$1.4 Million Dollars: School Medicaid Revenue

One of the items that I missed in the action-packed Ann Arbor school board meeting last week is Pat Green's announcement that she had found $1.4 million dollars for the district. That savings is approximately 10% of the projected cuts needed--nothing to sneeze at--and comes from Medicaid reimbursals that we should have been getting.

I have to admit that when I heard about this, I shouted to my friend, "I had that idea first!" And seriously, I did.

On January 24, 2010 I wrote a piece called Revenue Side, where I stated,

4. Medicaid Reimbursement: Some of the district's special education expenses are Medicaid billable. Currently, that billing brings in about $1 million each year, and is largely handled by social workers. I believe that this is an area where the school district needs to be absolutely sure it is maximizing its billing, and if the billing is spread out, it is likely that it has not been maximized. I don't have local statistics, but a study in New York State of 8 districts found that they were only being reimbursed for about 1/3 of the Medicaid monies that they should be reimbursed for. In the study, some of the reasons that the districts did not get reimbursed included: a) not checking students' Medicaid status regularly (so they would be kicked off Medicaid, and not get back on even though they were still eligible, and the districts would not know); b) waiting too long to send in the claims; and c) not appealing claims that were denied, even if they believed that denial was in error. In those districts, the estimate was that they could triple their reimbursement level! The Medicaid claims submission process should be reviewed from the point of service onward, even if the increase would add $100,000 and not $2 million to the AAPS budget. (And this is true for every district in the county.)

I also mentioned it again a week later, on January 31, 2010, in a post called The Rest of the Story: AAPS Budget Part II (remember, we were doing budget cuts that year as well), where I wrote:

I think I addressed the largest chunk of the budget with my recent post on personnel costs and my post on revenue enhancements, including a look at whether we can increase Medicaid reimbursement. 

At the first of the fall budget forums this year, I mentioned Medicaid reimbursement again to Robert Allen, who told me the WISD handled it (which they do, but apparently they weren't handling it well)--and I'm pretty sure that I wrote something like "maximize Medicaid reimbursement" as a suggestion at both last year's and this year's budget forums.

In fact, the only reason that Medicaid reimbursals were on my radar screen at all is really a fluke. Several years ago, my son was on a baseball team where a few of the players' moms were either speech therapists, occupational therapists, or physical therapists at various school districts. Given that it was May and June, they spent a lot of time discussing how time-consuming the Medicaid billing was for them. Before that, who knew that schools even billed for Medicaid?! Not me.

I'm not really a cynic. Well, sometimes I think my family is full of cynics, but my husband nicely points out that we are optimistic cynics. So by writing this up, I in no way mean to imply that Pat Green (or other school staff in finance or special education) didn't come up with the idea of looking into this on her (or their) own. (In other words, I'm not looking for credit.) It's very plausible to me that Pat Green has had experience with Medicaid revenues in other districts, and in fact may have read the same research study about Medicaid reimbursals that I had read. It's also likely that the Medicaid problem was much more bureaucratic and difficult to untangle than just increasing billing. So that's the optimistic part.

But here is the cynical part.

I did bring up the idea of looking at Medicaid reimbursement nearly two years ago. And perhaps I wasn't the only one to bring it up. For two years, the district has been collecting ideas for budget savings from parents, teachers, and taxpayers. I wonder if they ever looked closely at the items people wrote down? Did they just ignore them? At the fall budget forum I went to, someone suggested scrutinizing the comments on budget saving in annarbor.com, and yes, I am fully aware of how squirrelly those comments are! But there are likely a couple of diamonds in the rough on those budget articles, and I know that I myself have lots of ideas in this blog. No, they are not all good ideas. Some of them are impractical or lousy. But some of them are good!

I just wonder--did anybody really look at all of those ideas that have been collected at the budget forums? In other forums? [Here, by the way, is an obvious plug for the school district leadership to read this blog regularly. It's super easy to become a regular subscriber by clicking on the "Subscribe" RSS feed on the right.] My first recommendation to the school district for budget cuts this year is to go back and read the data and ideas they have already collected.

And by the way, when it comes to Medicaid reimbursement, it could be that other school districts in the county should follow Ann Arbor's lead and be able to increase their Medicaid reimbursement revenues--Saline, Ypsilanti, Dexter, Whitmore Lake, etc. . . are you listening?