New York City, State agree to repay more than one-half billion in Medicaid claims

When it comes to reimbursement disputes, this one was a whopper. New York State and New York City officials have jointly agreed to repay the federal government more than half a billion dollars for what federal officials say was improper Medicaid claims, averting what New York leaders say could have cost them an additional billion dollars in expenses if they pursued things further in court.

Under the terms of the settlement, the city will repay $1 million, and the state will pay about $332 million, as well as giving up $107.9 million in Medicaid claims now owed by the feds. All told, this is the largest recovery of Medicaid funds in history, federal officials say.

Though the agreement doesn't require the state or city to admit wrongdoing, it does require the state's Department of Education to subject to independent monitoring of its programs financed by Medicaid, including speech therapy and psychological counseling for schoolchildren.

Such services are at the heart of the dispute. It was kicked off by False Claims lawsuits filed by a New York-based speech therapist who claimed that county and school district officials had billed improperly for her services. In investigating the complaints, HHS conducted audits of the school Medicaid-based services, and found evidence that most school Medicaid claims didn't meet federal requirements, and that in many cases there wasn't evidence services were even provided.

To learn more about this case:
- read this piece in The New York Times