Medicaid Reimbursement sparks budget controversy between town and schools

Medicaid Reimbursement sparks budget controversy between town and schools

Katie Landeck
News Staff Writer


WINCHENDON — When the Winchendon School District first started filing for Municipal Medicaid Reimbursement almost a decade ago, the town and school committee came to an agreement — the town would keep the bulk of the money and the school district would receive 20 percent the first year of the funding “for efforts they put in,” — according to the original agreement.

Per initial negotiations, the second year the school district’s share of the funds would decrease to 10 percent.

The town is under no legal obligation to share the reimbursement, according to Town Manager James Kriedler, but chose to in order to give local schools an incentive to file the paperwork.


With the support of the town, the arrangement was later tweaked to allow the school district to continue to receive 20 percent of the reimbursement, which equals between $25,000 and $40,000 each year.

The deal worked well until recently, when Mr. Kriedler learned the schools were using UMass Medical School to file a portion of the paperwork — a move he says violates the original agreement. He also discovered UMass Medical takes 4.25 percent of the reimbursement, a fee the town has been paying 80 percent of.

“The school department is to incur the burden of the administrative work involved,” Mr. Kriedler said. “They may be doing the minority or the majority, but they made the decision to pay all of it.”

According to school officials, the district takes on the majority of the cost of filing for medicaid reimbursement. Filing for the reimbursement is a two-part process.  The first part involves the collecting of expenditure information and completion of time studies to show how much of an employee’s work day is dedicated to compiling that information. The second part involves what Superintendent Dr. Salah Khelfaoui calls intensive paperwork. This stage demands knowledge of several privacy laws, and it is not unusual to use an outside contractor to file it.

“UMass Medical is a state approved outfit,” he said. “They have the expertise to file the report.”

The school district has been using UMass Medical for eight years, according to Dr. Khelfaoui.

Furthermore, Dr. Khelfaoui says the district is spending more on filing for reimbursement than the 20 percent it receives from the town. He noted that one of the special education secretaries spends 40 percent of her time on filing for the reimbursement and that many other professionals — including speech therapists, occupational therapists, physical therapists, mental health providers, school guidance counselors and nurses —  all spend time on it.

“We have always looked at it as a service to our town,” he said.

In the Board of Selectman meeting Dec. 16, Mr. Kriedler asserted his issue was not using UMass Medical, but that the town was paying for it.

It was discovered at the meeting that the school district had not used their share of the reimbursement — which amounts to $64,453 — in the last two years.

“That tells me they don’t need those dollars,” Mr. Kriedler said. “And I do.”

As a result, Mr. Kriedler plans to recommend reducing the school district’s share of the reimbursement to 10 percent. School officials oppose the reduction and say not using the funds was an honest mistake.

The reimbursement money is given to towns as general fund revenue, according to state department of revenue spokesman Daniel Betrand.

“As such, this revenue may be appropriate for any lawful purpose,” he said.

In the October 2012 and May 2011 town meetings, the town appropriated the 20 percent to the schools. The monies are supposed to be used in the fiscal year they are given, but because of the timing of the academic fiscal year, this is impossible, according to Dr. Khelfaoui.

The town accountant told the schools that the money could be put in a revolving fund and saved for the next year, according to Dr. Khelfaoui.

“When I joined the job, I was told the exact same thing,” said Dr. Khelfaoui. “That they could be used as an emergency fund.”

So when Dr. Khelfaoui realized there was a deficit in the food services budget and athletics budget, he tried to use the reimbursement funds — only to be stopped by the town accountant. Because the monies had not been used in the year they were appropriated, the funds had gone back to the town as free cash. Additionally, it is unlawful to use the funds offset deficits in athletics and food services.

Athletics and food services represent a special type of revolving fund called actual collections. According to state department documents, these programs can only be covered by “actual collections on hands and available.” This means, for example, the football deficits can only be covered by ticket collections and the fee players pay to play.

Regardless of the legality of using the funds to cover the athletics and food service deficit, the town manager and school committee are still expressing concerns over who deserves the approximately $65,000 that has become free cash.

The question will likely be settled at the Special Town Meeting on Dec. 30, as both parties have articles on the warrant to address the issue..

Mr. Kriedler says the money should be put towards a transportation deficit, while the school district contends the funds should be appropriated back to them.

“The money is definitely school money,” said Dr. Khelfaoui.