FOR IMMEDIATE RELEASE: May 5, 2004

Schumer Tells Feds To Drop Plan That Could Take $172 Million Away From New York Schools

Last week it was reported that the federal gov’t is considering plan to make NY pay back millions in school money because of bookkeeping errors made on Medicaid claims – Feds plan to audit several NY programs, meaning situation could get even worse

Schumer says feds should not punish NY school children for government's mistakes

Schumer: Feds should spare NY schools from foot

After reports last week that a federal audit of Medicaid payments might lead the federal government to take back millions of dollars granted to New York schools, US Senator Charles E. Schumer today urged the Department of Health and Human Services (HHS) to drop any plans to take the money back. In response to HHS’s claim that New York schools did not meet documentation and certification requirements on many Medicaid claims, Schumer today called for a clarification of the federal regulations for Medicaid payments to New York schools and asked HHS to help the State and the schools when making claims in the future.

"This is the meanest way for the government to help solve its deficit problem that I have ever seen. For the federal government to even think of taking back this kind of money from the state or any city in the state is nothing short of an outrage,” said Schumer in response to the federal government's actions. “They approved these claims years ago, and now, ex post facto, they are going after the state and only hurting New York school children in the process. What the federal government needs to do is clarify the regulations prospectively and not exact any retroactive penalties on the backs of New York's children."

According to published reports, an audit of claims for speech programs approved by the federal Medicaid program conducted by the Office of the Inspector General (OIG) concluded that more than $172 million of the payments to schools should not have been made. The Medicaid claims were submitted by 711 New York schools and pre-schools from September 1, 1993 to June 30, 2001 totaling almost $362 million. Out of 100 previously approved sample claims examined, the OIG determined 56 of the claims did not comply with federal regulations for the referral of speech services, the certification of speech pathologists, and other service documentation.

Schumer said that federal attempts to recoup the already approved money would be a huge blow to New York schools. “This year it seems the feds are shortchanging schools every way you look -- whether its No Child Left Behind or special ed funding or now this, the feds are not coming through with funding promised to our children. At a time like now when schools across the state continue to face dire budget crunches, it's hard to believe they're talking about taking back what little money Washington has sent.” In response, Schumer today detailed the following three-point plan:

• Block the feds from taking back the funding: Schumer today urged the Department of Health and Human Services to drop any plans to take back money it already granted to New York schools. Schumer said that if necessary, he will introduce legislation that would prevent the federal government from doing so.

• Clarify the regulations schools must follow when submitting Medicaid claims. Schumer said that the bookkeeping errors that occurred were the result of unclear rules that need to be adjusted so that schools can more easily comply with them. Schumer said that HHS should make its rules more clear so that future noncompliance and misunderstanding can be averted.

• Once the rules have been clarified, dispatch a team to help New York and its schools complete the claims. The best way to ensure that claims are submitted in an accurate and efficient manner, Schumer said, is for HHS to send experts to each region to help explain the rules. Leaving localities to correctly fill out complicated claims with little or no assistance is a recipe for disaster, he said.

The audit of speech claims is the first in a series of audits of school Medicaid claims from New York which could result in the recommendation that the state pay back millions more. Other audits will focus on the Medicaid claims made by upstate schools for transportation services for special needs students, retroactive funding paid at the beginning of the Medicaid program and all Medicaid claims paid to the New York City Board of Education. OIG officials expect the transportation claims audit and the New York City Board of Education audit to be completed in the next few months. Last week, it was reported that the federal government could seek more than $330 million from the New York City Board of Education alone.

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