TRENTON — The battle has taken place almost entirely on paper, in footnotes debating arcane Medicaid rules, and in snippy remarks deep inside legal filings. New Jersey and the federal government have been fighting over $50 million for so long that the battle hinges on medical records that date to the Whitman administration. Now, after years of waiting and...
Attorney General Paula Dow at a press conference in April. Dow has argued New Jersey shouldn't have to pay back $50 million allocated to schools with therapy programs because of missing paperwork.TRENTON — The battle has taken place almost entirely on paper, in footnotes debating arcane Medicaid rules, and in snippy remarks deep inside legal filings.
New Jersey and the federal government have been fighting over $50 million for so long that the battle hinges on medical records that date to the Whitman administration.
Now, after years of waiting and wrangling, one of the last briefs is due today, and a federal judge is expected to weigh in soon afterward.
Under federal law, school districts providing services like speech therapy, physical therapy and psychological counseling to disabled students can get part of their costs reimbursed by Medicaid.
But the law requires them to save every last scrap of paper — prescriptions, transportation logs, students’ files — and federal auditors and lawyers say New Jersey has not furnished all those documents in 105 of 150 randomly selected billings from 1998 to 2001. They then extrapolated the results to all school districts and arrived at $50 million.
If New Jersey loses its appeal, it could be forced to return the money plus a year’s worth of interest.
The U.S. Department of Health and Human Services can recover the money by withholding future funds if it wins. A spokesman for the Treasury Department, Andy Pratt, said the state is ready to make the payment in a worst-case scenario, though it is seeking a settlement for a lower sum. New York City schools settled a similar lawsuit, seeking $1 billion, for $540 million in 2009.
"In the event the ruling favors the federal audit, there would be no impact to any children receiving these services," said Nicole Brossoie, a spokeswoman for the Department of Human Services.
She said more than 60,000 disabled students get treatment through their school districts.
Arguing the state’s case, Attorney General Paula Dow says New Jersey is being punished over technicalities and that the federal government used "fundamentally flawed" math to calculate the state’s debt.
"Courts have held that ‘failure to present statistically significant’ proof is fatal to a case," she wrote in a brief filed in January. In another brief, a statistician at DHS criticizes the feds’ methodology, saying instead of 150 billings, auditors should have reviewed at least 300.
The federal government, citing its own statistician, called Dow’s argument "strange and misleading" in a brief filed last month.
Dow has also argued that even though some prescriptions were missing, that doesn’t mean they don’t exist. It’s more likely that nurses and schools had them on hand when they were medicating children, she said.
"Not only would the nurse be out of compliance with school board policy, but he or she would be liable for prosecution" otherwise, the brief said.
"This argument is quite clever but ultimately tenuous," was the government’s response. "Auditors are not allowed to make such assumptions."
And the squabbling goes on.
In her brief, Dow tries to prove 44 of more than 100 disputed billings were legitimate. But after reviewing her claims, the federal Health Department was barely swayed and only conceded three of them.
If the Christie administration loses the case, it can appeal to a higher federal court.
Lee Moore, a spokesman for Dow, said "that would be determined if and when an unfavorable ruling was made."
Diana Autin, co-executive director of the Statewide Parent Advocacy Network, said that despite all the paperwork and jargon, the legal question boils down easily.
"Anyone who is accessing Medicaid dollars should know the Medicaid requirements," she said, referring to the state’s school districts. "It’s a fairly record-intensive process."
A common complaint Autin says she gets every year from parents is that schools aren’t providing all the health services their children, many of them severely disabled, are supposed to be getting.
"That raises the question, to what extent is the inability of schools to find the documents a service-delivery issue or a record-keeping issue?" she said.
Jarrett Renshaw contributed to this report.