New York City’s public schools have missed out on an overwhelming $431.6 million in Medicaid reimbursements, according to an audit conducted by the city comptroller’s office. This financial oversight pertains to services rendered to students with disabilities but not billed to the federal government.
Covering fiscal years 2023 to 2025, the audit revealed that approximately $273.4 million was left unclaimed for services like occupational therapy, physical therapy, and speech therapy. This amount represents roughly 46% of the total services provided to the students.
Additionally, the comptroller’s office discovered $132.7 million in mandatory services for students with disabilities lacked the necessary documentation to secure federal reimbursement.
“The failure to secure Medicaid reimbursements that the city is entitled to is not just a financial issue; it calls into question the efficacy of government operations that New Yorkers rely on,” stated City Comptroller Mark Levine.
This audit follows a similar report from 2021, which identified that public schools were not applying for Medicaid reimbursement for eligible services provided to disabled students, despite federal provisions allowing for such compensation.
But the new audit found the school system deliberately chose not to seek repayment in a slew of instances — including for 10 federally-covered services, like psychological counseling for certain students — losing at least an additional $25.4 million in the three-year period.
“NYCPS (New York City Public Schools) continues not to seek reimbursement for a significant percentage of encounters that are legally reimbursable,” the report said. “In some cases, it chooses not to; in others, processes for collecting documentation needed to seek reimbursement from Medicaid are ineffective.”
City public schools are required to provide eligible students with various rehabilitation programs, but the audit also found no record of nearly 20% of all services they were mandated to provide.
The Department of Education had adopted only three of the 30 recommendations given in 2021, and eight that were partially implemented included – with a total of 19 actionable steps left completely unaddressed.
The DOE has a whopping near $45 billion budget, the most of any city agency.
A spokesperson for the DOE argued the comptroller’s report contained “assumptions and misconceptions,” and overstated what the agency can be reimbursed for in the current structure.
“Our priority is to provide high-quality services to every student who needs them while maximizing available funding to strengthen those services,” the spokesperson said in a statement.
“We will continue pursuing every operationally feasible reimbursement opportunity to maximize available resources and ensure every student receives the resources they deserve.”