Maryland needs to pay back almost $33 million to the federal government for false claims on Medicaid payments for school-based health services, according to a newly released inspector general audit.

The audit revealed that the state has received refunds for submitted items unelated to health care in the schools, such as salaries for administrators.

According to the written report by the federal Department of Health and Human Services, the inspector general probe aimed to determine whether the claims for Medicaid reimbursement complied with approved federal requirements.

The answer gleaned was, in many cases, no.

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For instance, the inspector general’s office found that of the $578 million in Medicaid refunds Maryland received chiefly for transferring special educaation students to other academic institutions, $35 million was “not health related” and therefore against the rules.

“These [non-allowable] costs included tuition, room and board, educational billing and instructional services,” the report states.

Maryland officials have 30 days to respond to the audit findings.

Because the month window is not yet up, state Department of Education spokesman William Reinhard would only tell The Examiner that his agency is evaluating the report.

“We’re working with the [state] Department of Health and Mental Hygiene to respond,” Reinhard said Tuesday. “The negotiation process is just beginning.”

The Department of Health and Mental Hygiene administers the Medicaid program and has an agreement in which the state Department of Education provides school-based health services through the local school systems.

Both state agencies then set the rate that the federal government will pay the state as a refund.

Maryland’s rate has remained at $82 per service since 1995.

Auditors indicated in their report that the rate is twice what it should be.

The state’s official response in the audit is the rate Maryland uses “reflects education costs that are not allowable and that the $82 rate should be reduced.”

State authorities so far have not agreed to a specific refund amount.

Maryland is not the only state that the inspector general’s office has investigated in terms of false claims on school-based health care.

Health and Human Services has done audits of a handful of other states to determine whether costs claimed are allowable.

In nearly every case, the agency has recommended million-dollar refunds to the federal government.

dlevitz@dcexaminer.com