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Dispute blocks schoolsí effort to claim Medicaid

(Published July 14, 2003)


Staff Writer

A dispute within the D.C. government is preventing the D.C. Public Schools from seeking recovery of up to $60 million from previously undocumented Medicaid claims for special education students.

School officials say they want Michael L. Davis, president of Davis & Associates, which designed and implemented the school districtís Medicaid billing system, to help them get the money by using his "contractor copy" of triplicate forms.

But a spokesman for the Districtís chief lawyer said the District is considering legal action to seize Davisí records, rather than agreeing to a tentative deal reached in April with the assistance of Inspector General Charles C. Maddox.

Under the deal, Davis & Associates would participate in the records review process before relinquishing the forms and would receive "appropriate" compensation. Davis said his company developed the record-keeping process without charging the D.C. government as part of a contract that called for paying his company a percentage of recovered Medicaid funding for the 1996-98 school years.

Assistant Superintendent Raymond Bryant, chief of D.C. Public Schools (DCPS) special education reform, said school officials are not standing in the way of making the deal with Davis. An April 9 meeting brought together Davis and his attorney with Jennifer Longmeyer-Wood, an assistant D.C. corporation counsel, and Heather McCabe, executive director of DCPSís Office of Special Education. Karen E. Branson, general counsel for the Office of the Inspector General (OIG), and Victoria Lucchesi, OIG deputy general counsel, attended the meeting as mediators.

"We thought there was going to be an arrangement made where we could pick up records Ö and actually try to ascertain if they would help us with reconciliation from í96 through í99, but to my knowledge nothing has happened since that meeting," Bryant said.

Davis told The Common Denominator that he believes current efforts to block the deal are an attempt to cover up payments that the D.C. government made to the wrong contractor for some of his companyís work. He said he believes his companyís records could help the schools claim federal Medicaid reimbursement of $40 million to $60 million for special education services that already were provided with local tax dollars.

Davis also said he believes much of the $78 million in old Medicaid claims that a recent General Accounting Office report said were written off by the D.C. government in fiscal 2001 can be documented and recovered with his companyís records.

"I want the kids to get the money," Davis told The Common Denominator.

Peter LaVallee, a spokesman for D.C. Corporation Counsel Robert Spagnoletti, labeled the tentative deal with Davis as "frontier justice."

"The bottom line is, whatever claim [Davis] may or may not have against the District, it does not allow him to hold records he does not own," LaVallee said.

Councilman Kevin P. Chavous, D-Ward 7, who chairs the committee with oversight of the schools, expressed frustration over the corporation counsel blocking the deal.

"I am beyond trying to understand some of these bureaucratic decisions," said Chavous, who acknowledged that Davis also made him aware of his companyís copy of records that could help the city claim Medicaid money.

Chavous said Davis "actually was providing some value" to D.C. Public Schools when his company was replaced with another contractor by the Districtís chief financial officer.

"DCPS didnít have any capacity to capture those funds [until Davis & Associates created its system] and we were missing out on millions of dollars," Chavous said.

LaVallee initially confused a reporterís questions about the special education Medicaid funds with a lawsuit Davis & Associates has filed over D.C. General Hospital Medicaid and Medicare funds. That suit, which was dismissed on jurisdictional grounds and is on appeal, claims Davis & Associates has not been paid for its role in recovering more than $200 million of Medicare and Medicaid payments for fiscal 1999 due to the cityís alleged diversion of those funds into accounts that were not under the hospitalís control.

Assistant Corporation Counsel Longmeyer-Wood, who attended the April meeting at the inspector generalís office, also represents the city in the D.C. General lawsuit. She did not respond to a call for comment.

"Certainly anything [Davis] is owed will ultimately be paid to him," LaVallee said.

Councilman Jack Evans, D-Ward 2, who chairs the councilís Finance and Revenue Committee, wrote Chief Financial Officer Natwar M. Gandhi on March 25 to inquire about efforts to resolve the D.C. General contract dispute with Davis & Associates.

"I am informed that you have indicated to members of Congress and their staff that this matter would be resolved as soon as an audit/review is completed to determine the amount owed the contractor, and that the audit in question is now complete," Evans wrote.

Evans asked Gandhi to provide him with a copy of the audit and detailed information about the federal Medicaid funds in dispute. An aide to Evans said the councilman has received no response to his letter. A spokesman for Gandhi said the CFO has referred the letter to the corporation counsel.

Copyright 2003, The Common Denominator