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Pennsylvania Medicaid School Based Claiming SBAP Annual Cost Report Training March 2014 www.publicconsultinggroup.com.

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Presentation on theme: "Pennsylvania Medicaid School Based Claiming SBAP Annual Cost Report Training March 2014 www.publicconsultinggroup.com."— Presentation transcript:

1 Pennsylvania Medicaid School Based Claiming SBAP Annual Cost Report Training March 2014

2 Agenda 2 Goals Programmatic Changes to the School Based Access Program (SBAP) Roles and Responsibilities Annual Medicaid Cost Reporting Requirements Direct Service Cost Reporting Requirements Cost Settlement Calculation Desk Review Overview Timeline of Events Contacts Questions

3 Goals 3 The purpose of this training is to help LEAs: Understand the cost reporting process; Learn program requirements and responsibilities; Understand the implications of reporting or failure to accurately report; and Understand the Medicaid cost settlement calculation and how the various contributing factors impact the calculation.

4 Programmatic Changes to the School Based Access Program (SBAP) 4

5 Programmatic Changes to SBAP Effective July 1, 2013 the Centers for Medicare and Medicaid Services (CMS) approved the Pennsylvania Medicaid State Plan Amendment to implement an annual Medicaid cost reimbursement and cost settlement process for the School Based ACCESS Program (SBAP). CMS made a national push to implement a standardized reimbursement process to ensure proper reimbursement to LEAs for direct medical school based services: cost based reimbursement. What is cost based reimbursement? A cost based reimbursement methodology determines the actual cost of delivering direct medical services to special education students. Cost based reimbursement ensures that LEAs are reimbursed their costs for the delivery of Medicaid allowable direct medical services. 5

6 Programmatic Changes to SBAP How will cost based reimbursement impact LEAs? In order to identify the costs of delivering Medicaid school-based services, LEAs will participate in an annual cost settlement process. The cost settlement process will include the submission of an annual Medicaid cost report. LEAs will complete an annual Medicaid cost report online at https://costreporting.pcgus.com/pa. https://costreporting.pcgus.com/pa The Medicaid cost report calculates the actual costs of providing Medicaid covered health related services and will be compared to Medicaid reimbursement received through SBAP interim payments for the fiscal year. Interim payments are those payments received by the LEA through the fee-for-service billing activities throughout the fiscal year. These payments DO NOT include payments received for the quarterly MAC claims. 6

7 Programmatic Changes to SBAP Historical Approach to School Based Medicaid Programs “Compartmentalized” programs with minimal integration Unbalanced LEA participation in both programs  Some LEAs participated in MAC and FFS or just MAC or FFS Various compliance issues in both programs  One reason the Federal government proposed to eliminate MAC 7 Fee for Service (FFS) LEA $ Medicaid Administrative Claiming (MAC)

8 Programmatic Changes to SBAP Current Approach to School Based Medicaid Programs Programs now work together Integrated single time study for Medicaid Administrative Claiming (MAC) and FFS reimbursement Focus on overall reimbursement and reimbursement of actual costs Balanced participation in ALL areas by LEAs Combined statewide and LEA operational model Improved CMS clarity/compliance Reimbursement that reflects LEA’s cost in treating Medicaid eligible students Submission of annual Medicaid cost reports required 8

9 Roles and Responsibilities 9

10 Role of the LEA Participate in the Random Moment Time Study (RMTS) Submit a participant list for inclusion in the quarterly RMTS Ensure all Medicaid eligible providers are included in the cost report The list of Medicaid eligible providers on the cost report must be the same as the participant list submitted for the RMTS Prepare and submit completed annual cost report Role of PCG and the PA Department of Public Welfare Desk reviews of the submitted cost reports Complete Medicaid cost report audits Process Medicaid cost settlements 10

11 Roles and Responsibilities SBAP allows districts to receive reimbursement for the cost of providing PA Medicaid covered services to Medicaid eligible, special education students. Revenue available only when Federal and State Medicaid requirements are met. 11

12 SBAP Annual Medicaid Cost Reporting Requirements 12

13 SBAP Annual Medicaid Cost Reporting Requirements LEA requirements for participation in SBAP: 1.Continue submitting direct service claims; 2.Include direct service staff in the Random Moment Time Study (RMTS); 3.Report costs for direct service staff on a quarterly and annual basis; 4.Report costs annually on an accrual basis; and 5.Include only allowable costs on the cost report. 13

14 SBAP Annual Medicaid Cost Reporting Requirements 1.LEAs are required to continue with direct service documentation and claiming processes throughout the year. LEAs will continue to receive interim payments on approved claims. Interim claiming will remain a critical component in the direct service reimbursement process. LEAs should submit direct service claims for staff participants included in the quarterly time study. In order to receive Medicaid reimbursement, LEAs must continue to adhere to the participation agreement and program requirements. 14

15 SBAP Annual Medicaid Cost Reporting Requirements 2.LEAs must include direct service staff providing health related services to special education students on the random moment time study (RMTS) staff pool list. Each LEA must determine the appropriate staff to include in the time study on a quarterly basis. If participants are inadvertently omitted from the time study, costs incurred for these participants will not be recognized in the cost settlement process. It is essential for LEAs to carefully identify and include direct service providers on a roster to participate in the quarterly time study. 15

16 SBAP Annual Medicaid Cost Reporting Requirements 3.LEAs are required to report costs for direct service staff on a quarterly and annual basis. The cost settlement process directly links to both the quarterly financial submissions and the RMTS. Each LEA will report the quarterly and annual costs for their staff included in the time study staff pool. 16

17 SBAP Annual Medicaid Cost Reporting Requirements 4.All costs captured on the SBAP Annual Medicaid Cost Report must be reported on an accrual basis. This is a requirement within the Medicaid State Plan and Cost Reporting Guide approved by the Centers for Medicare and Medicaid Services (CMS). Under an accrual based accounting methodology, expenses are recorded at the time in which the transaction occurs, rather than when the payment is made. Expenses are counted when the LEA receives the goods or services. The LEA does not have to wait until the expense is actually paid to record a transaction. 17

18 SBAP Annual Medicaid Cost Reporting Requirements 4.All costs captured on the SBAP Annual Medicaid Cost Report must be reported on an accrual basis. Example of Accrual Based Reporting: In July 2012, the LEA pays salaries and benefits for the last two weeks of June This expense occurred in July 2012, but pertained to services provided in June This expense should be recorded on the July-June 2012 annual cost report when the transaction occurred, not when it was paid. 18

19 SBAP Annual Medicaid Cost Reporting Requirements 5. Only allowable costs approved by CMS can be reported on the cost report. CMS approved a cost reimbursement methodology that includes a number of data elements (listed on the following slides). The CMS-approved cost and data elements related to direct medical services include: Salary costs for eligible direct service providers; Benefit costs for eligible direct service providers; Purchased Professional Services (PPS) costs for eligible direct service providers; Approved Direct Medical Service Materials and Supplies costs; Depreciation costs for Approved Direct Medical Service Equipment; Annual Tuition Costs; Pennsylvania Department of Education Unrestricted Indirect Cost Rate (UICR) (pre-populated by PCG); Random Moment Time Study (RMTS) Direct Medical Service Percentage Results (pre-populated by PCG); and Individualized Education Program (IEP) Ratio. Please ensure your LEA maintains all documentation to support allowable costs reported. 19

20 SBAP Annual Medicaid Cost Reporting Requirements 5.Only allowable costs defined by CMS can be reported on the cost report. The CMS-approved cost elements related to transportation include: Salary costs for eligible transportation staff; Benefit costs for eligible transportation staff; PPS costs for eligible transportation staff; Other allowable transportation costs (such as fuel, insurance, etc.); and Depreciation costs for approved transportation service equipment. Please ensure your LEA maintains all documentation to support allowable costs reported. 20

21 SBAP Annual Medicaid Cost Reporting Requirements In summary, 1.Continue submitting direct service claims; 2.Include direct service staff in the random moment time study (RMTS); 3.Report costs for direct service staff on a quarterly and annual basis; 4.Report costs annually on an accrual basis; and 5.Include only allowable costs on the cost report. 21

22 Direct Service Cost Reporting Process and Requirements 22

23 Reporting Allowable Direct Service Costs 23 Direct Service Payroll Information

24 Reporting Allowable Direct Service Costs 24 Medicaid allowable costs in the SBAP annual cost report must relate to one of the direct services listed below, which are clearly outlined in the Pennsylvania Cost Reporting Manual. Reimbursable services under the Direct Service program include: Nursing Services; Nurse Practitioner Services; Occupational Therapy Services; Orientation, Mobility and Vision Services; Personal Care Services; Physical Therapy Services; Physician Services; Psychological (including psychiatric), Counseling and Social Work Services; Speech, Language and Hearing Services (including audiology and teachers for the hearing impaired); and Assistive Technology Devices Direct Service Payroll Information

25 25 Only the eligible Annual Payroll Information for the SBAP service providers who are included in the RMTS qualify for SBAP cost reimbursement. Columns on the Annual Payroll page indicate whether or not the individual was listed on the SPL for the particular quarterly period If the column is marked with a 1, the individual was included on the SPL for the quarter and cost will be included in the SBAP cost report. If the column is marked with a 0, the individual was not included on the SPL for the. Annual Payroll Information: Salaries, Fringe Benefits, and Contracted Staff Costs Reporting Allowable Direct Service Costs

26 26 Regular wages Paid time off (e.g., sick or annual leave) Overtime Bonuses or longevity Stipends Cash bonuses and/or cash incentives Note: Salaries are those payments from which payroll taxes are deducted. The reported salaries should be the total gross earnings for the individual as paid by the LEA for the reporting period. Direct Service Payroll Information: Salaries

27 Reporting Allowable Direct Service Costs 27 Employer-paid health/medical, life, disability, vision benefits, or dental insurance premiums Employer-paid child day care for children of employees Retirement contributions Worker’s compensation costs Other employer paid benefits including unemployment and FICA Direct Service Payroll Information: Benefits

28 Reporting Allowable Direct Service Costs 28 Only those salary and benefit staff costs for direct service providers included on the RMTS staff pool list are eligible for direct service cost reimbursement. Only salaries and benefits for those service categories which the LEA billed and received interim payments will be included in the Medicaid cost settlement calculation. LEAs are required to report gross expenditures as well as identifying expenditures paid from federal funding sources. Direct Service Payroll Information: Salaries and Benefits

29 Reporting Allowable Direct Service Costs 29 Total costs of PPS for applicable contracted staff. Note: The reported costs should be the total costs for the individual as paid by the LEA for the reporting period. PPS costs include compensation paid for all services contracted by the LEA for an individual who delivered any direct services to Medicaid and/or non- Medicaid students. Only those PPS costs for certain direct service providers that were included on the RMTS staff pool list are eligible for direct cost reimbursement. Only contracted service costs for those service categories which the LEA billed and received interim payments for will be included in the Medicaid cost settlement calculation. Direct Service Payroll Information: Purchased Professional Services (PPS) Costs

30 Reporting Allowable Direct Service Costs 30 What types of Material and Supply costs will be included in the cost settlement process? CMS has approved a very limited list of direct medical service material, supply, and equipment costs (Available on the MCRCS Dashboard). Only those items included within the approved list can be reported on the Medicaid cost report Examples include: hearing aids, stethoscopes, wheelchairs, etc. Direct Medical Service Material, Supply, and Equipment Costs applicable only to General Education students should not be reported on the cost report Only material and supply costs for service types – with the exception of Assistive Technology Devices – which the LEA reports payroll or contract costs for will be included in the Medicaid cost settlement calculation. Direct Medical Services Materials and Supplies

31 Reporting Allowable Direct Service Costs 31 What is Depreciation? “Depreciation” is the systematic and rational allocation of the acquisition cost of an asset over its estimated useful life What type of depreciation needs to be used in order to report costs on the Medicaid Cost Report? Allowable depreciation expenses for direct medical services include OMB-A-87 allowable methodologies, including pure straight-line depreciation Straight-line depreciation method is a method of calculating the depreciation of an asset which assumes the asset will lose an equal amount of value each year The annual depreciation is calculated by dividing the purchase price by the estimated useful life of the asset Direct Medical Services Equipment Depreciation

32 Reporting Allowable Direct Service Costs 32 When is it required to report direct medical service materials and supplies as depreciated cost? If a single direct medical service material and supply cost exceeds $5,000, then the item should be depreciated Only those items included within the approved list can be reported on the Medicaid cost report Only material and supply costs for service types – with the exception of Assistive Technology Devices – which the LEA reports payroll or contract costs for will be included in the Medicaid cost settlement calculation. Direct Medical Services Equipment Depreciation

33 Reporting Allowable Direct Service Costs 33 Example 1: A wheelchair is purchased by an LEA for $6,000 on July 1, 2012 and has a useful life of 5 years. How does the LEA identify what is the useful life of a wheelchair? The useful life of a wheelchair is estimated by the LEA The LEA may use industry standards in order to report the useful life of a wheelchair If the LEA does not have a fixed asset ledger that reports the useful life of an asset, an LEA may consult the "Estimated Useful Lives of Depreciable Hospital Assets", published by the American Hospital Association (AHA) How does the LEA calculate the depreciation cost of the wheelchair? Depreciation cost is calculated by dividing the acquisition cost of $6,000 by the estimated useful life of 5 years This results in a calculated depreciation cost of $1,200 for school fiscal year 2013 (July 1, 2012 to June 30, 2013) Direct Medical Services Equipment Depreciation

34 Reporting Allowable Direct Service Costs 34 Example 2: A wheelchair is purchased by an LEA for $6,000 on October 1, 2012 and has a useful life of 5 years The Medicaid cost reimbursement and settlement process was effective July 1, 2012, so this requires the LEA to prorate the expense This is accomplished by dividing the annual allowable expense of $1,200 by the number of months in the fiscal year or 12 in this case. $1,200/12 = $100 per month The $100 per month cost is then multiplied by 9, which is the number of months the wheelchair was in use for the reporting period (July 1, 2012 to June 30, 2013) Therefore, the final allowable depreciation cost would be $900 in this example ($100 of depreciation cost per month * 9 months = $900) For the remaining 4 years of the useful of the wheelchair, the allowable depreciation cost would be $1,200 per year Direct Medical Services Equipment Depreciation

35 Reporting Allowable Direct Service Costs 35 This section identifies the reimbursable portion of tuition expenditures for approved private schools and other school based out-of-district providers. The cost report must include the following: The specific school/agency to which tuition was paid The total annual tuition paid to the specific school/program The portion of tuition payments made using federal funds Annual Tuition Costs

36 Reporting Allowable Direct Service Costs 36 The data entered will be used to calculate the Tuition Payments Net Federal Funds (Tuition Payments) – (Federal Funds) = Tuition Payments Net Federal Funds This value will then be multiplied by the Health Related Percentage which is distinct for each school/agency and will be calculated by PCG based on data from the agency or school’s Annual Financial Report to PDE. (Tuition Payments Net Federal Funds) x (Health Related Percentage) = Health Related Expense The Health Related Expense will then be used to determine the Medicaid allowable costs for cost settlement Annual Tuition Costs

37 Reporting Allowable Direct Service Costs 37 Compensation Federal Revenues

38 Reporting Allowable Direct Service Costs 38 As LEAs are required to report gross expenditures, expenditures for funds paid from federal funding sources should be appropriately identified. The cost reporting system will automatically calculate the net expenditures based on costs reported. Funds received from Medicaid (interim billing, administrative etc) are not considered Federal Funds, and should not be reported as such. Compensation Federal Revenues

39 Reporting Allowable Direct Service Costs 39 Unrestricted Indirect Costs

40 Reporting Allowable Direct Service Costs 40 CMS recognizes that LEAs incur indirect costs for direct service program administration. Unrestricted indirect costs represent the expenses of doing business that are not readily identified within a particular grant, contract, program, but are necessary for the general operation of the organization to conduct the activities it performs. The Pennsylvania Department of Education (PDE) is the cognizant agency responsible for calculating and approving LEA indirect cost rates on behalf of the United States Department of Education (US DOE). Unrestricted Indirect Costs

41 Reporting Allowable Direct Service Costs 41 PCG will pre-populate the LEA’s unrestricted indirect cost rate (UICR) into the Medicaid cost report form. The UICR is applied to net direct costs (total costs less amount paid with federal funds) in order to allow for the proper identification of indirect costs. Unrestricted Indirect Costs

42 Direct Medical Services Time Study Percentages 42 Direct Medical Services Time Study Percentages

43 43 Direct medical service staff have other LEA specific responsibilities other than delivering direct medical services and CMS requires a mechanism (RMTS) to apportion these costs. The RMTS direct medical service percentage is applied to allowable costs to determine what portion of these costs pertain to the provision of direct medical services. Direct Medical Services Time Study Percentages

44 44 The direct medical service percentage is calculated by PCG from the results of the quarterly Random Moment Time Study (RMTS). The percentage will determine how much time direct service and personal care providers spend performing allowable direct medical services. There is one, statewide direct medical service percentage used for the purpose of cost reporting. The direct medical service percentage is a statewide percentage and is not LEA specific. The direct medical service percentage used within the Medicaid cost report is the combination of the three quarterly time study periods (Oct – Dec, Jan – Mar, and Apr – Jun) that occurred during the state fiscal year. Direct Medical Services Time Study Percentages

45 45 Example: If the direct medical services percentage was 41.96% and a LEA paid a Physical Therapist $60,000 per year, the direct medical service costs would be $25,176. $60,000 x.4196 = $25,176 Direct Medical Services Time Study Percentages

46 Individualized Education Program Ratio 46 Individualized Education Program (IEP) Ratio

47 Individualized Education Program Ratio 47 The purpose of the IEP ratio is to allocate direct medical service costs to the Medicaid program. It is used to determine Medicaid’s portion of direct medical service costs incurred by LEAs. The IEP ratio will be calculated on an annual basis for use the annual cost report. This ratio will differ from the Medicaid Eligibility Ratio (MER) used for the quarterly MAC claims. Individualized Education Program (IEP) Ratio IEP Ratio = Total Number of Medicaid Eligible Special Education Students with a Prescribed Direct Medical Service in their IEP Total Number of ALL Special Education Students with a Prescribed Direct Medical Service in their IEP

48 Individualized Education Program Ratio 48 The IEP ratio will be LEA specific and based on student count data. To establish the IEP ratio, LEAs need to submit a count of each student with at least one direct medical service in their IEP (denominator), based on student enrollment as of the first Monday of October during each July – June school year, to PCG. PCG will then determine the total number of Medicaid Eligible students with at least one direct medical service in their IEP (numerator) based on paid claims data from EasyTrac. Individualized Education Program (IEP) Ratio

49 Calculating Direct Service Medicaid Allowable Costs 49 Direct Service Medicaid Allowable Costs

50 Calculating Direct Service Medicaid Allowable Costs 50 Direct service costs entered in the Cost Reporting System by the LEA and unrestricted indirect costs will be apportioned by the Direct Medical Service Percentage and the IEP Ratio to calculate the Medicaid allowable costs. The identified Medicaid allowable costs on the cost report will be used to determine the cost settlement, in addition to any reported transportation costs. Direct Service Medicaid Allowable Costs

51 Calculating Direct Service Medicaid Allowable Costs 51 Now that we know about the SBAP Medicaid Cost Report process, how do the pieces fit together? Calculation StepCost Report Element DescriptionValue Cost Report Element # ASalary Costs of SBAP Direct Service Providers including Contract Costs (net of federal funds) $950,0001 BBenefit Costs of SBAP Direct Service Providers (net of federal funds) $200,0002 CDirect Service Non Personnel Cost (net of federal funds) $65,0003 DDirect Service Non Personnel Depreciation Cost (net of federal funds) $24,5304 ETotal Direct Service Costs (net of federal funds) (Sum of Steps A through D) $1,239,530

52 52 Calculation StepCost Report Element DescriptionValue Cost Report Element # ETotal Direct Medical Service Costs (net of federal funds) (Sum of Steps A through D) $1,239,530See Prior Slide FDirect Medical Service % (from RMTS)55.00%5 G(Step E x Step F)$681,742 HOut of District Tuition Costs$75,0006 I(Step G + Step H)$756,742 JIndirect Cost Rate1.157 K(Step I x Step J)$870,253 LIndividualized Education Program Ratio50.00%8 MSBAP Medicaid Eligible Direct Service Cost (Step L × Step M) (Calculated Cost Reimbursement) $435,127

53 53 Medicaid Allowable Costs and Cost Report Data Elements for Specialized Transportation Services The 7 CMS-approved cost and data elements used to determine Medicaid costs for Specialized Transportation Services include: 1.Salary costs for eligible specialized transportation service providers 2.Benefit costs for eligible specialized transportation service providers 3.Approved Specialized Transportation Non Personnel costs 4.Depreciation costs for Approved Specialized Transportation Non Personnel costs 5.LEA Indirect Cost Rates (ICR) (pre-populated by PCG) 6.Specialized Transportation Ratio (if needed) 7.One Way Trip Ratio Reporting Allowable Transportation Service Costs

54 54 Salary costs for eligible specialized transportation service providers include: Regular wages or extra pay Paid time off (e.g., sick or annual leave) Overtime Bonuses or longevity Stipends Cash Bonuses and/or cash incentives Note: Salaries are those payments from which payroll taxes are deducted. The reported salaries should be the total gross earnings for the individual as paid by the LEA for the reporting period 1. Transportation Salary costs Reporting Allowable Transportation Service Costs

55 55 Benefit costs for eligible specialized transportation service providers include: Employer-paid health/medical, life, disability, or dental insurance premiums Employer-paid child day care for children of employees Retirement contributions Worker’s compensation costs Note: Report the expended amounts paid by the LEA which are directly associated with each staff member by type of employee benefit Reporting Allowable Transportation Service Costs 2. Transportation Benefits Costs

56 56 Salary and Benefit costs for eligible specialized transportation service providers Only those salary and benefit costs for eligible specialized transportation service providers are eligible for SBAP cost reimbursement Eligible specialized transportation service providers include Bus Drivers, Mechanics, Substitute Drivers LEAs are required to report gross expenditures and then properly reduce expenditures for funds paid from federal funding sources Costs can be reported as only specialized transportation or not only specialized transportation (details on later slide) Reporting Allowable Transportation Service Costs 1 & 2. Transportation Payroll Costs

57 57 CMS has approved a list of specialized transportation non personnel costs, including: Lease or Rental Costs Insurance Costs Maintenance and Repair Costs Fuel and Oil Costs Purchases under $5,000 Contract Costs – for transportation services and transportation equipment Only those items included within the above categories can be reported on the Medicaid cost report Costs can be reported as either only specialized transportation or not only specialized transportation (details on later slide) 3. Approved Specialized Transportation Non Personnel costs Reporting Allowable Transportation Service Costs

58 58 Depreciation for specialized transportation assets follows a similar process as that for the depreciation of direct medical service materials and supplies If a single specialized transportation non personnel item cost exceeds $5,000, then the item should be depreciated Costs can be reported as only specialized transportation or not only specialized transportation (details on later slide) 4. Transportation Equipment Depreciation Costs Reporting Allowable Transportation Service Costs

59 59 CMS recognizes that LEAs incur indirect costs for direct service program administration. Unrestricted indirect costs represent the expenses of doing business that are not readily identified within a particular grant, contract, program, but are necessary for the general operation of the organization to conduct the activities it performs. The Pennsylvania Department of Education (PDE) is the cognizant agency responsible for calculating and approving LEA indirect cost rates on behalf of the United States Department of Education (US DOE). 5. Unrestricted Indirect Costs Reporting Allowable Transportation Service Costs

60 60 Reporting Allowable Transportation Service Costs 6. Specialized Transportation Ratio What is the Specialized Transportation Ratio? The Specialized Transportation Ratio is used when an LEA can not discretely break out its specialized transportation costs from its general transportation costs For consistency, the student counts for this ratio should based on the date used for the IEP ratio student count. The ratio is applied to those costs identified as “not specialized transportation only” Specialized Transportation Ratio = Total Number of IEP Students Receiving Specialized Transportation Services Total Number of ALL Students Receiving Transportation Services (Specialized or Non Specialized)

61 61 Reporting Allowable Transportation Service Costs 7. One Way Trip Ratio What is the One Way Trip (OWT) Ratio? The ratio is calculated and reported annually on the Medicaid SBAP Cost Report A Medicaid one-way trip is a trip in which a Medicaid enrolled student who has specialized transportation services in their IEP and received another SBAP service provided by the LEA on the day of the trip. The numerator will be completed by PCG based on paid claims data The purpose of the One Way Trip ratio is to allocate specialized transportation costs to the Medicaid Program In other words, it is used to determine Medicaid’s portion of specialized transportation costs incurred by LEAs for the provision of SBAP specialized transportation services OWT Ratio = Total Number of Medicaid One Way Trips Total Number of ALL One Way Trips

62 62 Now that we know about the SBAP Medicaid Cost Report process for Specialized Transportation, how do the pieces fit together? Calculation StepCost Report Element DescriptionValue Cost Report Element # ASalary Costs of SBAP Specialized Transportation Service Providers (net of federal funds) $225,0001 BBenefit Costs of SBAP Direct Specialized Transportation Providers (net of federal funds) $65,0002 CSpecialized Transportation Non Personnel Cost (net of federal funds) $45,0003 DSpecial Transportation Non Personnel Depreciation Cost (net of federal funds) $14,0004 ETotal Specialized Transportation Service Costs (net of federal funds) (Sum of Steps A through D) $349,000

63 63 Calculation StepCost Report Element DescriptionValue Cost Report Element # ETotal Specialized Transportation Service Costs (net of federal funds) (Sum of Steps A through D) $349,000See Previous Slide FIndirect Cost Rate1.155 GStep E times Step F$401,350 HSpecialized Transportation Ratio32.00%6 IStep G times Step H$128,432 JOne Way Trip Ratio48.00%7 KSBAP Medicaid Eligible Specialized Transportation Cost (Step I times Step J) $61,647

64 64 Now that we know how the SBAP Medicaid Direct Medical Service and Specialized Transportation Costs are calculated, how is the settlement determined? Calculation StepCost Report Element DescriptionValue Cost Report Element # ASBAP Medicaid Eligible Direct Service and Specialized Transportation Cost $496,774 See Step N for Direct Service and Step K for Specialized Transportation BSBAP Medicaid Interim Payments Received (Received through traditional billing process) $395,745 CMedicaid Cost Settlement Gross Amount$101,029

65 65 Now that we know how the SBAP Medicaid Direct Medical Service and Specialized Transportation Costs are calculated, how is the settlement determined? Calculation StepCost Report Element DescriptionValue FMAP Rate(%) CMedicaid Cost Settlement Gross Amount$101,029 DJuly – September (x 0.25)$25, % July – September Federal Share$13,909 EOctober – June (x 0.75)$75, % October – June Federal Share$41,129 F Federal Share at FY 2013 (Federal Share based on FFP Rates published by the US Department of Health and Human Services) $55,038

66 Cost Settlement Calculation 66

67 Cost Settlement Calculation 67 In order to optimize reimbursement during cost settlement, it is important for LEAs to carefully examine all direct medical services and transportation costs reported so that all allowable costs are included in the SBAP Annual Medicaid Cost Report. Most common unreported costs include: Direct medical service provider salaries (due to appropriate staff not being included in the quarterly RMTS staff pool list). Transportation: payroll, purchased professional services, other costs, and depreciation. Cost Settlement Summary

68 Cost Settlement Calculation 68 Cost Settlement Summary LEAs must continue to bill for direct services throughout the year and are required to do the following to meet program compliance requirements: Qualified providers must deliver services to students LEAs must maintain all required documentation LEAs will receive interim payments on approved claims. Claiming will remain a critical component in the direct service reimbursement process. LEAs should submit direct service claims for staff participants included in the quarterly time study. Any staff who are 100% federally funded should not be included in the time study and should not bill for services.

69 Cost Settlement Calculation 69 Cost Settlement Summary DPW will restrict the cost settlement process to settle only direct service categories where LEAs billed and received payment. For example: Physical Therapists are included on the staff roster, but the LEA did not submit any Physical Therapy claims. Therefore, Physical Therapy costs will not be included on the annual cost report. Claiming activity will be monitored throughout the year and compared to thresholds established based on prior year’s activity.

70 Cost Settlement Calculation 70 LEA specific cost settlement will take the LEA’s Medicaid Allowable Costs, as calculated by the SBAP Annual Medicaid Cost Report and compare them to Medicaid reimbursement (interim payments) received. If the LEA’s costs exceed reimbursement received, the LEA will receive a settlement. If payment is due to the LEA, the LEA will receive a payment for the amount due. If the LEA’s costs are less than reimbursement received, the LEA will pay back the difference. If payment is owed to DPW, the LEA will be required to refund the amount due. Cost Settlement Summary

71 Cost Settlement Example 71 1.If the LEA’s Medicaid costs exceed reimbursement received, the LEA will receive a settlement. Cost SettlementTest LEA1 Medicaid Cost for Direct Medical Services and Transportation$510,000 Federal Share (see slide 64 for details) (Federal Share based on blended FMAP Rates published by the US Department of Health and Human Services) 55.07% & 54.28% Federal Share Amount$277,835 Medicaid Interim Payments Received for Direct Medical and Transportation Services $255,000 Payment Due to LEA (Federal Share Only)$22,835

72 Cost Settlement Example 72 2.If the LEA’s Medicaid costs are less than reimbursement received, the LEA will pay back the difference to CMS. Cost SettlementTest LEA2 Medicaid Cost for Direct Medical Services and Transportation$450,000 Federal Share (see slide 64 for details) (Federal Share based on blended FMAP Rates published by the US Department of Health and Human Services) 55.07% & 54.28% Federal Share Amount$245,149 Medicaid Interim Payments Received for Direct Medical and Transportation Services $255,000 Payment Due from LEA (Federal Share Only)($9,851)

73 Desk Review Overview 73

74 Desk Review Overview 74 Desk Review Purpose Upon LEA certification of the SBAP Medicaid Cost Report PCG begins the Desk Review process. The Desk Review closely examines each LEA’s reporting information, including the: Annual Payroll Information; Direct Medical Materials and Supplies; Direct Medical Equipment Depreciation; and, Individualized Education Program (IEP) Ratio.

75 Desk Review Overview 75 Desk Review Purpose (Continued) LEAs reported costs and ratios are compared against state-wide thresholds. Outlier costs are identified and reviewed to ensure compliance. LEAs are responsible for reviewing the identified information and either: Confirm the reported information is accurate; or, Make any necessary adjustments. In some cases, a further follow up explanation could be requested if the LEA made any additional adjustments in response to the desk review process

76 76 PCG will send each LEA a Desk Review via Then, LEAs will need to respond and either confirm the information is accurate or request to make an adjustment to allow for corrections. Once the LEA’s Desk Review response is received via , PCG will respond and either: Request further explanation if there are still outstanding questions; Open the applicable report(s) if an adjustment has been requested; or, Close out the desk review if all items are resolved. Desk Review Overview Desk Review Process

77 77 If an LEA determines that an error was made and an adjustment is requested: PCG will notify the LEA that the report has been reopened for adjustments If an adjustment is made to a report please ensure the report is re- certified. Notify PCG once this is complete at to expedite the PCG will then conduct a secondary review of the revised information. Desk Review Overview Desk Review Process

78 78 Desk Review Overview Types of Desk Review Edits Annual Edit Explanations: Reviewing the LEA’s explanations for each Annual Edit provided in the MCRCS to ensure reasonability. Annual Payroll: Ensuring costs were reported according to an accrual accounting method for the quarters in which the individuals were active on the staff pool list. Other Costs: Comparing, by service type, the total amount of Other Costs report (Materials, Supplies and Equipment Depreciation) against the total amount in Annual Payroll for that service type. Equipment Depreciation: Ensuring the reasonability of the reported Direct Medical Equipment Depreciation, including, the Purchase Price and Years of Useful Life.

79 79 Desk Review Overview Desk Review Reminders An LEA’s Desk Review must be completed in order for the fiscal year cost settlement result to be calculated. Respond by the due date stated in the . All follow up correspondence must be responded to in a timely fashion. PCG Help Desk is available via phone and for any questions or needed help regarding the desk review process.

80 Timeline of Events 80

81 Timeline of Events The timeline outlined for FY13 cost settlement is a unique timeline given the ongoing implementation of the CPE reimbursement methodology. The Medicaid cost report will cover the state fiscal year (July 1 through June 30). Future timelines will require annual cost report submissions by December 31 with cost settlements process by June 30. LEAs should be cognizant of events surrounding provision of materials, trainings, cost reporting, and cost settlement, and adhere to DPW and CMS mandated deadlines and requirements. The following timeline provides estimates for the completion of key tasks in the cost settlement process. More detailed dates for the key tasks will be provided when they are available. 81

82 Timeline of Events 82 Key TasksDate Timeline for Completion MCRCS Open to LEAsMarch 5, 2014 LEAs complete annual cost reportsApril 18, weeks Desk reviews completed, including any cost report revisions and re- certifications June 6, weeks Cost settlements calculatedJune 13, week LEAs return signed CPE Certification forms June 25, weeks

83 Contacts 83 Help Desk Toll-free Number: Cost Reporting Questions:

84 Questions? 84

85


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