KU’s bad billing cost the university more than $7.1 million

Because of questionable billing practices by the University of Kansas on a training program run by the School of Social Welfare, the university is repaying the state more than $7.1 million.

The Kansas Department for Aging and Disability Services, which was paying for the training program under a less than $2 million a year contract, says KU may actually owe the state more than what’s already been repaid.

The School of Social Welfare was providing training to community mental health centers under the Kansas Medicaid program.

In January the university, with a loan from the KU Endowment Association, reimbursed the state more than $7.1 million, representing revenue the program received that was not appropriately accounted for from 2010 to 2015.

University officials said returning the money may affect the university’s ability to hire staff in key areas, maintain aging equipment and buildings and retain faculty who receive competitive offers from other institutions.

The billing concerns were confirmed a year ago after an audit commissioned by KU discovered that the social welfare school had overbilled Kansas Medicaid.

The state department “became increasingly uneasy about the way the billing was going” long before the university called for an audit, said Angela de Rocha, spokeswoman for the state Department for Aging and Disability Services.

“It appeared the university was billing the state for work that had nothing to do with the training contract,” de Rocha said.

Given the state department’s suspicions, when the training contract came up for renewal in 2016 the state proposed changes in the way the university reported hourly work on the contract.

De Rocha said the state wanted the university to detail not only how many hours were worked by also what work was being done.

In the end KU’s Center for Mental Health Research and Innovation, which was administering the training program, and the state department could not agree on the contract and it was not renewed. The center, part of KU’s School of Social Welfare, eventually closed.

Rick Goscha, who had been director of the university’s Center for Mental Health Research and Innovation, is now director for the California Institute for Behavioral Health Solutions, a similar program in Sacramento.

On Monday Chancellor Douglas Girod formally notified state officials of the reimbursement in a letter that the university released to The Star.

“... Faculty and staff time and effort devoted to certain Medicaid contracts awarded to KU’s School of Social Welfare (”The School”) were inaccurate and resulted in overpayment to the School,” Girod said in the letter.

DeRocha said that “once the university discovered the wonky billing, the university acted in good faith. They had some bad actors.”

Girod said in his letter that “many school faculty and staff did not have an accurate understanding of what was required in order to charge time and effort to the Medicaid contracts,” and that resulted in the overpayment.

According to the letter, personnel actions were initiated, but university officials decline to say who was disciplined.

“KU has taken disciplinary action at varying levels of severity for those involved,” the letter said. It added that subsequently Michelle Mohr Carney joined KU in July as the new Dean of the School of Social Welfare.

“We cannot discuss individual personnel matters,” KU spokesman Joseph Monaco said in an email to The Star. He said that “the university took aggressive action in response to this situation,” including counseling some of the workers to ensure they understand processes and procedures.

Because the money originally came from the federal government and was funneled through the state department to the university school, the repayment will go back into federal coffers.

DeRocha said the state department has reported details of the situation to the federal government, which may decide to review the matter further.

“It could turn out to be even more money,” DeRocha said.

This story was originally published February 16, 2018 at 2:28 PM with the headline "KU’s bad billing cost the university more than $7.1 million."