New York, Meanwhile, May Have to Repay Medicaid Money

By Michelle R. Davis

Washington

Financially strapped school districts in New York state now have another major worry on the horizon: They may be forced to repay millions of dollars in Medicaid money to the federal government.

But confusion reigns over the Medicaid program that reimburses schools for certain special education services. And in New York no one seems to have a clear view of what may have gone wrong.

Sen. Charles E. Schumer, D-N.Y., announced last month that federal officials believe some districts overestimated what they should be repaid for providing special-needs students such services as speech and physical therapy. He said the probe could force districts in his state to pay back some of the $2.2 billion they had received in federal Medicaid reimbursements, and...