Topeka The University of Kansas has reimbursed the state for more than $7.1 million after auditors concluded last year that its social welfare school overbilled the state's Medicaid program for services.
Chancellor Douglas Girod formally notified Gov. Jeff Colyer and other state officials of the reimbursement this week in a letter that the university released to The Associated Press. The letter said the repayment occurred in January, and Tim Keck, the state's secretary for aging and disability services, said in an interview that the money would be returned to the federal government.
"Once they discovered it, however they discovered it, they were above-board and very concerned about it," Keck said.
The university had outside auditors review contracts with the Department for Aging and Disability Services after the state agency and the university's Center for Mental Health Research and Innovation failed to agree on the terms of an annual contract in mid-2016.
The center — which closed after losing the contract in dispute — was part of the university's School of Social Welfare. Its Medicaid work included training for community mental health centers. Medicaid provides health coverage for more than 370,000 poor, disabled and elderly Kansas residents.
Having faculty and staff work on Medicaid projects allowed the school and the center to receive federal funds through the state. Auditors concluded that many faculty and staff "did not have an accurate understanding" of what was required to charge their time to Medicaid, resulting in overpayments during a six-year period, starting in July 2010.
Girod's letter also said the university "initiated several personnel actions." University spokesman Joe Monaco declined in an email to name which employees were disciplined or specifically whether they had been fired or faced other sanctions, but he called the response "aggressive."
"Numerous individuals in the school were counseled to ensure they have a better understanding of processes and procedures, and others received some form of formal disciplinary action," Monaco said.
Monaco also said the university is covering the reimbursement with a loan from its Endowment Association and that returning the funds is likely to affect the university's ability to hire staff "in key areas," maintain aging equipment and buildings and "retain faculty who receive competitive offers from other institutions."
The failure of talks in 2016 between the state agency and the university research center over what was then an annual contract of less than $2 million roiled the state's mental health system. The public disagreement was mostly over the department's attempt to move toward setting hourly rates for work done by the center's 16-person staff.
According to Girod's letter, the university received information in 2015 that the School of Social Welfare "may have overstated faculty and staff time" in receiving Medicaid funds, and it conducted an internal audit. The university followed up last year by having two auditing firms review more than 20 contracts dating back to 2008.