1. Pennsylvania Medicaid School Based Claiming
Public Consulting Group
4/12/2017
Pennsylvania Medicaid School Based Claiming
SBAP Annual Cost Report Training
September/October 2013

2. PCG Education
Comprehensive Cost Report Training
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
Timeline of Events
Contacts
Questions

3. Goals The purpose of this training is to help LEAs:
PCG Education
Comprehensive Cost Report Training
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.

4. Programmatic Changes to the School Based Access Program (SBAP)
PCG Education
Comprehensive Cost Report Training
Programmatic Changes to the School Based Access Program (SBAP)

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

6. Programmatic Changes to SBAP
PCG Education
Comprehensive Cost Report Training
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.

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

8. Programmatic Changes to SBAP
PCG Education
Comprehensive Cost Report Training
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

9. Roles and Responsibilities
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Comprehensive Cost Report Training
Roles and Responsibilities

10. Roles and Responsibilities
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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 ne 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

11. Roles and Responsibilities
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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.

12. SBAP Annual Medicaid Cost Reporting Requirements
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Comprehensive Cost Report Training
SBAP Annual Medicaid Cost Reporting Requirements

13. SBAP Annual Medicaid Cost Reporting Requirements
PCG Education
Comprehensive Cost Report Training
SBAP Annual Medicaid Cost Reporting Requirements
LEA requirements for participation in SBAP:
Continue submitting direct service claims;
Include direct service staff in the Random Moment Time Study (RMTS);
Report costs for direct service staff on a quarterly and annual basis;
Report costs annually on an accrual basis; and
Include only allowable costs on the cost report.
Note to Presenter – Mention the importance of reporting federal funds correctly.

14. SBAP Annual Medicaid Cost Reporting Requirements
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Comprehensive Cost Report Training
SBAP Annual Medicaid Cost Reporting Requirements
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.
Note to Presenter: Reiterate the important of billing accurately, and mentioning reducing bill rates if concerned of a payback.

15. SBAP Annual Medicaid Cost Reporting Requirements
PCG Education
Comprehensive Cost Report Training
SBAP Annual Medicaid Cost Reporting Requirements
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.

16. SBAP Annual Medicaid Cost Reporting Requirements
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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.

17. SBAP Annual Medicaid Cost Reporting Requirements
PCG Education
Comprehensive Cost Report Training
SBAP Annual Medicaid Cost Reporting Requirements
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.

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

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;
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.

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.

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

22. Direct Service Cost Reporting Process and Requirements

23. Reporting Allowable Direct Service Costs
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Reporting Allowable Direct Service Costs
Direct Service Payroll Information

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; and
Speech, Language and Hearing Services (including audiology and teachers for the hearing impaired)

25. 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. 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. Reporting Allowable Direct Service Costs
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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.
LEAs are required to report gross expenditures as well as identifying expenditures paid from federal funding sources.

28. 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. Reporting Allowable Direct Service Costs
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Reporting Allowable Direct Service Costs
Compensation Federal Revenues

30. Reporting Allowable Direct Service Costs
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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.

31. Reporting Allowable Direct Service Costs
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Reporting Allowable Direct Service Costs
Unrestricted Indirect Costs

32. 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).

33. Reporting Allowable Direct Service Costs
PCG Education
Comprehensive Cost Report Training
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.

34. Direct Medical Services Time Study Percentages
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Direct Medical Services Time Study Percentages
Direct Medical Services Time Study Percentages

35. 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.

36. 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.

37. 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 = $25,176

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

39. 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.
The IEP ratio will be LEA specific and based on student count data.
Specific details on the requirements for the IEP ratio are currently being finalized and will be communicated to the LEAs once finalized.
The IEP ratio will be calculated on an annual basis for use the annual cost report.
This ratio will differ from the Medicaid Eligibility Ratio (MER) used for the quarterly MAC claims.

40. Calculating Direct Service Medicaid Allowable Costs
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Calculating Direct Service Medicaid Allowable Costs
Direct Service Medicaid Allowable Costs

41. Calculating 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.

42. Cost Settlement Calculation
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Cost Settlement Calculation

43. 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.

44. 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.

45. 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.

46. 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.

47. Cost Settlement Example
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 at 54.48%
(Federal Share based on blended FMAP Rates published by the US Department of Health and Human Services)
54.48%
Federal Share Amount
$277,848
Medicaid Interim Payments Received for Direct Medical and Transportation Services
$255,000
Payment Due to LEA (Federal Share Only)
$22,848

48. Cost Settlement Example
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 at 54.48%
(Federal Share based on blended FMAP Rates published by the US Department of Health and Human Services)
54.48%
Federal Share Amount
$245,160
Medicaid Interim Payments Received for Direct Medical and Transportation Services
$255,000
Payment Due from LEA (Federal Share Only)
($9,840)

49. Timeline of Events

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

51. Timeline for Completion
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Timeline of Events
Key Tasks
Timeline for Completion
LEAs complete annual cost reports
8 weeks
Desk reviews completed, including any cost report revisions and re-certifications
12 weeks
Cost settlements calculated
2 weeks
LEAs return signed CPE Certification forms

52. Contacts Help Desk Toll-free Number: 1-866-912-2976
PCG Education
Comprehensive Cost Report Training
Contacts
Help Desk Toll-free Number:
Cost Reporting Questions:

53. Questions?

54. PCG Education
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