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Inspector General audit finds errors in school‑based Medicaid claims; recommends moving payments to MCOs

House Committee on K-12 Education Budget · January 29, 2026
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Summary

The Kansas Inspector General reported errors in school‑based Medicaid fee‑for‑service payments, including $46 million paid in the audit period that CMS expects to be handled by MCOs, invalid provider identifiers, missing parental consents and background checks; IG recommends shifting payments to managed‑care organizations and improving oversight.

Steve Anderson, Inspector General, told the House Committee on K‑12 Education Budget that his office found numerous problems in school‑based Medicaid fee‑for‑service reimbursements for services delivered January 2021 through January 2023. "We paid out over $46,000,000," Anderson said, describing fee‑for‑service payments the IG believes should have been the MCOs' responsibility under managed care.

The audit focused on three questions: whether KDHE had effective systems to process and track claims, whether policies aligned with federal guidance, and whether IEPs and parental consents supported medical necessity for claims. Anderson said auditors found widespread documentation and processing errors, including an invalid national…

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