Pennsylvania Medicaid School Based Claiming

Transcription

1 Pennsylvania Medicaid School Based Claiming SBAP Annual Cost Report Training October

2 Agenda 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 2

3 Goals 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. 3

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 amendment to the Pennsylvania Medicaid State Plan 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 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 Fee for Service (FFS) Medicaid Administrative Claiming (MAC) LEA $ LEA $ 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

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 Roles and Responsibilities 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. If an LEA does not bill and receive interim payments for a service category, i.e. Physical Therapy, they will not receive credit for any costs associated with that service in their cost settlement. 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 2014, the LEA pays salaries and benefits for the last two weeks of June This expense occurred in July 2014, but pertained to services provided in June This expense should be recorded on the July-June 2014 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 Direct Service Payroll Information 23

24 Reporting Allowable Direct Service Costs Direct Service Payroll Information 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 24

25 Reporting Allowable Direct Service Costs Annual Payroll Information: Salaries, Fringe Benefits, and Contracted Staff Costs 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 quarter. 25

26 Reporting Allowable Direct Service Costs Direct Service Payroll Information: Salaries 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. 26

27 Reporting Allowable Direct Service Costs Direct Service Payroll Information: Benefits 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 27

28 Reporting Allowable Direct Service Costs Direct Service Payroll Information: Salaries and Benefits 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. Example: An LEA includes $10,000 in payroll expense for Physical Therapy services but has $0 in interim payments for Physical Therapy services. The LEA would not receive credit for the $10,000 in payroll expense in their cost settlement calculation. LEAs are required to report gross expenditures as well as identifying expenditures paid from federal funding sources. 28

29 Reporting Allowable Direct Service Costs Direct Service Payroll Information: Purchased Professional Services (PPS) Costs 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. 29

30 Reporting Allowable Direct Service Costs Direct Medical Services Materials and Supplies 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. 30

31 Reporting Allowable Direct Service Costs What is Depreciation? Direct Medical Services Equipment 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 31

32 Reporting Allowable Direct Service Costs Direct Medical Services Equipment Depreciation 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. 32

33 Reporting Allowable Direct Service Costs Direct Medical Services Equipment Depreciation 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 2014 (July 1, 2013 to June 30, 2014) 33

34 Reporting Allowable Direct Service Costs Direct Medical Services Equipment Depreciation 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 34

35 Reporting Allowable Direct Service Costs Annual Tuition Costs 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 35

36 Reporting Allowable Direct Service Costs Annual Tuition Costs 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 36

37 Reporting Allowable Direct Service Costs Compensation Federal Revenues 37

38 Reporting Allowable Direct Service Costs Compensation Federal Revenues 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. 38

39 Reporting Allowable Direct Service Costs Unrestricted Indirect Costs 39

40 Reporting Allowable Direct Service Costs Unrestricted Indirect Costs 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). 40

41 Reporting Allowable Direct Service Costs Unrestricted Indirect Costs 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. 41

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

43 Direct Medical Services Time Study Percentages Direct Medical Services Time Study Percentages 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. 43

44 Direct Medical Services Time Study Percentages Direct Medical Services Time Study Percentages 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. 44

45 Direct Medical Services Time Study Percentages Direct Medical Services Time Study Percentages 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 45

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

47 Individualized Education Program Ratio Individualized Education Program (IEP) Ratio 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. 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 The LEA s will be required to self report both the numerator and denominator of their IEP ratio 47

48 Individualized Education Program Ratio Individualized Education Program (IEP) Ratio The IEP ratio will be LEA specific and based on student count data. The numerator will be a based on the total number of students with an SBAP health related service included in their IEP who are Medicaid eligible based on the LEA s Promise system. The denominator will be based on the total number of students with at least one direct medical service in their IEP, based on student enrollment as of December 1 during each July June school year. For the FY 2014 cost report, covering dates of service from July 1, 2013 through June 30, 2014, the appropriate date for the ratio would be December 1,

49 Individualized Education Program Ratio In self reporting their IEP ratio, LEAs are acknowledging and agreeing to the following terms: 1. You used the Promise system to determine which of your students were Medicaid eligible on December 1, Your school accepts all fiscal liability for the accuracy of the data which you provide. PDE, DPW, or PCG will not have any liability for the accuracy of the data you submit. In certifying the cost report with the IEP ratio numerator and denominator entered, the LEA is certifying the cost data as well as the IEP ratio data, including the two terms above. 49

50 Calculating Direct Service Medicaid Allowable Costs Direct Service Medicaid Allowable Costs 50

51 Calculating Direct Service Medicaid Allowable Costs Direct Service Medicaid Allowable Costs 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. 51

52 Calculating Direct Service Medicaid Allowable Costs Now that we know about the SBAP Medicaid Cost Report process, how do the pieces fit together? Calculation Step Cost Report Element Description Value A B C D E Salary Costs of SBAP Direct Service Providers including Contract Costs (net of federal funds) Benefit Costs of SBAP Direct Service Providers (net of federal funds) Direct Service Non Personnel Cost (net of federal funds) Direct Service Non Personnel Depreciation Cost (net of federal funds) Total Direct Service Costs (net of federal funds) (Sum of Steps A through D) Cost Report Element # $950,000 1 $200,000 2 $65,000 3 $24,530 4 $1,239,530 52

53 Calculation Step Cost Report Element Description Value E Total Direct Medical Service Costs (net of federal funds) (Sum of Steps A through D) Cost Report Element # $1,239,530 See Prior Slide F Direct Medical Service % (from RMTS) 55.00% 5 G (Step F x Step H) $681,742 H Out of District Tuition Costs $75,000 6 I (Step G + Step H) $756,742 J Indirect Cost Rate K (Step I x Step J) $870,253 L Individualized Education Program Ratio 50.00% 8 M SBAP Medicaid Eligible Direct Service Gross Cost (Step L Step M) (Calculated Cost Reimbursement) $435,127 53

54 Reporting Allowable Transportation Service Costs 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 54

55 Reporting Allowable Transportation Service Costs 1. Transportation Salary costs 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 55

56 Reporting Allowable Transportation Service Costs 2. Transportation Benefits Costs 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 56

57 Reporting Allowable Transportation Service Costs 1 & 2. Transportation Payroll Costs 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, Bus Attendants, 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 specialized transportation only or not specialized transportation only (details on later slide) 57

58 Reporting Allowable Transportation Service Costs 3. Approved Specialized Transportation Non Personnel costs 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 specialized transportation only or not specialized transportation only (details on later slide) 58

59 Reporting Allowable Transportation Service Costs 4. Transportation Equipment Depreciation Costs 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 specialized transportation only or not specialized transportation only (details on later slide) 59

60 Reporting Allowable Transportation Service Costs 5. Unrestricted Indirect Costs 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). 60

61 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 Specialized Transportation Ratio = Total Number of IEP Students Receiving Specialized Transportation Services Total Number of ALL Students Receiving Transportation Services (Specialized or Non Specialized) The ratio is calculated and reported annually on the Medicaid SBAP Cost Report The ratio is applied to those costs identified as not specialized transportation only 61

62 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 OWT Ratio = Total Number of Medicaid One Way Trips Total Number of ALL One Way Trips 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 62

63 Now that we know about the SBAP Medicaid Cost Report process for Specialized Transportation, how do the pieces fit together? Calculation Step Cost Report Element Description Value A B C D E Salary Costs of SBAP Specialized Transportation Service Providers (net of federal funds) Benefit Costs of SBAP Direct Specialized Transportation Providers (net of federal funds) Specialized Transportation Non Personnel Cost (net of federal funds) Special Transportation Non Personnel Depreciation Cost (net of federal funds) Total Specialized Transportation Service Costs (net of federal funds) (Sum of Steps A through D) Cost Report Element # $225,000 1 $65,000 2 $45,000 3 $14,000 4 $349,000 63

64 Calculation Step Cost Report Element Description Value E Total Specialized Transportation Service Costs (net of federal funds) (Sum of Steps A through D) Cost Report Element # $349,000 See Previous Slide F Indirect Cost Rate G Step E times Step F $401,350 H Specialized Transportation Ratio 32.00% 6 I Step G times Step H $128,432 J One Way Trip Ratio 48.00% 7 K SBAP Medicaid Eligible Specialized Transportation Gross Cost (Step I times Step J) $61,647 64

65 Now that we know how the SBAP Medicaid Direct Medical Service and Specialized Transportation Costs are calculated, how is the settlement determined? Calculation Step Cost Report Element Description Value A SBAP Medicaid Eligible Direct Service and Specialized Transportation Gross Cost Cost Report Element # $496,774 See Step N for Direct Service and Step K for Specialized Transportation B C July September (x 0.25) July September Federal Share (54.28% FMAP) October June (x 0.75) October June Federal Share (53.52% FMAP) $124,194 $67,412 $372,580 $199,405 D Total Medicaid Allowable Costs Net $266,817 65

66 Now that we know how the SBAP Medicaid Direct Medical Service and Specialized Transportation Costs are calculated, how is the settlement determined? Calculation Step Cost Report Element Description Value D Total Medicaid Allowable Costs Net $266,817 E Total Medicaid Interim Payments - Net $250,257 F Total Medicaid Cost Settlement - Net $16,560 66

67 Cost Settlement Calculation 67

68 Cost Settlement Calculation Cost Settlement Summary 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. 68

69 Cost Settlement Calculation 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

70 Cost Settlement Calculation 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

71 Cost Settlement Calculation Cost Settlement Summary 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. 71

72 Cost Settlement Example 1. If the LEA s Medicaid costs exceed reimbursement received, the LEA will receive a settlement. Cost Settlement Test LEA1 Medicaid Cost for Direct Medical Services and Transportation $510,000 Federal Share (see slide for details) (Federal Share based on blended FMAP Rates published by the US Department of Health and Human Services) 54.28% & 53.52% Federal Share Amount $273,912 Medicaid Interim Payments Received for Direct Medical and $255,000 Transportation Services Payment Due to LEA (Federal Share Only) $18,921 72

73 Cost Settlement Example 2. If the LEA s Medicaid costs are less than reimbursement received, the LEA will pay back the difference to CMS. Cost Settlement Test LEA2 Medicaid Cost for Direct Medical Services and Transportation $450,000 Federal Share (see slide for details) (Federal Share based on blended FMAP Rates published by the US Department of Health and Human Services) 54.28% & 53.52% Federal Share Amount $241,695 Medicaid Interim Payments Received for Direct Medical and $255,000 Transportation Services Payment Due from LEA (Federal Share Only) ($13,305) 73

74 Desk Review Overview 74

75 Desk Review Overview 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

76 Desk Review Overview 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

77 Desk Review Overview Desk Review Process PCG will send each LEA a Desk Review via SBAPsupport@pcgus.com. 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. 77

78 Desk Review Overview Desk Review Process 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 recertified. Notify PCG once this is complete at SBAPsupport@pcgus.com to expedite the process. PCG will then conduct a secondary review of the revised information. 78

79 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

80 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

81 Timeline of Events 81

82 Timeline of Events The timeline outlined for FY14 cost settlement is consistent with the expected for the cost settlement process for all periods moving forward. The FY13 timeline was a unique timeline given the ongoing implementation of the CPE reimbursement methodology. The Medicaid cost report will cover the state fiscal year (July 1, 2013 through June 30, 2014). 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 dates for the completion of key tasks in the cost settlement process. 82

83 Timeline of Events Key Tasks MCRCS Open to LEAs LEAs complete annual cost reports Desk reviews completed, including any cost report revisions and recertifications Date October 20, 2014 December 31, 2014 March 31, 2015 Timeline for Completion 11.5 weeks 13 weeks Cost settlements calculated May 11, weeks LEAs return signed CPE Certification forms June 12, weeks 83

84 Contacts Help Desk Toll-free Number: Cost Reporting Questions: 84

85 Questions? 85

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