Financial Readiness Training - Cost Based Reimbursement Methodology - PowerPoint PPT Presentation

Financial Readiness Training - Cost Based Reimbursement Methodology for School-Based Health Services May 2011

May 2011 Page 2 Agenda  Overview of Cost Settlement Methodology  Key Changes  The Chart of Accounts and Federal Funds  Transportation Service Costs  Importance of Inter-Department Coordination  Timeline for School Year 2011-2012 Services  Next Steps

May 2011 Page 3 Overview of Cost Settlement Methodology  Federal Medicaid (CMS) requires that States demonstrate that rates paid for school-based services are no higher than the actual cost of providing medical services.  In order to comply with this requirement, AHCCCS will implement a Medicaid cost reconciliation and settlement process effective for SFY 2012.  So what does that mean for LEAs?  LEAs will go through an annual cost settlement process which will require the submission of a Medicaid cost report.  Actual costs of providing Medicaid-covered health related services will be compared to Medicaid reimbursement received.  If costs exceed reimbursement received, LEA will receive a settlement.  If costs are less than reimbursement received, LEA will payback the difference.

May 2011 Page 4 Overview of Cost Settlement Methodology Federal funds are not eligible costs for cost settlement purposes and LEAs will be required to correctly identify these costs to ensure they are properly excluded from the cost reimbursement process.

May 2011 Page 5 Overview of Cost Settlement Methodology  LEAs continue the DSC billing process and receive interim payments on approved claims.  Interim claiming will remain a critical component in the DSC reimbursement process.  Integrated single time study for MAC claiming and DSC reimbursement.  All LEAs that participate in the DSC program will be required to have direct medical service staff participate in the time study process.  If direct medical staff are mistakenly omitted from the time study, the costs incurred for these staff will not be recognized in the cost settlement process.

May 2011 Page 6 Key Changes  AHCCCS will restrict cost settlement process to settle only service categories where LEAs billed and received payment.  LEAs must continue to bill for direct services throughout the year.  Claiming activity will be monitored throughout the year and compared to thresholds established based on prior year’s activity.  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 annual costs is to reduce billed rates of submitted claims  LEAs can submit claims using a lower billed amount than the rates in the Fee Schedule (e.g. $23.44 rather than $46.88 for an individual speech service)  The Fee Schedule represents the maximum AHCCCS will pay for each service  If using a billing vendor, the LEA must coordinate and communicate desired rate(s)

May 2011 Page 7 The Chart of Accounts and Federal Funds  Only those costs identified within the approved chart of accounts are eligible for cost settlement.  PCG will be providing additional training on this issue but the reporting requirements are based upon the ADE defined expenditure reporting requirements.  Staff who are 100% federally funded should not be included in RMTS and should not bill for services.  Costs for staff who are inadvertently included on the RMTS staff pool list will be unallowable.  Only non-federal funds can be included in the calculation of Medicaid cost, costs paid with federal funds will be excluded from the cost settlement process.

May 2011 Page 8 The Chart of Accounts and Federal Funds  It is critical that LEAs examine their current funding levels and evaluate funding sources used to pay for direct medical services.  Costs incurred from federal funding sources will be removed from the cost settlement process.  If direct medical service providers are paid with federal funding sources (AZDE Chart of Accounts fund codes 100-399, except fund code 290) LEAs need to determine if state and local funds can be leveraged alternatively to pay for these staff.  LEAs should examine each direct medical service provider and understand the current funding sources used to pay for these employees/contractors.  If alternative state and local funding sources cannot be leveraged for staff that are currently fully federally funded the LEA should potentially stop interim claiming for services provided by these staff.

May 2011 Page 9 Transportation Service Costs  Transportation service costs will be collected annually during the completion of the Medicaid cost report.  Eligible costs include:  Salary and benefits for bus drivers and mechanics;  Depreciation costs of buses;  Fuel and oil costs;  Maintenance and repair costs;  Insurance costs; and  Contract costs.  LEAs will need to determine whether costs can be discretely identified as specialized transportation costs versus general transportation costs.

May 2011 Page 10 Importance of Inter-Department Coordination  LEAs must actively work collaboratively with the finance/business office, human resources, and transportation departments to properly administer this program AND help prevent a payback settlement situation. Issue: Finance and special education do not identify federally funded direct service claiming staff prior to the RMTS staff roster update. Actions: 1. Federally funded staff continue to claim Medicaid for services and thus LEA is receiving interim payments on services. 2. Federally funded staff are included in the RMTS however, their costs cannot be included for the quarterly MAC claim OR annual cost settlement. Result: LEA has received interim payments all fiscal year for services provided by a federally funded staff which may result in a negative settlement; the LEA must pay back Medicaid for overpayment.

May 2011 Page 11 Timeline for School Year 2011-2012 Services Se p Oc t Nov De c Ja n F e b Ma r Apr Ma y Jun July Aug 2012 2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 6/30/12 School year ends and RMTS is complete 10/1/12 Opening of annual Medicaid Cost Reporting to LEAs 12/1/12 Cost report finalized and submitted by LEAs PCG reviews cost reports and conducts follow up and desk reviews with LEAs (thru 6/30/13) 7/31/13 Calculate and revise LEA interim payment rates 7/31/13 Completion of processing FY12 claims 8/31/13 Completion of Medicaid cost settlement

May 2011 Page 12 Next Steps  Ensure all direct medical staff are included within the RMTS staff pool list in order to maximize the reporting of allowable Medicaid costs.  Examine 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 services.  Examine transportation service costs.  Begin to determine whether specialized transportation costs can be discretely identified or whether costs will need to be reported as general transportation services costs.  Start paving the way for success and begin inter-departmental discussions regarding coordination for the school-based Medicaid program.