KDHE says seven-year school Medicaid recoupment stems from numerator error; Wichita district officials say lack of data access prevented earlier detection

State and local officials told the Legislative Budget Committee on Aug. 15 that an administrative claiming error in school-based Medicaid cost settlements requires recoupment of previously paid amounts after a seven-year lookback.

Janet Stanek, secretary of the Kansas Department of Health and Environment (KDHE), and Deanna Beard, Medicaid coordinator for USD 259 (Wichita Public Schools), both described the same root cause: the numerator used in KDHE’s paid-claims calculation for school administrative claiming was based on billed claims rather than paid claims, which produced materially different ratios and led to an overpayment calculation over a seven-year period.

KDHE said the department’s fiscal intermediary, Gainwell, and its consultant PCG used incorrect numerator data during the calculation. KDHE described the issue as an error that persisted in prior years and said Medicaid rules require a seven-year lookback when an error is found. KDHE said the total recoupment for the seven-year period is $11,210,060 and that the total disbursed to districts for those years was about $235,000,000; KDHE told the committee most affected districts faced recoupments under $25,000, while Wichita Public Schools carries the largest recoupment at roughly $3.2 million.

KDHE said it worked with the Department of Education and affected districts to establish payback plans; for larger recoupments KDHE reported offsetting recoupment from scheduled payments and offering multi-quarter repayment plans to meet CMS requirements that recoveries occur within the federal one‑year time window for reimbursement reconciliation.

Wichita Public Schools officials told the committee they repeatedly notified KDHE and contractor staff that the numerator calculation did not match the district’s internal reconciliation of billed versus paid claims and that district staff asked for the numerator data to validate the calculation. Wichita said it was not provided that line‑level numerator data, which prevented earlier detection and correction. Wichita said it performs its own in‑house Medicaid billing and cost settlement reconciliations and estimated its repayment obligation at about $3.2 million; district leaders said they will use reserves to meet the obligation if necessary.

KDHE said it has undertaken an internal review of consultant processes, added senior staff resources, scheduled statewide workgroups and committed to annual training for school district staff to reduce the odds of a recurrence. KDHE also told the committee it is holding contractors more accountable and is working with districts on the prior-period adjustment forms and expedited collection of documentation.

Why this matters: School-based Medicaid claiming is a revenue stream that helps districts fund health services in schools. The recoupment affects districts differently; small amounts are manageable for some, but larger recoupments create budget pressures in larger districts and raise questions about transparency and contractor oversight.

Ending: KDHE told the committee it will provide additional detail and follow-up to the Legislature; Wichita leaders asked for better data sharing and earlier access to the numerator and calculation steps so local districts can validate reconciliations before adjustments become final.