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Guilderland Archives — The Altamont Enterprise, August 6, 2009

Medicaid payments to schools halted abruptly

By Melissa Hale-Spencer

Medicaid reimbursements to New York State schools have been temporarily halted, leaving local districts in the lurch.

Governor David Paterson announced a settlement last month — between the state and the United States Department of Justice, which had claimed that more than $1 billion worth of school-district claims were false — by which the state and New York City will repay $539.75 million to the federal government.

An investigation started in 2001 in three upstate school districts as the result of a lawsuit by a whistleblower under the federal False Claims Act. This led to further audits, focused on New York City. Of the roughly $540 million owed to the federal government, $100 million will be paid by New York City, and the state has already paid about $107.9 million, the governor’s office said. The rest of the state’s share will be paid in 10 payments of $33.1 million over a five-and-a-half year period.

“Audits of several districts around the state found problems,” said Jane Briggs, a spokeswoman for the education department, yesterday.  “The state negotiated with the federal government to pay back what the federal government said they owed.”

As a result of the settlement, Briggs said, “The State Education Department and Department of Health are working on a plan, according to the agreement.”

Claims submitted by school districts for services through the end of June will be paid. Claims for services from July 1 on will be paid to districts retroactively, said Briggs. She could not say when the payments would start again, but said that the new plan is to be submitted to the federal government by the end of September.

At Guilderland

The Guilderland School District receives about $170,000 annually in Medicaid reimbursements, according to Assistant Superintendent for Business Neil Sanders. This is for students who receive speech therapy, physical therapy, occupational therapy, or psychological evaluations, he said, and also for transportation costs to these services.

The $170,000 in reimbursement means that a total of $680,000 is being spent on services for Guilderland students.

“The federal government gives back 50 percent on approved services,” said Sanders. “The state takes 25 percent, applied to our state aid, and we get 25 percent.”

“It’s certainly an important revenue source for us,” Sanders said of the reimbursement payments. “But it’s not critical for day-to-day operations. We won’t have to borrow money. It’s more of a cash-flow issue. It’s spread throughout the year anyway,” he said of the reimbursement payments.

Guilderland has an $85 million annual budget.

“The longer it goes on, or if they dramatically change the system,” said Sanders, “that may be a different story.”

At Voorheesville

Voorheesville received about $42,000 in 2007-08 in Medicaid reimbursements, according to the Assistant Superintendent for Business Sarita Winchell. “It’s only for students whose families qualify for Medicaid or for students with certain disabilities,” she said. “For some schools, especially with high poverty, this is a huge amount of money.”

“I budgeted only $32,000 for the upcoming year,” said Winchell. “I would never want to give the impression to people that any amount of money is insignificant,” but, she said, since there’s a “huge lag” anyway between the time the district submits its claims and the time it receives its funds, a delay won’t cause problems.

She went on, “You have to keep rolling with the punches….The percentage used to be really clear. We only keep 25 percent; the rest gets peeled off…The percentage has changed this year. We were going through paperwork” to calculate revenue.

Winchell concluded, “The state is losing all this revenue…They have to pay it back. Where are they going to get the money from?”


For the next fiscal year, Berne-Knox-Westerlo had budgeted $50,000 in revenues from Medicaid reimbursements, according to Superintendent Steven Schrade. “Out of a $20 million budget, it’s not a significant amount of money. It won’t be a big hit for us,” said Schrade.

He also said, “Last year, we did not receive any payments until January. If this is just a temporary stay on reimbursement, we probably wouldn’t feel any difference if the payments started up in the second half of the year.”

He said the difference could be made up by “reduced spending in other areas” and wouldn’t change the services BKW offers to its students.

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