Lawmakers, advocates and parents told amNewYork they’re fed up over the years-long issues with special education services at the York City Department of Education, which they said contributed to the agency leaving $431 million in Medicaid reimbursements on the table from mid 2023 to mid 2025, according to a new comptroller's audit, released Thursday.

For more than a decade, teachers, education advocates and the city’s financial watchdog have raised the same complaints. During a 2021 audit, the comptroller's office estimated that for eligible occupational therapy, physical therapy and speech therapy sessions, the DOE failed to claim an estimated $179.6 million to reimburse the city for legally mandated special education services like PT, OT and ST.

Chair of the City Council Education Committee and former special education teacher, Eric Dinowitz (D-Bronx), told amNewYork in a statement that it was long past time the DOE corrected the systemic failures that were costing the city millions each year.

“Federal Medicaid reimbursements provide crucial money for our schools, and leaving $431 million of this federal money on the table is completely unacceptable,” he said. “Back when I was a UFT (United Federation of Teachers) chapter leader, we were already flagging this exact issue, and past comptroller audits have echoed those warnings for years.”

Documenting Special Education Services

The comptroller’s audit determined that the majority of Medicaid reimbursement dollars which DOE failed to claim stemmed from issues with documentation. Medicaid requires specific documentation like students’ Individualized Education Plans (IEPs), consent forms, orders for services, session notes and progress updates.

But for the 17.2 million reimbursement-eligible therapy service sessions, close to half lacked the proper forms and documentation to reach the evidentiary threshold required to unlock money, according to the audit.

"Losing out on dollars meant to support our students because of missing documentation or unfilled paperwork is a longstanding administrative breakdown we cannot afford to keep tolerating,” said Dinowitz.

Leonie Haimson, executive director of the nonprofit education advocacy organization Class Size Matters, drew a direct line from fumbling Medicaid reimbursement to the DOE’s continued use of a much embattled data tracking tool, the Special Education Student Information System (SESIS), which DOE announced it would replace seven years ago.

“One of [the] most disturbing findings in this audit to me is that DOE is still using SESIS, the highly flawed special Ed reporting system that they announced they’d decided to replace back in 2019- tho[ugh] they say they are still working on developing a new system,” Haimson said in a post on social media.

The SESIS system has been plagued with trouble since it was rolled out in 2011, garnering widespread criticism and prompting multiple lawsuits. Teachers complained of snail-like speeds and frequent glitches wiping away progress. One educator, who asked not to be identified, described what experiences they’ve had with SESIS as “infuriating.”

They also raised privacy concerns, telling amNewYork that when using SESIS, an instructor can see information about all students with IEP’s, even ones they do not directly work with, something advocates are concerned violates the Family Educational Rights and Privacy Act (FERPA).

In 2023, a citywide panel approved a $43 million contract to replace the infamous system in favor of a custom-built tool made for the city by Milwaukee-based tech company Experis. But after viewing a beta version a few years ago, parents and advocates have all said that they’re in the dark about when, or if the new system will ever materialize.

DOE did not respond to questions about the status of the new system, or if it’s even still planned.

The audit noted that DOE planned to roll out MedSys, a system designed to include “comprehensive monitoring and an alert mechanism to correct validation failures” in the Medicaid reimbursement claims process. A limited version of the system is supposed to roll out in July, with a full citywide rollout completed by December, according to the audit.

A smaller number of reimbursement funds, estimated at around $25 million, were never claimed because NYCDOE only sought reimbursement for three out of the 10 services covered under Medicaid reimbursement.

A History of Disappointment and Mistrust

Parents told amNewYork that they question the school system’s ability to provide adequate services for their children who have IEPs. Paulette Ha-Healy, a special education advocate and mother of two kids who have received special education services since they were in preschool, said that the public school consistently failed to provide the services legally mandated to her children per their IEPs.

Ha-Healy’s oldest child recently graduated, but her youngest is a high school senior. She said that of the four years her child has been in high school, they hadn’t received a single speech therapy session, despite a speech therapist being specifically mandated through IEP.

“ They [DOE] have tried to get me to remove it [from the IEP] due to the fact that they can't provide one, and I said absolutely not,” Ha-Healy said. “My child has a specific speech disability and they fail to provide her with a speech therapist every year.”

It's one reason Ha-Healy is always hesitant to sign the consent form to release her children’s health information so the school can seek Medicaid reimbursement. To her, it doesn’t make sense to agree for the school to seek Medicaid reimbursement for services her children never actually received.

“ I don't sign it until I know for a fact they're getting services, and even then I wait until like mid-year to finally sign it,” Ha-Healy said. “So I can verify that they are receiving services and they're getting it consistently.”

She told amNewYork that the entire system has left a bad taste in many parents’ mouths.

“ Parents are very mistrustful of what the schools are doing because of past experiences and histories and, and just fundamental behavior,” Ha-Healy said.

Kpana Kpoto, the senior manager for direct assistance with INCLUDEnyc, a local nonprofit aimed at improving the lives of children with disabilities, said she worried about mixing Medicaid and education, because she wasn't sure if it would impact her benefits at all, and she wasn't sure that she liked the idea of her child's health and insurance information would be safe on third party software applications.

“ I can imagine that in this current climate, parents don't really want entities going into their child's records unless it's absolutely necessary,” Kpoto said.

Her uncertainty, she said, came from a fundamental lack of communication from the school system. Kpoto said that public schools needed to do a better job of educating parents about why giving consent to release their child's health data is important for supporting special education services.

“ No one has really explained to me or a lot of the parents that I know what is the benefit of consenting for Medicaid dollars to be used,” Kpoto said.

Advocates said that failing to secure the Medicaid funds deprived the school system of extra money, and by proxy, better services.

“The DOE’s failure to seek Medicaid reimbursement for the services they provide, comes at the expense of the countless students whom DOE entirely deprives of critical, legally-mandated services,” said Ruth Lowenkron, Esq., Director of the Disability Justice Program at New York Lawyers for the Public Interest. “This unconscionable practice must immediately be reversed.”

Ha-Healy said that if the money NYCDOE spent on services was freed up to fund things like additional special education teachers, paraprofessionals and therapists, the school system might be able to begin to fill in the gaps in services and restore trust within the growing disability community.

"The need is growing, yet we can't fill the vacancies fast enough," she said. "And there's a number of different challenges that contribute to that. But if we were to be able to recoup that funding, it could go towards stronger recruitment efforts."

But after more than a decade of seeing the same problems with special education pop up over and over, with minimal gains made toward solutions, Ha-Healy said that children with disabilities will continue to age out of the fundamentally flawed system without getting the services they need to prepare them for life. She said it can leave students "playing catch up for life."

“The one resource our children don't have is more time,” Ha-Healy said.

amNewYork

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