RMTS and Cost-Based Rate Methodologies April 23, 2015
Agenda Welcome Introductions How We Will Handle Questions Reminder Regarding NAME Annual Survey Results 2
Session Objective This session will provide NAME members an overview of the most common cost based rates methodologies currently operating for school-based services programs across the country, with a specific focus on the important role that random moment time study often plays. Differences in methodologies and impact on providers, reimbursement, and procedures will be discussed, as well as RMTS best practices to support optimization of your school-based services program. 3
Evolution of School Based Cost Settlement 4
School Based Reimbursement - Today 5
Goals of Cost Based Reimbursement 6
What are the current CMS approved cost settlement methodologies? 7
How does RMTS facilitate a Cost Settlement Methodology? 8
How are Medicaid costs apportioned? 9
Specialized Transportation Costs 10
The End Result 11
Key Cost Settlement Factors Costs for All Direct Service Staff on Roster Percent of Time Spent on Direct Service - RMTS % Percent of Time with Medicaid Students - Medicaid IEP % Medicaid Allowable Cost - FMAP
How Annual Cost Settlement is Calculated Example #1 Example #2 Allowable Annual Expenditures (A) $ 2,000,000 $ 2,000,000 Unrestricted Indirect Cost Rate (B) 10% 15% Total Allowable Costs (C) = A + (A X B) $ 2,200,000 $ 2,300,000 Direct Service RMTS Percentage (D) 40% 30% Medicaid IEP Ratio (E) 45% 40% FMAP (F) 55% 55% Total Allowable Costs (G) = C X D X E X F $ 217,800 $ 151,800 Total Interim Payments Received (Net FMAP) $ 175,000 $ 175,000 Net Due the District / (To Be Recouped) $ 42,800 $ (23,200) 13
Existing States with Approved Cost Settlement Methodologies 14
How is RMTS used in the cost settlement process? A key factor in cost settlement is the allocation of the amount of time staff spend on Medicaid-covered services RMTS provides a statistically valid method for determining how staff time is allocated Most states have modified their RMTS process so a single time study can be conducted to capture time spent delivering Medicaid-covered services as well as Medicaid Administrative Claim (MAC) reimbursable activities 15
What is RMTS? RMTS = Random Moment Time Study (or Sample) In this method, random 1 minute increments of time are sampled across an entire quarter (3 months) The sample universe (pool of time and staff from which moments are selected) is based on staff rosters and calendars submitted by participating districts/LEAs/agencies All work days are typically included in the sample universe Sampling is done “with replacement” Once a moment in time is selected and paired with a participant, both that moment and participant go back “into the hat” and could be picked again Staff may receive multiple moments in a quarter or some staff may not receive any moments 16
Variations in RMTS Methodologies Statistical Validity Thresholds Most states are now required to meet a 95% confidence level with an error rate of +/-2% - 2,401 valid moments per cost pool required The 2003 CMS Guide and some states still operate under a 95% confidence level with an error rate of +/- 5% - 385 valid moments per cost pool required Number of Cost Pools A cost pool is a grouping of staff for sampling purposes Most states use 2 Cost Pools Direct Service Providers – Staff eligible to bill for Medicaid-covered direct services Administrative Providers – Staff who are not eligible to bill for direct services, but who participate in allowable activities under the MAC Program Other variations 3 Cost Pools – Example: Admin Pool + 2 Distinct Pools of Direct Service Providers 4 Cost Pools - Example: Admin Pool + Direct Service Pool + Personal Care Pool + TCM Pool Others 17
Variations in RMTS Methodologies Moment Notification Timelines The majority of approved programs allow staff to be notified up to 5 calendar days prior to the sampled moment States now seeking approval of programs have been required to eliminate any prior moment notification; participant receives notification of moment exactly at the time the moment occurs Moment Response Time Requirements Much variation state to state in definition of “timely moment completion” Moments are “due” a certain number of days after the moment occurs Moments submitted after deadline are invalid States now seeking approval of programs have been required to only allow the participant 2 business (school) days after the moment to complete the documentation of the moment 18
Variations in RMTS Methodologies Moment Completion Process Most states have participants complete moments on-line Easily confirms date and time of moment submission Allows for enforcement of completion requirements Allows for electronic signature compliance Some states allow some staff to complete moments on paper Requires quality assurance review of returned moments Timelines for completion usually shortened to allow for receipt of documentation Additional document retention and verification requirements Centralized Coding Many states have moved to a Centralized Coding methodology in which the sampled participant answers a series of questions, but DOES NOT select an activity code describing their time Centralized staff review the narrative response and assign to the moment an activity code which results in more consistent coding 19
Drivers of RMTS Staff Pool List Staff can only be claimed for reimbursement if they were listed on the quarterly participant roster* Important to include all staff billing for direct medical services Including staff who do not regularly perform these billable activities could lower the reimbursement percentage/allowable cost base Scenario #1 Scenario #2 Amount of Allowable Costs (A) $1,000,000 $750,000 Direct Service RMTS Percentage % (B) 30% 45% Medicaid IEP Ratio ( C ) 40% 40% FMAP (D) 55% 55% Net Claim Amount (A X B X C X D) $66,000 $74,250 * Some programs allow for the claiming of direct replacements for staff who have left the district 20
Drivers of RMTS Impact of Federal Funds Staff who are 100% federally funded should not be included on the staff pool list Federal reimbursement not available on cost base of federal funding Related note: Staff who are 100% federally funded should not bill for direct medical services No allowable costs would be eligible to be included in the cost settlement calculation; reimbursement would have been received for those services; district would be in a deficit situation at that start of the cost settlement process In order to avoid risk, some districts adjust distribution of federal funds across various staff groups as allowed within the rules of funding sources Contractors and Billing Some districts include contracted staff on their staff pool list as they also bill for their direct services Contracted staff on the staff pool list may get selected for a moment and would be required to complete that moment or it could affect compliance Some districts have been hesitant to include contracted staff because of RMTS compliance issues Some states allow for an alternative methodology for including contracted staff 21
Drivers of RMTS and Methodology (cont’d) Private Facilities Some districts include private facility staff on their staff pool list since they also bill for their direct services Private facility staff on the staff pool list may get selected for a moment and would be required to complete that moment or it could affect compliance Some districts have been hesitant to include private facility staff because of RMTS compliance issues They often change and the district is not notified of staff changes Less ability to compel to complete a moment because they work directly for the private facility and not the district Some states allow an alternative method for including Private Facility Staff Tracking of Replacements CMS has increased compliance requirements around RMTS Districts need to track replacements of staff that change during a quarter to ensure that sampled moments get completed in the required time frames Decreased response times increase this urgency for staff responsible for tracking and notifying replacements and routing an sampled moments 22
Best Practices / Lessons Learned STAFF POOL LIST: Make sure the appropriate staff are listed on the staff pool list Utilize detailed work schedules for staff on roster to better ensure moments selected represent work time Closely manage staff roster and communicate direct replacements RMTS: Continuously training all RMTS participants regarding level of detail needed on responses Train program stakeholders regularly in terms of program intent and requirements Include escalation (to supervisor) on notification of non-compliant staff Give LEA coordinators real-time, direct access to detailed RMTS compliance data 23
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