By Dave Ranney
KHI News Service
TOPEKA, April 10
– Officials are putting together a governor”s budget amendment they say is needed to offset the loss of millions of dollars in federal Medicaid payments to fund special education programs.
“I don”t have a number yet, but it”s going to be millions of dollars,” said Duane Goossen, director of the Division of Budget. “We”re not expecting it to be a small item.”
Key legislators on House and Senate budget committees said they expect to be asked for $25 million to $30 million more.
The amendment, to be considered in the upcoming veto session, would mean less money for legislators to divvy up among competing programs during final deliberations later this month.
School officials say they”ve been told to expect their federal Medicaid receipts
– about $38 million annually statewide
– to be cut by half to two-thirds, starting July 1.
“We got $6 million from Medicaid this year. It looks like we”ll be getting $4 million less next year,” said Diane Gjerstad, a spokeswoman for the Wichita public schools.
Most of the payments are for physical, occupational and speech therapies.
Audit consequences
The loss in federal aid was driven by a series of federal audits last year that questioned the procedures Kansas used to figure school districts” special education costs.
“The issues were multiple,” said Barb Langner, an associate professor at the University of Kansas School of Nursing who is helping coordinate the state”s response to the audits.
Issues cited in the audits included:
*
School districts billed Medicaid for a year”s worth of services rather than the allowed nine months.
*
Inaccurate time studies were used in calculating school districts” aadministrative costs.
*
Services often were provided without having been prescribed by a physician.
*
School districts billed Medicaid, using a “bundled” or average-cost rate per child rather than billing for services that were actually provided.
The federal government isn”t just cutting back on the money it provides Kansas for special education; it also is requiring a new accountability regime that has school officials worried.
“Basically, the feds have said we don”t have the methodology in place to support bundled rates and we”re to go back to fee-for-service,” Langner said. “They have a lot of difficulty with there not being a paper trail that lets them see, incident by incident, the services provided.”
In Kansas, school districts switched to bundled-rate billings in the mid-1990s in an effort to increase federal Medicaid receipts. Returning to a fee-for-service system won”t be easy.
“They”re requiring us to record time spent on services in 15-minute increments,” Gjerstad said. “That”s a massive change for us
– we have 7,000 kids in special ed
– and it”s going to be a huge increase in paperwork for people who really ought to be spending their time working with the kids.”
Major undertaking
Getting doctors to prescribe services will be a major undertaking as well, said Mark Hauptman, president of the Kansas Association of Special Education Administrators.
“Up to this point, we”ve only had to do that for physical therapy,” said Hauptman, who”s also an assistant school superintendent in charge of the special education programs in Hays. “Now, we”ll have to do it for all services, annually.”
Hauptman said program directors will be asking their students” family doctors to prescribe services they may not have considered in the past.
“Let”s say a child needs and is receiving speech therapy,” Hauptman said. “Well, that child”s doctor may not have seen that student for that issue. But for those services to continue, we”re going to have to get the doctor to prescribe them. I assume we”ll have varied success in doing that.”
Hays has almost 550 students in its special education programs.
Hauptman said he”s expecting “at least a 50 percent reduction” in the Hays school district”s Medicaid revenues.
“But there”s so much we don”t know
– that nobody knows,” he said. “We”re going to need to sort out how many kids are eligible for Medicaid and what services are in their IEP (Individualized Education Program plans. Then we”ll have to get consent to contract their primary care physician and see what services they will prescribe. And then we”ll have to see how much Medicaid will pay.”
Replacing federal dollars
Last year, Kansas spent $624.7 million, including $38.2 million in federal Medicaid receipts, on special education programs for 65,246 students.
Led by the Division of Budget, several state officials Friday will come up with a “consensus estimate” of how many students will be affected by the July 1 drop in Medicaid funding.
The estimate, in turn, will define the size of the
governor”s budget amendment. Whether legislators adopt the amendment remains to be seen.
“It”s something when we come back that we”ll definitely have to address. And most, if not all, senators are committed to finding that funding,” said Senate Ways and Means Committee Chairman Dwayne Umbarger, R-Thayer. “I think we”re going to look at that upwards of right at $30 million dollars. This isn”t the first program we”ve had to replace federal dollars on.”
Still, the additional expenses are expected to intensify pressure on other program funding. .
“It makes groups like ours,
the Big Tent Coalition,
very concerned as to how much money will be available for Home and Community Based Services,” said Robert Harder, a spokesman for the coalition of 75 advocacy groups for the poor and for people with disabilities.
Umbarger said he”s hoping the state”s economy will generate enough additional revenue to offset both the federal Medicaid shrinkage and demands for additional services.
“We”re hoping that the revenue estimates are up and going again and that we enjoy the unexpected increase that we”ve enjoyed in the past,” he said.
“One thing that does give a little different perspective is that we did get the gaming bill passed,” Umbarger said. “There may be some legislators of a mindset to leverage some of that future revenue, even today. That is an option to consider. Not that I”m advocating doing that, but that will play in the mindset of many legislators.”
House Social Services Budget Committee Chairman Bob Bethell, R-Alden, said he expects the amendment will be adopted.
“Morally, I think we have to go along with it,” he said.
The Division of Budget also is preparing another amendment to cover changes in the state’s foster care system and the launching of a managed care company to oversee changes in the community mental health system. According to the Department of Social and Rehabilitation Services, that amendment is expected to be between $10 million and $25 million. It, too, is driven by
federal audits.
.-Dave Ranney is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at
dranney@khi.org
or at 785-233-5443, ext. 128.