N.Y. State Settles Suit Over School Medicaid Claims

School districts in New York state must temporarily stop submitting reimbursement claims to Medicaid in the wake of a record-setting settlement between the state and the U.S. Department of Justice, which claimed over a billion dollars in claims were false.

Districts nationwide are allowed to request reimbursement from Medicaid, the main federal health-insurance program for the poor, for certain therapies provided to students. The Justice Department claimed that New York billed the federal government for services that are not covered by Medicaid or that were not properly documented.

As part of the July 20 settlement, the state and New York City will repay some $540 million to the federal government, partly in cash and partly by releasing claims to reimbursements...