Presentation on theme: "Case Management Overview of Cost Reporting Tool January 27-28, 2009."— Presentation transcript:
Case Management Overview of Cost Reporting Tool January 27-28, 2009
Cost Report Principles
Purpose of the Cost Report The purpose of a cost report is to define the cost of each service and determine a rate per unit for the fiscal period (i.e. cost report period). The cost report period should cover the twelve month period of the providers fiscal year. Submitted using Form , Financial and Statistical Report for Purchase of Service Contracts. The cost report allows for reporting of financial (cost) and statistical (units) data.
Cost Report Submission Actual cost reports for the current fiscal year are due no later than September 30 th of each year. Projected cost reports are due no later than July 1 st of each year. We encourage you to return them by June 1 st. –This allows cost reports to be reviewed and rates entered in the system for authorization and billing starting July 1.
Reasonable Costs Only reasonable and allowable cost should be reported on the cost report. Reasonable cost principles are set forth in the following: Federal Register – 42 CFR Part 413 Office of Management and Budget (OMB) Circular A-87, Attachment B CMS Publication 15-I
Other Cost Report Principles The cost report must be completed on an accrual basis of accounting and in accordance with Generally Accepted Accounting Principles (GAAP). Accrual accounting is defined as the recognition of cost or expenses when incurred. For example, when expenses are incurred in the last month of a cost reporting period but are paid in the first month of the following cost reporting period, include them in the cost report period in which they are incurred, and not the cost report period in which they are paid.
Accrual Accounting If another basis for accounting is used (e.g. cash-basis), expense amounts should be adjusted to the accrual basis for cost reporting purposes. This is necessary to obtain information that is comparable among facilities.
Information Sources Information to complete the cost report may come from various sources depending on each providers method of tracking costs. Personnel, payroll, provider expense records, activity logs, mileage logs, time studies, and billable unit report are examples of tools that may be used to compile information to complete the cost report.
What to Send and Where Form is available on the IME website at completed cost reports and documentation to: (Preferred Method) Mail paper copies to Provider Cost Audit & Rate Setting Unit, PO Box 36450, Des Moines, IA A signed copy of the Certification Page must be mailed, with original signatures, through US Mail, FedEx, etc. Fax or is not acceptable.
Supporting Financial Records Per IAC 441 Chapter 79.3: A provider of a service that is charged to the medical assistance program shall maintain complete and legible records as required in this rule. Failure to maintain records or failure to make records available to the department or to its authorized representative timely upon request may result in claim denial or recoupment. Per IAC 441 Chapter 79.3(1): A provider of service shall maintain records as necessary to: –(1) Support the determination of the providers reimbursement rate under the medical assistance program; and –(2) Support each item of service for which a charge is made to the medical assistance program. These records include financial records and other records as may be necessary for reporting and accountability.
Components of the Cost Report Provider Identification PageProvider Info/Rate Summary Certification PageStatistics/Demographics Schedule BFTEs and Wages Schedule CDepreciation Schedule DExpenses Schedule EBalance Sheet Schedule FAllocation Methodology
Provider Identification Page Provider Information –The provider number is your assigned NPI/Taxonomy number – the full number should be used (NPI-Taxonomy-Zip9). In the absence of an NPI/Taxonomy number, the Medicaid provider number (legacy number) should be used. –Provider Name (will automatically populate) –City (will automatically populate) –Report Type – Actual or Projected –FYE – Fiscal Year End Unit Cost Summary –This data is pulled from Schedule D. No input is required. –If you have a BI Waiver or Habilitation provider number, please ensure provider number is included on this page. If NPI was entered above, these provider numbers should automatically populate.
Certification Page The purpose of the certification page is to report agency statistical information and record the signature of the authorized officer of the agency. Certification page should be signed to attest that the information is true and correct to the best of your knowledge. Must receive a signed Certification Page to consider the cost report complete.
Certification Page Name of Person to Contact with Questions –We will generally try to communicate with your specific contact person; however, some circumstances may require us to direct questions to the Medicaid provider instead of a contracted preparer. Statistical Data for Period of Report –Total number of units of service provided Includes all units of service provided regardless of whether or not payment has been received (includes denied claims, claims not yet submitted to IME, pending claims, etc.) Report units by procedure code with MBC and 100% County units reported separately in their designated columns.
Schedule B Gross Salaries & Staff Numbers The purpose of Schedule B, Staff Numbers and Wages, is to report full-time equivalent numbers of staff and wages by job title. 1.0 FTE is considered to be 2,080 paid hours. For example, a person that was paid for 1,040 hours would be considered 0.5 FTE. The wages reported on Sch. B should tie to the amounts reported on Sch. D, Column 1. Detail the job titles under each each classification with the applicable number of staff, FTEs and Wage information.
Schedule B Completing this schedule monitors staffing levels by job classification. Details the amount of FTEs that are required to maintain service levels at the agency.
Schedule C The purpose of Schedule C, Property and Equipment Depreciation and Related Party Cost, is to report information related to depreciable assets. If your agency has a straight-line depreciation schedule, this may be submitted in lieu of Schedule C. This must include subtotals and reconcile to Schedule D. Schedule C includes the original acquisition costs, capital improvements, and depreciation on buildings and equipment owned by the provider.
Schedule C The total depreciation amounts reported on Sch. C must tie to the amounts reported on Sch. D., column 1, lines 4410, 4420, and Depreciation expense must be calculated using a the straight-line method.
Schedule C To determine the estimated useful life on new assets, the American Hospital Association (AHA) guidelines should be followed. If a depreciable asset at the time of its acquisition has an estimated useful life of at least two years and a historical cost of at least $5,000, the cost must be capitalized and depreciated over the estimated useful life. On Sch. C, the estimated useful life is reported as a percentage (e.g. an asset with an estimated useful life of 5 years would be reported at 20%).
Schedule C When items are purchased as an integrated system, all items must be considered as a single asset when applying the capitalization threshold. Items that have a stand-alone functional capability may be considered on an item-by-item basis. –For example, an integrated system of office furniture with interlocking panels and desktops that are supported by locking panels must be considered as a single asset. –Stand-alone office furniture such as a chair may be considered on an item-by-item basis.
Schedule C – Change of Ownership If a change of ownership occurs, the historical cost of the assets acquired will be the historical cost less depreciation allowed to the previous owner (book value).
Schedule C – Related Party If property is being leased from a related party, information regarding the lessors costs must be submitted on Schedule C. Related to the provider means that the provider to a significant extent is associated or affiliated with, or has control of, or is controlled by, the organization furnishing the services, facilities, or supplies. Related party property cost is limited to the lessors cost.
Schedule D The purpose of Schedule D, Expense Report, is to report total agency expenses and allocate those expenses to the various services provided by an agency. The allocation of costs per service includes all costs for the agency and should be consistent with the costs included on the general ledger.
Schedule D Direct Cost includes expenses that are identifiable to a specific service. Direct cost could include, but is not limited to: –All direct personnel & immediate supervisors involved in a service (salary, benefits and payroll tax) –Mileage costs for travel necessary in the provision of service –Time spent documenting services provided –Time spent in staff meetings related to a specific service –Occupancy expenses related to space dedicated to a specific service
Schedule D Indirect Cost includes expenses that are not identifiable to any specific service. This includes expenses incurred to benefit all functions of the agency. –Indirect Cost will be allocated across all programs. Therefore, all expenses included in Indirect Cost must be allowable under all programs. –Indirect Costs can include, but are not limited to: Overhead expenses from the County Administrative and Clerical staff Office supplies Occupancy Expense related to general use areas Property or liability insurance
Schedule D Expense Report Gross Total - Column 1: Report total operating costs of the agency. Total expenses should be supported by a general ledger, working trial balance or other schedule. Revenue Adjustments - Column 2: Use this column to offset expense with any related revenues.
Schedule D Expense Report Excluded Costs - Col. 3: Use this column to remove expense that is not reimbursable under the Medicaid program. This column should not be used to report Other Program expense. –Excluded Cost may include, but is not limited to the following: Fundraising Bad Debt Fines and Penalties Lobbying (includes the portion of certain organization dues apportioned for lobbying) Promotional advertising/marketing Mileage expense in excess of the State Reimbursement Rate Other expenses unallowable per OMB Circular A-87, Att. B.
Schedule D Expense Report Excluded Cost – Mileage Limit: Mileage cost is limited to the DHS employee reimbursement rate. Any reimbursement paid to employees in excess of the limit should be excluded in Column 3. –The current mileage rate can be found at the Department of Administrative Services website: –The policy is located under the Fleet and Mail Services menu 7/1/05 – 12/31/07$0.34 1/1/08 – Current$0.39
Schedule D Expense Report Adjusted Cost – Column 4: This column shows costs that are allowable and allocable to Case Management, Elderly Waiver, Other Programs and Indirect Expense (Gross Cost - Revenue Deductions - Excluded Cost = Adjusted Cost). Case Management Direct Service Cost – Column 5 to 7: Use these column to report costs and units directly associated with case management services. –Column 5: Include costs and units associated with W0574/W0578 MR/DD, W1330 Habilitation and W1409 BI consumers to calculate a blended rate. If the same rate is applicable for W0579 CMI and MBC (Magellan) consumers, include those costs and units in this column. –Column 6: Include costs and units associated with W0579 CMI and MBC (Magellan) consumers if a separate rate is needed. –Column 7: Include costs and units associated with W0580 Childrens Mental Health Waiver.
Schedule D Expense Report Elderly Waiver Direct Service Cost – Column 8: Use this column to report costs and units directly associated with W1410 Elderly Waiver services. Other Programs Direct Cost – Column 9: Use this column to report cost directly associated with any program other than Case Management or Elderly Waiver. Total Facility Indirect Cost – Column 10: This column includes costs that benefit all functions of the agency and cannot be directly related to any specific service or program. –These costs will be allocated to all programs on Schedule D. –All line items may be used to report indirect expense in Column 10. –Case management indirect overhead expenses from the County should be included on Line 5000, Column 10.
Schedule D Expense Report Total Facility Indirect Cost – Continued: –Each agency is responsible for developing an acceptable method of distributing indirect cost to the various programs and supporting its rationale. –The standard method is based on the total accumulated direct costs for each program before the indirect cost allocation. –If an agency believes that another allocation method is more appropriate, it may be used. However, the agency must submit documentation to support and justify the alternate allocation basis used.
Schedule D Expense Report Unit Cost Calculation – Last Page of Sch D: –Total Direct + Total Allocated Indirect = Total Expense for each service –Units: Total Expense after Deductions is divided by Total Units for each Service Must include all units of service provided, regardless of whether or not payment has been made
Schedule D A definition of each of the cost centers on Sch. D is located in the Purchase of Services Handbook. The handbook can be found at the following website:
Schedule F The purpose of Schedule F, Cost Allocation Procedures, is to report other supplemental information related to agency operations and accounting procedures. Complete Schedule F when your agency provides more than one service or service component.
Schedule F Cost allocations are required for direct costs benefiting more than one service or service component and for the providers indirect costs. Direct Costs are defined as those which are directly identifiable to services or components. Indirect Costs are defined as those which are not readily identifiable with each service or service component.
Schedule F The schedule provides questions regarding methods used in allocating expenses which benefit more than one service or service component. The provider should send supporting documentation for the allocation basis of these costs.
Rates and Cost Settlement
Determination of Payment Rates Projected Rates Case Management providers will be paid at their projected rate for claims billed during the fiscal year. You will not be able to get prior authorization in ISIS until a projected rate has been entered effective July 1 st of each fiscal year. Elderly Waiver providers are capped at $70 per month per member.
Determination of Payment Rates Finalized Rates The finalized payment rates will be established retrospectively after review of the Actual and Allowable Cost per Unit from the actual cost report. –Retrospective – the finalized rate becomes effective the first day of the cost report period
Determination of Cost Settlement Amount Cost Settlement is performed by adjusting each individual paid claim. –Paid claims for procedure codes W1330 Habilitation and W1409 BI Waiver are not currently cost settled For each claim, payments made at the interim rate are taken back and new payments are made at the finalized rate. –This is evidenced by negative amounts on your remittance advice followed by a positive amount for each claim.
Determination of Cost Settlement Amount The Settlement Amount is the net of all the negative and positive claims paid for all services. Shown on the last page of the Remittance Advice. Amounts Due Provider will be paid through the usual process. Amounts Due IME will be recouped as new Original Claims are billed.
Related Websites Cost Report Templatehttp://www.ime.state.ia.us/Providers/Forms Training Materials Provider Manuals Iowa Administrative Code OMB Circular A-87http://clinton2.nara.gov/OMB/circulars/a087/a087-all Iowa Medicaid Enterprise Department of Human Services CMS Publication 15-Ihttp://www.cms.hhs.gov/manuals/pBm/list
Contact Information Provider Cost Audit and Rate Setting Unit Iowa Medicaid Enterprise P.O. Box Des Moines, IA (Local) (Toll-Free)