arizona medicaid school based claiming - public … medicaid school based claiming comprehensive...

Arizona Medicaid School Based ClaimingComprehensive Cost Report TrainingComprehensive Cost Report TrainingApril 2012

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AgendaAgenda

• GoalsP i Ch h Di S i Cl i i• Programmatic Changes to the Direct Service Claiming (DSC) Program

• Medicaid Cost Reporting RequirementsDirect Service Cost Reporting Requirements• Direct Service Cost Reporting Requirements

• Transportation Cost Reporting Requirements• Cost Settlement Calculation

Ti li f E t• Timeline of Events• Preparing Now for Annual Cost Reporting• Contacts

Q ti• Questions

2

GoalsGoalsThe purpose of this training is to help LEAs:

Understand the cost reporting process;• Understand the cost reporting process; • Learn program requirements and responsibilities; • Understand the implications of reporting or failure to

accurately report;accurately report;• Understand the Medicaid cost settlement calculation and

how the various contributing factors impact the calculation; and;

• Gain insight on how to prepare for the completion of the Medicaid cost report, including immediate and long-term next steps.

3

Programmatic Changes to the Direct Service g gClaiming (DSC) Program

4

Programmatic Changes to the DSC Program• Effective July 1, 2011 the Centers for Medicare and Medicaid Services

(CMS) approved the Arizona Medicaid State Plan Amendment to implement a Medicaid cost reimbursement and cost settlement process for the Direct Service Claiming (DSC) Program.

• 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 gy

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.

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Programmatic Changes to the DSC ProgramHow 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 processparticipate 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/az.• The Medicaid cost report calculates the actual costs of providing Medicaid covered

health related services and will be compared to Medicaid reimbursement received through DSC interim payments for the year.g p y y

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Medicaid Cost Reporting Req irementsMedicaid Cost Reporting Requirements

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Medicaid Cost Reporting RequirementsLEA requirements for participation in the Direct Service Claiming (DSC) program:1 C ti b itti di t i l i1. Continue submitting direct service claims;2. Include direct service and personal care staff in the random moment time

study (RMTS);3 Report costs for direct service and personal care staff on a quarterly basis;3. Report costs for direct service and personal care staff on a quarterly basis;4. Report costs on an accrual basis; and5. Include only allowable costs on the cost report.

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Medicaid Cost Reporting Requirements1. LEAs are required to continue with direct service documentation and

claiming processes throughout the year.LEA ill ti t i i t i t d l i• 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 only submit direct service claims for participants included in the y p pquarterly time study.

• In order to receive Medicaid reimbursement, LEAs must continue to adhere to the participation agreement and program requirements.

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Medicaid Cost Reporting Requirements2. LEAs must include direct service and personal care staff providing health

related services to special education students on the random moment time study (RMTS) staff pool liststudy (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.

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Medicaid Cost Reporting Requirements3. LEAs are required to report costs for direct service and personal care staff

on a quarterly basis.Th t ttl t di tl li k t b th th t l fi i l• The cost settlement process directly links to both the quarterly financial submissions and the RMTS.

• Each LEA will report the quarterly costs for their staff included in the time study staff pool.

• Quarterly cost data will be automatically aggregated by the Cost Reporting System. Data includes:

• Salary and benefit cost data for direct medical service providers, and• Purchased Professional Services (PPS) cost data for direct medical service providers.( ) p

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Medicaid Cost Reporting Requirements4. All costs identified must be reported on an accrual basis.

• Both the quarterly cost reports and the annual Medicaid cost report must be reported on an accrual basisreported 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 ti i hi h th t ti th th h th t i dtime 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.

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Medicaid Cost Reporting Requirements4. All costs identified must be reported on an accrual basis (con’t).

Example of Accrual Based Reporting:• In April 2012, the LEA pays salaries and benefits for the last two weeks of March

2012.• This expense occurred in April 2012 but pertained to services provided in March• This expense occurred in April 2012, but pertained to services provided in March

2012.• This expense should be recorded on the January-March 2012 cost report when

the transaction occurred, not when it was paid.

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Medicaid Cost Reporting Requirements5. Only allowable costs defined by CMS can be reported on the cost report.

• CMS approved a cost reimbursement methodology that includes 13 elements (listed on the following slides)(listed on the following slides).

• The CMS-approved cost and data elements related to direct medical services include:

• Salary costs for eligible direct service and personal care providers;• Benefit costs for eligible direct service and personal care providers;Benefit costs for eligible direct service and personal care providers;• Purchased Professional Services (PPS) costs for eligible direct service and personal

care providers;• Arizona Department of Education Unrestricted Indirect Cost Rate (UICR) (pre-populated

by PCG);R d M Ti S d (RMTS) Di M di l S i P R l (• Random Moment Time Study (RMTS) Direct Medical Service Percentage Results (pre-populated by PCG); and

• Individualized Education Program (IEP) Ratio.

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Medicaid Cost Reporting Requirements5. Only allowable costs defined by CMS can be reported on the cost report.

• The CMS-approved cost and data elements related to transportation include:• Salary costs for eligible transportation staff;• 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.);• Depreciation costs for approved transportation service equipment;Depreciation costs for approved transportation service equipment;• Specialized transportation trip ratio; and• Specialized transportation vehicle ratio.

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Medicaid Cost Reporting RequirementsIn summary,1. Continue submitting direct service claims;2. Include direct service and personal care staff in the random moment time

study (RMTS);3. Report costs for direct service and personal care staff on a quarterly basis;4 R t t l b i d4. Report costs on an accrual basis; and5. Include only allowable costs on the cost report.

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Direct Service Cost Reporting Process and p gRequirements

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Cost Reporting and Cost Settlement C l l ti H d tCalculation Handout

• The following slides outline the cost reporting and cost settlement process and reference the “Cost Settlement Calculation & Reference Guide.”

• In this section we will walk through each critical component involved in the annual direct service cost reporting process.

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Reporting Allowable Direct Service Costs1. Direct Service and Personal Care Payroll Information

B C D E B C D1. Direct Service and Personal Care Payroll Information

B C D E=B+C+D

Salaries BenefitsPurchased

Professional Services Costs

Total Costs

$292,453.62 $52,375.28 $0.00 $344,828.90 $123,168.00 $28,165.10 $0.00 $151,333.10 $636,258.60 $111,089.20 $0.00 $747,347.80 $319,695.96 $183,456.13 $0.00 $503,152.09 $182,117.98 $81,115.86 $0.00 $263,233.84 $490,830.84 $206,999.44 $54,682.93 $752,513.21

$893,718.02 $382,518.42 $125,672.21 $1,401,908.65 $2,938,243.02 $1,045,719.43 $180,355.14 $4,164,317.59

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Reporting Allowable Direct Service Costs

• Medicaid allowable costs in the annual cost report must relate to one of the direct ser ices listed belo hich are clearl o tlined in the Ari ona Cost

1. Direct Service and Personal Care Payroll Information

direct services listed below, which are clearly outlined in the Arizona Cost Reporting Manual.

• Reimbursable services under the Direct Service program include:• Audiology Services;gy• Behavior Health Services;• Nursing Services;• Occupational Therapy Services;• Personal Care Services;Personal Care Services;• Physical Therapy Services; and• Speech Language Pathology Services.

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R l

1. Direct Service and Personal Care Payroll Information: Salaries

• Regular wages• Paid time off (e.g., sick or annual leave)• Overtime• Bonuses or longevityBonuses 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.

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E l id h lth/ di l lif di bilit i i b fit d t l

1. Direct Service and Personal Care 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

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• Only those salary and benefit staff costs for direct service providers

1. Direct Service and Personal Care 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 costand received interim payments will be included in the Medicaid cost settlement calculation.

• Any salary and benefit information reported by LEAs in the quarterly financial submission process will automatically be aggregated by individual di t i id ithi th t ti tdirect service provider within the cost reporting system.

• LEAs are required to report gross expenditures as well as identifying expenditures paid from federal funding sources.

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Reporting Allowable Direct Service Costs1. Direct Service and Personal Care 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 nonby 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 reimbursementRMTS 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.

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Reporting Allowable Direct Service Costs2. Compensation Federal Revenues

2.FF

Compensation Federal Revenues

$45 543 23$45,543.23 $0.00 $0.00

$9,245.36 $0.00 $0 00$0.00

$168,392.46 $223,181.05

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• As LEAs are required to report gross expenditures, expenditures for funds paid from federal funding sources should be appropriately identified

2. Compensation Federal Revenues

paid from federal funding sources should be appropriately identified. • The cost reporting system will properly calculate the net expenditures based

on costs reported.• These costs are aggregated from the quarterly entry process, so it is

important that these costs are accurately reported during each quarterly financial submission.

• If you failed to properly report expenditures paid with federal funding sources please contact PCG to facilitate necessary corrections.y

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Reporting Allowable Direct Service Costs3. Unrestricted Indirect Costs

H I=G*H

Unrestricted Indirect Cost Rate

Unrestricted Indirect Costs

10.43% $31,215.50 % $10.43% $15,784.04

10.43% $77,948.38 10.43% $51,514.47 10.43% $27,455.29 10.43% $78,487.13

10.43% $128,655.74 $411,060.54

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• CMS recognizes that LEAs incur indirect costs for direct service program administration

3. Unrestricted Indirect Costs

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 Ari ona Department of Ed cation (ADE) is the cogni ant agenc• The Arizona Department of Education (ADE) is the cognizant agency responsible for calculating and approving LEA indirect cost rates on behalf of the United States Department of Education (US DOE).

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• PCG will pre-populate the LEA’s unrestricted indirect cost rate (UICR) into the Medicaid cost report form


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.

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Direct Medical Service Percentage4. Direct Medical Service Percentage

4.KK

Direct Medical Service

Percentage

41 96%41.96%41.96%41.96%41.96%20.22%41 96%41.96%

41.96%

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Direct Medical Service Percentage

• The direct medical service percentage is calculated by PCG from the results of the quarterly random moment time study (RMTS)

4. Direct Medical Service Percentage

of the quarterly random moment time study (RMTS).• A percentage will determine how much time direct service and personal

care providers spend performing allowable direct medical services.• There are two direct medical service percentages used for the purpose of p g p p

cost reporting: one for direct service providers and one for personal care providers.

• The direct medical service percentage is a statewide percentage and is not LEA specificLEA specific.

• The direct medical service percentage used within the Medicaid cost report is the combination of the three quarterly time study periods that occurred during the state fiscal year.

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• Direct medical service staff have other LEA specific responsibilities other th d li i di t di l i d CMS i h i


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 directto determine what portion of these costs pertain to the provision of direct medical services.

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Example:If th di t di l i t 41 96% d LEA id


• 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.• 41.96% * $60,000 = $25,176$ , $ ,

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Individualized Education Program Ratio5. Individualized Education Program (IEP) Ratio

5.LL

IEP Ratio

42.00%42.00%42.00%42.00%42 00%42.00%42.00%

42.00%

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Individualized Education Program Ratio

• The IEP Ratio is the total number of Medicaid eligible special education t d t ith IEP ib d i b bl l t d i di id d b th

5. Individualized Education Program (IEP) Ratio

students with an IEP-prescribed reimbursable related service divided by the total number of ALL special education students with an IEP-prescribed reimbursable related service in their IEP.

• This requires the determination of the number of Medicaid eligible students that q gare enrolled in special education and have at least one IEP-prescribed reimbursable related service.

• Reimbursable related services are defined as those services that are claimable under the school-based DSC program only, which includes: Speech, Physical Therapy, Occupational Therapy Audiology Services Nursing Services Behavioral HealthOccupational Therapy, Audiology Services, Nursing Services, Behavioral Health Service, Personal Care Services.

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Individualized Education Program Ratio5. Individualized Education Program (IEP) Ratio

IEP Ratio =

Total Number of Medicaid Eligible Special Education Students with an IEP-Prescribed Related Service

IEP Ratio =Total Number of Special Education Students with an

IEP-Prescribed Related Service

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• The purpose of the IEP ratio is to allocate direct medical service costs to the Medicaid program


Medicaid program. • It is used to determine Medicaid’s portion of direct medical service costs incurred

by LEAs for the provision of direct medical services.

E h LEA ibl f idi PCG fil f th t t l i l• Each year LEAs are responsible for providing PCG a file of the total special education student population identifying those with IEP-prescribed related services.

• PCG will use this student file to:1. Calculate the numerator by performing a Medicaid match; and2. Determine the denominator from the student count on the file.

• PCG will populate the numerator and denominator of the IEP ratio in the Cost Reporting System.

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• LEAs are required to submit a student file to PCG on an annual basis detailing all students who make up the denominator


detailing all students who make up the denominator. • The data will be a ‘snapshot’ of enrollment based on the October 1st student

count. • For FY2012, PCG will redistribute October 1st lists containing the student g

population previously provided, requiring completion of two additional data fields.

• Each LEA will be asked to identify 1) which students are enrolled in special education, and 2) which of those students have a IEP-prescribed reimbursable ) prelated service.

• These lists will be provided by 5/1/2012 and each LEA will be required to return these completed with the additional data by 6/1/2012.

• LEAs must ensure proper supporting documentation is stored to support reported

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LEAs must ensure proper supporting documentation is stored to support reported counts in the event of an audit.

Calculating Direct Service Medicaid Allowable Costs

6. Direct Service Medicaid Allowable Costs

6.M=J*K*L

Direct Service Medicaid

Allowable Costs

$58,244.88 $29,451.39

$145,443.60 $96,120.67 $24,686.48

$146,448.85

$240,058.28 $740,454.15

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Calculating Direct Service Medicaid Allowable Costs

• Direct service and personal care costs entered in the Cost Reporting System by the LEA and unrestricted indirect costs will be apportioned by

6. Direct Service Medicaid Allowable Costs

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 d t i th t ttl t i dditi t t d t t tidetermine the cost settlement, in addition to any reported transportation.

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Transportation Cost Reporting Process and p p gRequirements

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Cost Reporting and Cost Settlement C l l ti H d tCalculation Handout

• The following slides outline the cost reporting and cost settlement process and reference the “Cost Settlement Calculation & Reference Guide.” I thi ti ill lk th h h iti l t i l d i th• In this section, we will walk through each critical component involved in the transportation service cost reporting process.

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Specialized Specialized Trans

Specialized Vehicle Ratio: 2/20 = 10%Specialized Transportation Trip Ratio: 4,000/20,000 = 20%

Total Transportation Payroll Costs:Bus Drivers

Mechanics

h

Specialized vs. General:$20,000 Specialized

$100,000 General

Vehicle Ratio:

x 10%

Trip Ratio: x 20%

x 20%

Costs: $4,000

$2,000

Mechanic Assistants

Operations‐Related Costs:Contracted – Trans Svcs

$0 Specialized

$50,000 General x 10%

x 20%

x 20%

$0

$1,000

Contracted – Trans equip

Lease/Rental

Insurance

$50,000 Specialized

$100,000 General x 10%

x 20%

x 20%

$10,000

$2,000Insurance

Maintenance and RepairsFuel and OilEquipment Depreciation:Buses, Cars, Minivans

$5,000 Specialized

$10 000 General x 10%

x 20%

x 20%

$1,000

$200$10,000 General x 10%

*Applied to General Costs

x 20%

*Applied to AllTrans Costs

$200

$20,200 Total Reimbursable

Reporting Allowable Transportation Costs• Some costs associated with specialized transportation are allowable for

inclusion in the Medicaid cost settlement process. • Allowable special education transportation costs include payroll costs for• Allowable special education transportation costs include payroll costs for

certain personnel, transportation operation related costs, and transportation equipment depreciation costs.

• The following section will cover:• Allowable transportation costs; • General transportation versus specialized transportation costs; and• How specialized transportation costs are allocated to the Medicaid program.

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Reporting Allowable Transportation Costs7. Transportation Payroll Information

7. Transportation Payroll InformationB C D

Salaries BenefitsPurchased

Professional Services Costs

$153,456.76 $35,678.00 $0.00

$56,784.65 $11,455.67 $23,926.00 $210,241.41 $47,133.67 $23,926.00 $ , $ , $ ,

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Reporting Allowable Transportation Costs

• Costs can be reported for the following transportation-related personnel:• Bus Drivers

7. Transportation Payroll Information

Bus Drivers• Mechanics• Mechanic Assistants

• Transportation service providers are not included on the quarterly staff pool li t h t ff l i b fit d PPS t li ibl flists, however staff salaries, benefits, and PPS costs are eligible for transportation service cost reimbursement.

• LEAs must bill and receive interim reimbursement for transportation in order for their costs to be included in the Medicaid cost settlement calculation.

• All expenditures need to be reviewed to ensure costs are reported in accordance with an accrual accounting methodology.

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• Regular wages

7. Transportation Payroll Information: Salaries

• Regular wages• Paid time off (e.g., sick or annual leave)• Overtime• Bonuses or longevityg y• Stipends• Cash bonuses and/or cash incentives

N t S l i th t f hi h ll t d d t d Th t dNote: 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.

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• Employer paid health/medical life disability vision benefits or dental

7. Transportation 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

Note: Report the expended amounts paid by the LEA which are directly associated with each staff member by type of employee benefit.y yp p y

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Reporting Allowable Transportation Costs7. Transportation Payroll Information:

PPS Costs

• Total costs of contracts for the applicable contracted staff

Note: The reported costs should be the total costs for the individual as paid by the LEA for the reporting period.for the reporting period.

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Reporting Allowable Transportation Costs8. Transportation Other Costs

88.E

Transportation Other Costs*

$78,100.00

$15 820 00$15,820.00 $93,920.00

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Transportation Operation-Related Costs

8. Transportation Other Costs

• Allowable operation related costs include:• Lease/rental• Insurance• Maintenance and repairs• Fuel and oil• Contracted – Transportation services• Contracted – Transportation equipment

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Transportation Equipment Depreciation


• Allowable depreciation expenses related to specialized transportation and vehicles include:• Buses

Mi i• Minivans• Cars• Wheelchair lifts (if purchased separately from the vehicle)

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• “Depreciation” is the systematic and rational allocation of the acquisition cost of an asset over its estimated useful life


cost of an asset over its estimated useful life.• Allowable depreciation expenses for transportation equipment costs include

only 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 eachof 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. This calculation will automatically occur within the Cost Reporting System once data elements are p g yentered.

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Reporting Allowable Transportation Costs• When reporting transportation payroll information, transportation other

costs, and transportation equipment depreciation, LEAs are required to distinguish whether each costs falls under “Specialized Transportation” or “General Transportation.”

“Specialized Transportation” vs. “General Transportation”• When to report costs as “Specialized Transportation:”

• “Specialized Transportation” is used to report transportation costs for vehicles that have been modified (ramp, lift, etc.) and carry special education students.

For “General Transportation:”• For “General Transportation:”• ”General Transportation” is ONLY used when transportation costs

cannot be discretely identified as “Specialized Transportation.” • Example: A mechanic works on all buses regular education and special

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• Example: A mechanic works on all buses, regular education and special education, or a bus driver drives shared routes.

Reporting Allowable Transportation Costs• Whenever possible, the LEA must report specialized transportation costs

when they are discretely captured and maintained by the LEA within their accounting structure.

• In instances where costs cannot be identified as specialized transportation costs, then these costs can be reported as general transportation costs but the appropriate ratio (Specialized Transportation Vehicle Ratio) will be applied to apportion costs to specialized transportation servicesapplied to apportion costs to specialized transportation services.

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Reporting Allowable Transportation Costs9. Compensation Federal Revenues (for Transportation)

9.G

CompensationCompensation Federal Revenues

$54,045.25


$20,235.33 $74,280.58

10. Unrestricted Indirect CostsI J=H*I

Unrestricted Indirect Cost

Rate

Unrestricted Indirect Costs

56

10.43% $22,235.67

10.43% $9,152.43 $31,388.09


• As LEAs are required to report gross expenditures, expenditures for funds paid from federal funding sources should be appropriately identified

9. Compensation Federal Revenues (for Transportation)

paid from federal funding sources should be appropriately identified. • The cost reporting system will properly calculate the net expenditures based

on costs reported.

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• PCG will pre-populate the LEA indirect cost rate into the Medicaid cost report form


report form.• The UICR is applied to net transportation costs (total costs less amount paid

with federal funds) in order to allow for the proper identification of indirect costs.

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Ratios Used to Apportion Transportation Costs11. Specialized Transportation Vehicle Ratio

11.L

Specialized Transportation Vehicle Ratio

28.57%

100.00%

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Ratios Used to Apportion Transportation Costs11. Specialized Transportation Vehicle Ratio

Specialized Total Number of Specialized VehiclesSpec a edTransportation Vehicle Ratio

=o a u be o Spec a ed e c es

Total Number of Vehicles

• A ‘Specialized Vehicle’ is defined as a physically modified special needs school bus that is designed to transport disabled passengers and is constructed with a special service entrance.

• Examples of physical modifications include installed harnesses, lifts, restraints.a p es o p ys ca od ca o s c ude s a ed a esses, s, es a s• This ratio is required for all LEAs who report general transportation service

costs. • Both numerator and denominator are populated by the LEA.

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Ratios Used to Apportion Transportation Costs

• The Specialized Transportation Vehicle Ratio shows how many vehicles ere sed for the transportation of special ed cation st dents in

11. Specialized Transportation Vehicle Ratio

were used for the transportation of special education students in comparison to all vehicles used by the LEA.

• The Specialized Transportation Vehicle Ratio is required if the LEA reported transportation costs that cannot be discretely broken out for modified busestransportation costs that cannot be discretely broken out for modified buses only (i.e., “only specialized”).

• The specialized transportation vehicle ratio is only applied to those costs identified as “general transportation.”

• For example, costs that were used to pay for fuel for both modified and general buses could be reported as “general.” Then, the costs are applied to this ratio to calculate Medicaid allowable special education costs.

• Please refer to Specialized Transportation Cost Calculation Handout.

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Example of Specialized Transportation Vehicle Calculation:

11. Specialized Transportation Vehicle Ratio

• If an LEA has a fleet of 8 buses and two of those have been specially adapted to carry special education students (with transportation prescribed in their IEP). The Vehicle Ratio would then be 2/8, or 25%.

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Ratios Used to Apportion Transportation Costs12. Specialized Transportation Trip Ratio

12.M

Specialized Transportation

Trip Ratio

25.55%

25.55%

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Ratios Used to Apportion Transportation Costs12. Specialized Transportation Trip Ratio

Total number of paid one-way trips for Medicaid eligible Specialized

TransportationTrip Ratio

=

o a u be o pa d o e ay ps o ed ca d e g b estudents requiring specialized transportation services

Total number of one-way trips for all students requiring specialized transportation services

• The Specialized Transportation Trip Ratio is required for costs associated with both “specialized transportation” and “general transportation.”

• Please refer back to Specialized Transportation Cost Calculation Handout

specialized transportation services

• Please refer back to Specialized Transportation Cost Calculation Handout• The denominator will be populated by the LEA and the numerator will be

populated by PCG.

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• LEAs will report the total number of one-way trips provided for all special education students requiring specialized transportation services during the

12. Specialized Transportation Trip Ratio

education students requiring specialized transportation services during the cost reporting period.

• Trip count includes all trips for students riding “specialized" vehicles for the fiscal year. T i f i l d ti t d t idi b t ti l• Trips for special education students riding on buses transporting general education students should not be included in this count.

• LEAs will report this count on the annual Medicaid cost report.• Medicaid count of trips will be calculated by PCG based on paid claims dataMedicaid count of trips will be calculated by PCG based on paid claims data

(numerator).• Bus logs must be kept and stored by LEAs in order to support reported

number of one-way trips, in the event of an audit /review.

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Example of Specialized Transportation Trip Ratio Calculation:

12. Specialized Transportation Trip Ratio

• If an LEA reports 15,000 one-way trips for all students with IEPs requiring specialized transportation services, and PCG calculates that 6,000 were paid one-way trips for Medicaid eligible students; the ratio would be 6,000/15,000, or 40%.6,000/15,000, or 40%.

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Calculating Specialized Transportation M di id All bl C tMedicaid Allowable Costs

13. Specialized Transportation Medicaid Allowable Costs

13.N=K*L*M

Specialized Transportation p

Medicaid Allowable Costs

$17,185.18

$24,758.82 $41,944.00

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Calculating Specialized Transportation Medicaid Allowable CostsMedicaid Allowable Costs

S i li d d l t t ti t t d i th C t R ti

13. Specialized Transportation Medicaid Allowable Costs

• Specialized and general transportation costs entered in the Cost Reporting System by the LEA and UICR will be apportioned by the specialized transportation trip ratio to calculate the Medicaid allowable costs.

• All general transportation costs will be reduced by the specialized vehicle g p y pratio.

• As a reminder, the specialized transportation vehicle ratio is only used when “general transportation” costs are reported.

• The identified transportation Medicaid allowable costs on the cost report willThe identified transportation Medicaid allowable costs on the cost report will be used to determine the cost settlement, in addition to the direct service Medicaid allowable costs.

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Specialized Specialized Trans

Specialized Vehicle Ratio: 2/20 = 10%Specialized Transportation Trip Ratio: 4,000/20,000 = 20%

Total Transportation Payroll Costs:Bus Drivers

Mechanics

h

Specialized vs. General:$20,000 Specialized

$100,000 General

Vehicle Ratio:

x 10%

Trip Ratio: x 20%

x 20%

Costs: $4,000

$2,000

Mechanic Assistants

Operations‐Related Costs:Contracted – Trans Svcs

$0 Specialized

$50,000 General x 10%

x 20%

x 20%

$0

$1,000

Contracted – Trans equip

Lease/Rental

Insurance

$50,000 Specialized

$100,000 General x 10%

x 20%

x 20%

$10,000

$2,000Insurance

Maintenance and RepairsFuel and OilEquipment Depreciation:Buses, cars, minivans

$5,000 Specialized

$10 000 General x 10%

x 20%

x 20%

$1,000

$200$10,000 General x 10%

*Applied to General Costs

x 20%

*Applied to AllTrans Costs

$200

$20,200 Total Reimbursable

Cost Settlement Calc lationCost Settlement Calculation

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Cost Settlement Calculation14. Cost Settlement Summary

A B C D E F=B*C-D, If E=YesF $0 If E N

14. Cost Settlement Summary

Total Computable Direct Service and Specialized Transportation Medicaid Allowable Costs

A B C D EF=$0, If E=No

Service Type

Total Direct Service and Transportation Medicaid Allowable

Costs FMAP15. Medicaid

Interim PaymentsInclude in Cost

Settlement?Cost Settlement

Amount**y yAudiology Services $58,244.88 67.30% $26,745.81 Yes $12,453.00 Behavioral Health Services $29,451.39 67.30% $15,637.78 Yes $4,183.00 Nursing Services $145,443.60 67.30% $92,457.90 Yes $5,425.64 Occupational Services $96,120.67 67.30% $58,964.32 Yes $5,724.89 Personal Care Services $24,686.48 67.30% $28,567.40 Yes ($11,953.40)Physical Therapy Services $146,448.85 67.30% $0.00 No $0.00 y py $ , $ $Specialized Transportation Services $41,944.00 67.30% $36,789.10 Yes ($8,560.79)Speech Language Pathology Services $240,058.28 67.30% $146,345.25 Yes $15,213.97 Total Medicaid Costs $782,398.15 $405,507.56 $22,486.32

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Cost Settlement Calculation

• Direct Service Medicaid Allowable Costs (6) and Specialized


• Direct Service Medicaid Allowable Costs (6) and Specialized Transportation Medicaid Allowable Costs (13) are aggregated to the Total Direct Service and Transportation Medicaid Allowable Costs.• These costs represent the actual cost of delivering direct medical and p g

transportation services to special education students.

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• In order to optimize reimbursement in cost settlement it is important for


• In order to optimize reimbursement in cost settlement, it is important for LEAs to carefully examine all direct medical services and transportation costs reported to ensure all costs have been included in the cost report.

• Most common unreported costs include:p• Direct medical and personal care provider salaries (due to appropriate staff not

being included in the quarterly RMTS staff pool list).• Transportation: payroll, purchased professional services, other costs,

depreciationdepreciation.

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Cost Settlement Calculation15. Medicaid Interim Payments

D

15. Medicaid Interim Payments

$26,745.81 $15,637.78 $92,457.90 $58,964.32 $28,567.40

$0.00

$36,789.10

$146,345.25 $405,507.56

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,


• LEAs are required to continue with the Direct Service Claiming (DSC) doc mentation and claiming processesdocumentation and claiming processes.

• LEAs will still receive interim payments on approved claims.• Interim claiming will remain a critical component in the direct service

reimbursement process.reimbursement process. • LEAs should only submit direct service claims for participants included in the

quarterly time study.• Any staff who are 100% federally funded should not be included in time

study and should not bill for servicesstudy and should not bill for services.

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• LEAs must continue to bill for direct services throughout the year and are required to do the following to meet program compliance requirements:required to do the following to meet program compliance requirements:

• Qualified providers must be registered with AHCCCS• Qualified providers must deliver services to students• LEAs must maintain all proper documentation

• AHCCCS 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 didFor 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 th h ld t bli h d b d i ’ ti it

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thresholds established based on prior year’s activity.


• LEA specific cost settlement calculation will take the LEA’s actual costs of idi M di id d h lth l t d i d th t


providing Medicaid-covered health related services and compare them to Medicaid reimbursement (interim payments) received.

• If the LEA’s costs exceed reimbursement received, the LEA will receive a ttl tsettlement.

• If the LEA’s costs are less than reimbursement received, the LEA will pay back the difference.

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Cost Settlement Example1. If Medicaid costs exceed reimbursement received, LEAs will receive a

settlement.

Cost Settlement Test LEA1Medicaid Cost for Direct Medical Services and Transportation $510,000Federal Share at 67.30%(F d l Sh b d FMAP R t bli h d b th US D t t f H lth

67.30%(Federal Share based on FMAP Rates published by the US Department of Health and Human Services)

Federal Share Amount $343,230Medicaid Interim Payments Received for Direct Medical and $300,000Transportation ServicesPayment Due to LEA (Federal Share Only) $43,230

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Cost Settlement Example2. If Medicaid costs are less than reimbursement received, LEAs will pay

back the difference.

Cost Settlement Test LEA2Medicaid Cost for Direct Medical Services and Transportation $450,000Federal Share at 67.30%(F d l Sh b d FMAP R t bli h d b th US D t t f H lth

67.30%(Federal Share based on FMAP Rates published by the US Department of Health and Human Services)

Federal Share Amount $302,850Medicaid Interim Payments Received for Direct Medical and $340,000Transportation ServicesPayment Due from LEA (Federal Share Only) ($37,150)

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• After an LEA certifies the cost settlement amount, AHCCCS will process t t f th LEA


payment or recoupment from the LEA.

• If payment is due to the LEA, the LEA will receive a payment for the amount due.

• If payment is owed to AHCCCS, the LEA will be required to refund the amount due.

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Cost Settlement Calculation• LEAs have the ability to take a conservative approach to billing while still

maintaining the same level of claiming.• One way to minimize the risk of interim payments exceeding allowable annualOne way to minimize the risk of interim payments exceeding allowable annual

costs is to reduce billed rates of submitted claims.• LEAs can submit claims using a lower billed rate than the rates in the AHCCCS

Fee Schedule (e.g. $22.77 rather than $44.54 for an individual speech service).Th AHCCCS F S h d l t th i t AHCCCS ill i b• The AHCCCS Fee Schedule represents the maximum amount AHCCCS will reimburse for each service.

• If using a billing vendor, the LEA must coordinate and communicate desired billing rate(s).

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Timeline of E entsTimeline of Events

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Sep 2012

Oct 2012

Nov 2012

Dec 2012

Jan 2013

Feb 2013

Mar 2013

Apr2013

May 2013

Jun 2013

July 2013

Aug 2013

6/1/12 LEAs must submit SpEdstudent and related service lists

6/30/12 School year ends and RMTS is complete

9/17 9/21/12 Mandatory MCRCS9/17-9/21/12 Mandatory MCRCS cost reporting training

10/1/12 Opening of annual Medicaid Cost Reporting to LEAsLEAs

12/1/12 Cost report finalized and submitted by LEAs

PCG reviews cost reports and pconducts follow up and desk reviews with LEAs (thru 6/30/13)

7/31/13 Completion of processing FY12 claims

8/31/13 Completion of FY2012 Medicaid cost settlement

Timeline of Events• Although cost settlements will not be completed until 8/31/2013, it is

important for LEAs to keep track of the important requirements and deadlines that will occur within the next yeardeadlines that will occur within the next year.

• LEAs need to be cognizant of events surrounding provision of materials, trainings, cost reporting, and cost settlement, and adhere to AHCCCS and CMS mandated deadlines and requirements.

• The timeline outlined for FY2012 cost settlement represents the standard timeline for all fiscal years.

All M di id t t ill th i f ll fi l di t• All Medicaid cost reports will cover the previous full fiscal year corresponding to the state fiscal year - July 1 through June 30.

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Preparing No for Ann al Cost ReportingPreparing Now for Annual Cost Reporting

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Preparing Now for Annual Cost Reporting1. Verify RMTS staff pool list;2. Review current use of federal funding for direct medical staff;3 R i t t ti i t3. Review transportation service costs;4. Coordinate interdepartmental discussions regarding the school-based

Medicaid program; and5 Participate in Medicaid Cost Reporting and Claiming System training5. Participate in Medicaid Cost Reporting and Claiming System training.

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Preparing Now for Annual Cost Reporting1. Ensure all direct medical staff are included in the RMTS staff pool list in

order to optimize the reporting of allowable costs.A i d ll t ff i l d d i RMTS t b th t l t ff l li t• As a reminder, all staff included in RMTS must be on the quarterly staff pool list

• All DSC providers billing for Medicaid reimbursement must be included in the quarterly RMTS and staff pool list.

• LEA should only include health aide staff that provide ADL services as prescribed in the IEPIEP.

• Providers previously included in the DSC staff pool list that DO NOT provide direct services nor bill for Medicaid reimbursement should be removed from the direct service staff pool list (e.g., certain psychologists, guidance counselors).

• Staff who are providing only non-IEP or educational services should not be included in the direct service or personal care staff pool list.

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Preparing Now for Annual Cost Reporting2. Review current use of federal funding for direct medical staff and determine

if additional state and local funds can be leveraged to pay for direct medical servicesservices.

• It is critical that LEAs review their current funding levels and evaluate funding sources used to pay for direct medical services.

• Costs incurred from federal funding sources will be deducted from the cost settlement process.

• If direct medical service providers are paid with federal funding sources (ADE Chart of Accounts fund codes 100-399, with the exception of 290) LEAs need to determine if state and local funds can be leveraged alternatively to pay for these g y p ystaff.

• If alternative state and local funding sources cannot be leveraged for staff who are currently fully federally funded, the LEA should stop claiming for services provided by these staff

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provided by these staff.

Preparing Now for Annual Cost Reporting3. Review transportation service costs.

• Begin to determine whether specialized transportation costs can be discretely identified or whether costs will need to be reported as general transportationidentified or whether costs will need to be reported as general transportation services costs.

• It is important for LEAs to accurately identify transportation related costs as either “general” and “specialized” transportation.

• As a reminder costs can not be reported as both “general” and “specialized,” therefore it is important to discretely identify which costs should be contained in each category.

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Preparing Now for Annual Cost Reporting4. Coordinate interdepartmental discussions regarding coordination for the

school-based Medicaid program.I t d t t l i ti i iti l t th f th• Interdepartmental communication is critical to the success of the program.

• Departments within the LEA that must work together to properly administer this program include:

• Finance/Business Office• Human Resources• Transportation • Special Education

• Identify and communicate with the proper individuals within your LEA who are:

• Maintaining RMTS staff pool lists• Overseeing the quarterly time studyOverseeing the quarterly time study• Completing quarterly and annual cost reporting• Working in compliance or audit support 90

Preparing Now for Annual Cost Reporting5. Participate in Medicaid Cost Reporting and Claiming System training.

• PCG will hold trainings the week of September 17 – September 21, 2012.Th t i i ill id th h d t ti f th C t R ti• These trainings will provides a thorough demonstration of the Cost Reporting System and review of cost reporting requirements.

• Due to the utmost importance of the material covered during these sessions, attendance is mandatory.

• LEAs choosing not to participate in a training will not be granted access to their annual Medicaid cost report for FY2012.

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Preparing Now for Annual Cost Reporting1. Verify RMTS staff pool list;2. Review current use of federal funding for direct medical staff;3 R i t t ti i t3. Review transportation service costs;4. Coordinate inter-departmental discussions regarding the school-based

Medicaid program; and5 Participate in Medicaid Cost Reporting and Claiming System training5. Participate in Medicaid Cost Reporting and Claiming System training.

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Contacts• Help Desk Toll-free Number: 877-877-8011

• RMTS Questions: [email protected]

• Cost Reporting Questions: azcostreport@pcgus com• Cost Reporting Questions: [email protected]

• AZ School Based Claiming Web-site: https://web pcgus com/azschools• AZ School Based Claiming Web-site: https://web.pcgus.com/azschools

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Questions?

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