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Kansas school districts are facing a collective recoupment of $11.2 million in Medicaid funds due to a data error in the state’s school-based Medicaid administrative claiming process. The error affected 218 school districts over seven fiscal years, from 2016 to 2022. Student counts for the Individualized Education Program (IEP) ratio were based on billed claims instead of paid claims, resulting in Medicaid reimbursements for services provided to students who were not eligible at the time.
The recoupment amounts vary across districts. The majority (70%) of the impacted districts will owe less than $25,000. Wichita Public Schools faces the largest recoupment of $3,055,478.03. In total, $235 million was paid to school districts during FY 2016–2022, with the recoupment representing approximately 4.4% of that amount.
To address the recoupment, the Kansas Department of Health and Environment (KDHE) has provided school districts with two options:
- Withhold the owed amount from the June Medicaid payment.
- Offset the recoupment over the next four quarters of payments.
For districts owing less than $50,000, the amount was withheld from the June payment. Districts owing more than $50,000 were given the choice between the two options. In cases where districts did not have sufficient funds in their cost settlement, KDHE has worked with them to arrange alternative payment methods, including checks or quarterly payments.
KDHE Secretary Janet Stanek emphasized the department’s commitment to rectifying the error and working collaboratively with school districts to ensure a fair and manageable recoupment process. The agency has been proactive in communicating with affected districts and providing support to navigate the repayment options. For more detailed information, school districts can refer to the full testimony provided to the Legislative Budget Committee on August 26, 2025.
