Topeka State officials and the federal government are at war over tens of millions of dollars that buy health care services for poor and disabled Kansans.
So far, Kansas has lost $32.4 million in Medicaid funding and could lose upwards of $80 million more, officials said Tuesday.
The losses are attributable to federal audits of how Kansas spent funds under Medicaid's school-based health programs from Oct. 1, 1997, to Sept. 30, 2003.
State Sen. Jim Barone, D-Frontenac, said he feared the lost funds would result in Kansans not getting needed assistance.
"Somebody has to be shorted that $32 million; some Kansas citizen, someplace," Barone said during a meeting of the Legislative Budget Committee.
But Scott Brunner, director of the Kansas Medicaid assistance programs, said the state hoped to handle the problem without reducing services.
More on the Medicaid audits
- Full testimony of Scott Brunner, Director of Kansas Medical Assistance Programs (.doc)
- Office of Inspector General: "Review of Kansas's Mental Health Center Medicaid Administrative Cost for the Quarters Ended December 31, 2002, and March 31, 2003" (.pdf)
- Office of Inspector General: "Review of Medicaid School-Based Services in Kansas-Bundled Rate Development" (.pdf)
- Office of Inspector General: "Medicaid School-Based Services in Kansas - Adjustment of the Bundled Rates" (.pdf)
- Office of Inspector General: "Review of School-Based Health Services in Kansas" (.pdf)
- Firm's Medicaid advice may backfire for state (08-28-06)
- Medicaid paybacks may cost millions more (07-13-06)
- Kansas must repay $18.5M for Medicaid misspending (06-30-06)
"We're trying to manage cash flow as best we can knowing that there are shortages coming down the road," Brunner said.
But he said legislators may be asked to replace the federal funds with state tax dollars when the next session starts in January.
The audits by the U.S. Health and Human Services Office of Inspector General have focused on Medicaid funds spent in school districts.
One audit claims that in some instances payments were made for services that weren't delivered.
Brunner denied the allegation.
"We have challenged this finding in total," he told lawmakers.
The HHS Office of Inspector General reviewed 300 claims from the Wichita, Kansas City and Salina school districts and said 217 claims were for services not rendered or services that didn't include the required prescriptions or referrals. Applying that unallowable cost to the entire amount of federal funds that Kansas receives under the program could result in a loss of $80 million, lawmakers said.
Brunner said Kansas is among many states facing audits as the federal government tries to tighten Medicaid expenditures.
Officials with the HHS Office of Inspector General declined to comment on the audits or respond to submitted questions from the Lawrence Journal-World.
"This is part of our workplan," Laura Bradbard, spokeswoman for the HHS Office of Inspector General, said of the audits.
Kansas failed to follow federal guidelines in several areas, according to the audits.
The state has challenged some of the federal findings but accepted others. For example, the state wrongly advised school districts to claim Medicaid costs for 12 months instead of the nine-month school year.
The federal government drew down the state's share of Medicaid funding by $13.9 million in May, and will make another $18.5 million drawdown in November, Brunner said.
The reduction represents less than 3 percent of what the state receives annually for Medicaid from the federal government.
In all, there are at least five audits of Medicaid payments made by school districts. Kansas received approximately $135.2 million during the period considered by auditors.
Members of the legislative committee said it was difficult dealing with the federal government's rules. In some instances, federal officials found Kansas failed to implement practices that would have resulted in the expense of more federal dollars, they said.
"This is a complicated system, and it's hard to make it work correctly," said Rep. Melvin Neufeld, R-Ingalls, chairman of the House budget committee.
Brunner said he hoped the state could resolve all the audit recommendations and findings by the end of the year.