Pennsylvania Medicaid School Based Claiming

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1 Pennsylvania Medicaid School Based Claiming SBAP Cost Settlement Training October

2 Agenda Cost Settlement Calculation Introduction Cost Summary Report Cost Settlement Summary Cost Settlement Calculation Important Reminders Cost Reporting Changes IEP Ratio Reporting Contacts Questions 2

3 Cost Settlement Calculation Introduction Once an LEA completes the annual Medicaid cost reporting process each year, there are two important schedules within the cost report that provide details for the calculation of the annual cost settlement. The Cost Summary Report shows summary level detail on the costs entered in to the cost reports by the LEA and the application of the key statistical elements such as the Direct Medical Service Percentage, the Indirect Cost Rate, the IEP Ratio, the Specialized Transportation Ratio and One Way Trip Ratio to determine the Medicaid Allowable Costs. The Cost Settlement Summary shows the 4 step process by which the final cost settlement is calculated including the determination of the NET Medicaid Allowable Costs to be included in the cost settlement calculation, the NET Medicaid Interim Payments included in the cost settlement calculation, and the comparison of the NET Medicaid Allowable Costs to the NET Medicaid Interim Payments to determine the NET Medicaid Cost Settlement. The data in these two schedules is based primarily on data provided by the LEA through the cost reporting process and the interim claiming activity. The main element of the cost settlement calculation for which a single LEA cannot control is the Direct Medical Service Percentage, which is calculated based on the average of the RMTS results from the three quarterly time studies. 3

4 Cost Summary Report Direct Medical Services In the LEA Information Summary Report section of the cost report, the LEA can view a summary of all of the costs entered by the LEA as well how each data element impacts the determination of the Medicaid Allowable Costs amount. All of the data elements in the table below are based on LEA input in to the cost report except for the Direct Medical Percentage, which is a statewide average of the three quarterly RMTS. After the application of the Direct Medical Percentage (from the RMTS results), the ICR, and IEP Ratio, the total Medicaid Allowable Cost of $80, for Direct Medical Services will be used when determining the final settlement. 4

5 Cost Summary Report Transportation and Tuition Costs *Keep these numbers in mind for when we get into the cost settlement calculation on the upcoming slides. The next sections of the Cost Summary Report show the calculation of the Medicaid Allowable Costs for Transportation Services and for Tuition costs. For Transportation Services, the LEA reported all costs as only specialized so the Specialized Transportation Ratio defaults to 100%. The Costs are subjected to the LEA s Indirect Cost Rate and the One Way Trip Ratio to determine the Medicaid Allowable Transportation Costs included in the calculation of the cost settlement. For Tuition Costs, the Net Health Related Tuition Payments is based on the calculation of the individual Tuition Payments reported times the Health Related Tuition Percentage for the school receiving the tuition payment. The resulting amount is subjected to the LEA s Indirect Cost Rate and IEP Ratio to determine the Medical Allowable Tuition Costs included in the calculation of the cost settlement. 5

6 Cost Settlement Summary The Cost Settlement Summary of the cost report illustrates the calculation of the cost settlement for the LEA based on the Medicaid Allowable Costs for Direct Medical Services, Transportation Services, and Tuition Costs as calculated on the Cost Summary Report and the Medicaid Interim Claims. The Cost Settlement Summary breaks down the calculation of the cost settlement in to 5 discrete steps: Step 1: Comparison of Medicaid Allowable Costs by Service Category to Medicaid Interim Payments by Service Category to determine those costs that can be included in the cost settlement calculation. REMINDER: LEAs will only be able to include costs in their cost settlement for Service Categories for which they have at least one Medicaid paid claim. Step 2: Application of FMAP percentages to Medicaid Allowable Costs from Step 1 to determine the NET Medicaid Allowable Costs. REMINDER: The Medicaid Allowable Costs in Step 1 are GROSS Medicaid Allowable Costs, inclusive of both the State and Federal Share while the Medicaid Interim Payments in Step 3 are NET, reflective of the Federal Share Only. Step 2 is required to determine the NET Medicaid Allowable Costs for comparison to the NET Medicaid Interim Payments in computing the NET Medicaid Cost Settlement. Step 3: Summary of Medicaid Interim Payments received illustrates the NET interim payments received by the LEA by Service Category and in the aggregate. Step 4: Comparison of NET Medicaid Allowable Costs from Step 2 to NET Medicaid Interim Payments from Step 3 to determine the NET Medicaid Cost Settlement for the LEA. Step 5: Statement of Federal Share of Medicaid Cost Settlement, equals the amount calculation in Step 4. 6

7 Cost Settlement Summary Step 1 Step 1: Comparison of Medicaid Allowable Costs by Service Category to Medicaid Interim Payments by Service Category to determine those costs that can be included in the cost settlement calculation. REMINDER: LEAs will only be able to include costs in their cost settlement for Service Categories for which they have at least one Medicaid paid claim. The Medicaid Allowable Costs amounts in this step come directly from the Medicaid Allowable Costs fields on the Cost Summary Report. Direct Medical Services = $ 80, Transportation = $ 33, Tuition = $ 3, Total Medicaid Allowable Costs = $118,

8 Cost Settlement Summary Step 2 Step 2: Application of FMAP percentages to Medicaid Allowable Costs from Step 1 to determine the NET Medicaid Allowable Costs. REMINDER: The Medicaid Allowable Costs in Step 1 are GROSS Medicaid Allowable Costs, inclusive of both the State and Federal Share while the Medicaid Interim Payments in Step 3 are NET, reflective of the Federal Share Only. Step 2 is required to determine the NET Medicaid Allowable Costs for comparison to the NET Medicaid Interim Payments in computing the NET Medicaid Cost Settlement. The $116, in GROSS Medicaid Allowable Costs from Step 1, is subjected to the FMAP percentages for the respective quarters covered by the annual cost settlement. The resulting $63, in NET Medicaid Allowable Costs is used in calculating the cost settlement for the LEA. 8

9 Cost Settlement Summary Step 3 Step 3: Summary of Medicaid Interim Payments received illustrates the NET interim payments received by the LEA by Service Category and in the aggregate. The interim payment amounts illustrated in this step reflect the amounts paid to the LEA based on the MMIS claims data for each Service Category and include only the Federal Share. The $37, in NET Medicaid Interim Payments Received is used in calculating the cost settlement for the LEA. It is compared against the amount for NET Medicaid Allowable Costs calculated in Step 2. 9

10 Cost Settlement Summary Step 4 and Step 5 Step 4: Comparison of NET Medicaid Allowable Costs from Step 2 to NET Medicaid Interim Payments from Step 3 to determine the NET Medicaid Cost Settlement for the LEA. Step 2: NET Medicaid Allowable Costs = $ 63, Step 3: NET Medicaid Interim Payments = $ 37, Step 4: NET Medicaid Cost Settlement = $ 26, Step 5: Statement of Federal Share of Medicaid Cost Settlement, equals the amount calculation in Step 4. 10

11 Cost Settlement Calculation Important Reminders The Cost Settlement Calculation is driven primarily on items for which the LEA has direct input: direct medical service, transportation, and tuition costs; IEP Ratio; Specialized Transportation Ratio; One Way Trip denominator; Medicaid interim claiming activity. The Direct Medical Service percentage from the RMTS is the main item in the cost settlement calculation that an individual LEA does not control as it is based on the statewide average. LEAs will only receive credit for costs in service categories for which they have received at least one Medicaid paid interim claim. If an LEA includes costs for Occupational Therapy services but does not have at least one Medicaid paid interim claim for Occupational Therapy services, they will not receive credit for those costs in the calculation of their cost settlement. The Medicaid Allowable Costs as calculated through the cost report are GROSS amounts, inclusive of both State and Federal share and must be subjected to the FMAP rates to determine the NET amounts, reflective of the Federal share only for the purposes of completing the cost settlement calculation. Medicaid Interim Payment amounts are already provided as NET for the purposes of completing the cost settlement calculation and do not need to be subjected to the FMAP rates. 11

12 Cost Settlement Calculation Important Reminders The following example outlines the final cost settlement results for three LEAs and how to interpret the results. LEA A, LEA B and LEA C, have the same amount of NET Medicaid Allowable cost, in this example, $100 each, as determined through the annual cost report. LEA A has received $75 in NET Medicaid Interim Payments for FFS claims from FY14 dates of service. LEA B has received $50 in NET Medicaid Interim Payments for FFS claims from FY14 dates of service. LEA C has received $125 in NET Medicaid Interim Payments for FFS claims from FY14 dates of service. The Cost Settlement for LEA A is $25 ($100 $75). LEA A receives $25 through cost settlement. Total reimbursement for LEA A is $100 ($75 through Medicaid Interim Payments for FFS claims plus $25 through Cost Settlement). The Cost Settlement for LEA B is $50 ($100 $50). LEA B receives $50. Total reimbursement for LEA B is $100 ($50 through Medicaid Interim Payments for FFS claims plus $50 through Cost Settlement). The Cost Settlement for LEA C is $25 ($100 $125). LEA C pays back $25. Total reimbursement for LEA C is $100. ($125 through Medicaid Interim Payments for FFS claims minus $25 through Cost Settlement). The total reimbursement for all three LEAs is $100 based on the calculation of their NET Medicaid Allowable through the Medicaid cost report. 12

13 Cost Reporting Changes IEP Ratio Reporting The main change to the cost reporting requirements for the School Year Cost Report is on the process for reporting the IEP ratio. As a reminder, 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 For the School Year Cost Report, the LEA s will be required to self report both the numerator and denominator of their IEP ratio. 13

14 Cost Reporting Changes IEP Ratio Reporting 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,

15 Cost Reporting Changes IEP Ratio Reporting 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. 15

16 Contacts Help Desk Toll-free Number: Cost Reporting Questions: 16

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