City Council: Dept. of Education Has Failed To Secure Needed Medicaid Revenue


Members of the City Council grilled officials from the Department of Education for nearly three hours this morning about its failure to secure tens of millions of dollars in Medicaid revenue owed to the city.

The joint hearing of the council’s finance and education committees today was sparked by reports in December that the DOE has not recovered funds in Medicaid reimbursements for services it provides to special-needs students. At a time of budget cuts and layoffs, this is an inexplicable loss of revenue stream for the city’s school system, council members told officials at the hearing. The DOE claims that it is working to address all outstanding issues and that the challenges can be attributed to new reimbursement requirements that have made the process very difficult for the department — especially given how large New York City’s system is.

The hearing, similar to an education session earlier this year, got pretty heated as council members raised their voices and repeatedly told the three DOE officials in attendance that their answers were not acceptable.

Referring to a comment the DOE has made in the Times about needing more staff to handle the situation, City Councilman Robert Jackson, chair of the education committee, said, “Welcome to the real world! This is totally unacceptable by anyone’s standard. The DOE has been on notice since 2005 that they have to improve their documentation and claim procedures. They should have been more prepared by now.”

“In a time of fiscal austerity, when New York City schools are suffering…[from] budget cuts, I’m outraged. And I’m gonna say that nice and level-headedly because if I really wanted to say it as far as my outrage, I would be screaming right now,” he added. “I’m outraged that the Department of Education has not done their job…The question is, who is accountable for this?”

City Council Speaker Quinn also raised her volume when she stopped by the hearing to pressure the DOE to address the problem immediately — pointing to the recent layoffs of 656 teacher aides, which she said could’ve possibly been avoided if the funds from Medicaid were in the hands of New York City.

“What I can’t understand is why, if there’s a revenue stream available to us in the city of New York, we aren’t doing everything we can, as a city…to get every dollar we can out of that revenue stream,” she said.

“The last place I want to leave any money is Washington — let me be perfectly clear. We need it here and we have clear uses for it,” she added.

The DOE’s chief operating officer Veronica Conforme responded to the criticisms, saying, “We recognize our current fiscal situation, and we are working hard to implement an agressive plan that provides a long-term sustainable solution to our students and our schools.”

Conforme explained that the city has struggled to secure reimbursements, in part because it has been forced to rely on both Medicaid, a medical service model, and Individuals with Disabilities Education Act, an education service model, making it difficult to navigate often contradictory rules. New obligations have become incredibly burdensome, she said, adding that the DOE has had to build systems similar to hospitals and healthcare institutions.

“In a system as large as ours, with approximately 175,000 students with [Individualized Education Programs], meeting the new…requirement has been a significant…investment in order to build a long-term solution,” she said. Looking forward, the DOE is building a “claim generation system,” she said, that will gather data on providers, students, and services. Conforme said the department is also training teachers and providers on the use of the new system.

At one of the more heated moments of the hearing, Jackson even told DOE officials that many of them would’ve been fired if the department was a private corporation.

Manhattan Borough President Scott Stringer, who Quinn praised in her remarks (both are mayoral hopefuls), stopped by to offer some testimony, saying, this failure is unacceptable as working class families are struggling to make ends meet.

“It’s disturbing that the DOE is failing to stretch its dollars and is instead paying bills to the federal government,” he said.

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