School Medicaid scam

The U.S. Justice Department had been investigating whether New York school districts made errors when filing claims for a program that helps them cover services for special education students who are eligible for Medicaid.

The Justice Department has suspended its investigation while the federal agency that administers the program completes its own review, said Schumer, D-N.Y.

Schumer said that if districts made errors, it was because the federal government issued unclear guidelines. "It is absurd to blame individual school districts for problems that were created by Washington, and we're going to keep the heat on until DOJ stops bullying New York's schools once and for all and drops this investigation," he said.

School districts have been receiving Medicaid reimbursement since 1994 for services that include speech therapy, physical therapy, nursing care and transportation. The cost of the program is split between the federal and state governments.

The Justice Department began investigating the Elmira, Ithaca and Ogdensburg school districts after an audit showed the state's interpretation of program rules conflicted with the federal interpretation. The audit was performed by the U.S. Department of Health and Human Services' Inspector General.

Schumer said if the federal government concludes Medicaid overpaid school districts, the districts should not be required to pay back funds.

Instead, he said, the Centers for Medicare and Medicaid Services, the division of HHS that administers the program, should determine what regulations need to be changed, and work with the schools and state to make sure schools comply with the new rules.

Schumer said if the federal government requires school districts to pay back Medicaid funds, the Albany city school district could have to pay back as much as $14.8 million in claims from the past eight years.