assigned to a former LEA official with no medical affiliation, resulting in noncompliance with 42 C.F.R. § 455.440 and $573,139.04 in invalid payments (7% of claims) due to NPI issues.
Lack of routine background checks for Medicaid service providers; 72 of 231 providers (31%) lacked proof of background checks at the time of record request; only 10 of 231 files showed background checks completed after the request; 96% noncompliance with the LEA Manual requirement to search state Medicaid exclusions.
Physician orders required for therapies often missing or unsigned; 58 beneficiaries received individual therapy, but only 6 had signed orders (90% noncompliance); 57 beneficiaries received group therapy, with signed orders for only 11 and 46 files lacking orders (81% noncompliance).
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AI-Assisted
AI Scope Summary
Assess the effectiveness and integrity of KDHE's administration of school-based Medicaid FFS reimbursements, evaluate policy alignment with federal guidance, and examine KSDE oversight of IEPs to ensure medical necessity and proper documentation, with recommendations to improve processes, close gaps, and explore potential savings through MCO capitation.
AI-Generated Insight
This performance audit reveals systemic control weaknesses in Kansas’s school-based Medicaid program, with pervasive gaps in documentation, provider checks, and NPI accuracy, which together create substantial financial risk and threaten compliance with federal guidance. The findings point to clear opportunities for policy harmonization, stronger data governance, and a transition toward capitation to maximize efficiency and safeguard public funds, while ensuring that services delivered in schools remain medically necessary and well-documented.