August 5, 2013

Maine schools, DHHS in costly dispute over Medicaid

DHHS sends Medicaid overbilling notices to districts that thought they were following the rules, and taxpayers may end up with the bill.

By Steve Mistler
State House Bureau

AUGUSTA — The state Department of Health and Human Services is notifying more than two dozen Maine school systems that they have overbilled Medicaid for services provided to low-income students with disabilities, errors that could cost some districts tens of thousands of dollars and other districts hundreds of thousands.

In each instance, the agency says the school districts improperly billed for such services as speech therapy, social workers and nursing care, which are mandated by federal guidelines and typically reimbursable by Medicaid. The DHHS said the services were educational in nature and not reimbursable.

School districts blame the state for the problem, saying it has failed to provide adequate guidance for complying with the rules of an arcane and fluid Medicaid billing system that they argue was designed more for health care providers than educators.

Resolution of the dispute over disabled-student reimbursements could have a significant effect on Maine property taxpayers, because they could end up having to fund the federally mandated services.

The issue also underscores the state's difficulty in administering Medicaid while complying with shifting federal mandates in the state-federal health care program for the poor, also known as MaineCare.

The overbilling notices were the result of a state audit done in 2011-2012. Maine Health and Human Services Commissioner Mary Mayhew said the audit found that some districts billed Medicaid for medical services that were actually "educational in nature" and therefore not billable. Her assessment of the audit's findings was contained in a memo to the Legislature's Education and Cultural Affairs Committee, members of which described the situation as "urgent" during a meeting Aug. 1.

The department's explanation for the overbilling notices is of little solace to affected school districts, which rely on reimbursements to pay for services mandated by the federal Individuals with Disabilities Education Act.

"We've operated with the best available information," said Laurie Lemieux, director of special education in the Auburn School District, which recently learned that it owes the state more than $379,000. "I don't want to keep making mistakes. That's why we've repeatedly asked the state to tell us how to do it correctly."

Robert Nadeau, an attorney hired by several of the school systems accused of overbilling, said other districts receiving violation notices included:

RSU 38, covering the Maranacook region, owes the state about $847,000.

SAD 52, including Turner and Leeds, owes about $336,000.

SAD 15, including Gray and New Gloucester, owes about $120,000.

The state contends that it held two public hearings and reached out to schools when the administration of then-Gov. John Baldacci changed reporting guidelines at the federal government's request in 2010.

LePage administration officials at DHHS now say they're operating under the guidance of federal regulators, who have called for stricter state oversight of school-based Medicaid billings and who could decide to do their own audit.

The threat of a federal audit is fresh for DHHS, which was notified in April by federal Department of Health and Human Services auditors that Portland schools had overbilled Medicaid by more than $667,000 in other categories of services. In its report, the federal Office of Inspector General cited a number of infractions, including services provided by "unqualified providers," or receiving money for rehabilitative services provided after a student had dropped out of school.

The federal audit partly attributed the overbilling to inadequate claims monitoring by the state DHHS. Auditors said the agency should "strengthen its oversight of the Maine Medicaid school-based health services program to ensure that claims" complied with federal standards.

The state's justification for the overbilling crackdown doesn't wash for Nadeau. He said Thursday that neither the Maine DHHS nor the Maine Department of Education has explained how districts are to comply with rules tailored for private health care providers. He also disputed DHHS auditors' justification for the overbilling violations, arguing it was inconsistent with the department's own rules and previous guidance provided to school districts.

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