Pennsylvania Medicaid School Based Claiming
SBAP Annual Cost Report Training
September/October 2013
www.publicconsultinggroup.com
Agenda
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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
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Goals
The purpose of this training is to help LEAs:
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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.
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Programmatic Changes to the School Based Access
Program (SBAP)
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Programmatic Changes to SBAP
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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).
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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?
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A cost based reimbursement methodology determines the actual cost of
delivering direct medical services to special education students.
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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 SBAP
How will cost based reimbursement impact LEAs?
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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
https://costreporting.pcgus.com/pa.
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.
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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.
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Programmatic Changes to SBAP
Historical Approach to School Based Medicaid Programs
Fee for Service
(FFS)
Medicaid
Administrative
Claiming
(MAC)
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LEA $
LEA $
“Compartmentalized” programs with minimal integration
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Unbalanced LEA participation in both programs
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Some LEAs participated in MAC and FFS or just MAC or FFS
Various compliance issues in both programs
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One reason the Federal government proposed to eliminate MAC
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Programmatic Changes to SBAP
Current Approach to School Based Medicaid
Programs
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Programs now work together
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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
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Submission of annual Medicaid cost reports
required
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Roles and Responsibilities
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Roles and Responsibilities
Role of the LEA
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Participate in the Random Moment Time Study (RMTS)
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Ensure all Medicaid eligible providers are included in the cost report
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Submit a participant list for inclusion in the quarterly RMTS
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
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Desk reviews of the submitted cost reports
Complete Medicaid cost report audits
Process Medicaid cost settlements
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Roles and Responsibilities
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SBAP allows districts to receive reimbursement for the cost of providing PA Medicaid
covered services to Medicaid eligible, special education students.
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Revenue available only when Federal and State Medicaid requirements are met.
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SBAP Annual Medicaid Cost Reporting
Requirements
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SBAP Annual Medicaid Cost Reporting
Requirements
LEA requirements for participation in SBAP:
1. Continue submitting direct service claims;
2. Include direct service staff in the Random Moment Time Study (RMTS);
3. Report costs for direct service staff on a quarterly and annual basis;
4. Report costs annually on an accrual basis; and
5. Include only allowable costs on the cost report.
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SBAP Annual Medicaid Cost Reporting
Requirements
1. LEAs are required to continue with direct service documentation and
claiming processes throughout the year.
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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.
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SBAP Annual Medicaid Cost Reporting
Requirements
2. LEAs must include direct service staff providing health related services to
special education students on the random moment time study (RMTS) staff
pool list.
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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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SBAP Annual Medicaid Cost Reporting
Requirements
3. LEAs are required to report costs for direct service staff on a quarterly and
annual basis.
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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.
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SBAP Annual Medicaid Cost Reporting
Requirements
4. All costs captured on the SBAP Annual Medicaid Cost Report must be
reported on an accrual basis.
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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.
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SBAP Annual Medicaid Cost Reporting
Requirements
4. All costs captured on the SBAP Annual Medicaid Cost Report must be
reported on an accrual basis.
Example of Accrual Based Reporting:
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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.
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SBAP Annual Medicaid Cost Reporting
Requirements
5. Only allowable costs approved by CMS can be reported on the cost report.
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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:
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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) (prepopulated by PCG);
• Random Moment Time Study (RMTS) Direct Medical Service Percentage Results (prepopulated by PCG); and
• Individualized Education Program (IEP) Ratio.
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Please ensure your LEA maintains all documentation to support allowable
costs reported.
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SBAP Annual Medicaid Cost Reporting
Requirements
5. Only allowable costs defined by CMS can be reported on the cost report.
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The CMS-approved cost elements related to transportation include:
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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.
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SBAP Annual Medicaid Cost Reporting
Requirements
In summary,
1. Continue submitting direct service claims;
2. Include direct service staff in the random moment time study (RMTS);
3. Report costs for direct service staff on a quarterly and annual basis;
4. Report costs annually on an accrual basis; and
5. Include only allowable costs on the cost report.
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Direct Service Cost Reporting Process and
Requirements
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Reporting Allowable Direct Service Costs
Direct Service Payroll Information
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Reporting Allowable Direct Service Costs
Direct Service Payroll Information
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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.
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Reimbursable services under the Direct Service program include:
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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)
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Reporting Allowable Direct Service Costs
Direct Service Payroll Information:
Salaries
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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.
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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
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Reporting Allowable Direct Service Costs
Direct Service Payroll Information:
Salaries and Benefits
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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.
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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 nonMedicaid students.
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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.
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Reporting Allowable Direct Service Costs
Compensation Federal Revenues
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Reporting Allowable Direct Service Costs
Compensation Federal Revenues
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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.
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Reporting Allowable Direct Service Costs
Unrestricted Indirect Costs
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Reporting Allowable Direct Service Costs
Unrestricted Indirect Costs
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CMS recognizes that LEAs incur indirect costs for direct service program
administration.
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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).
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Reporting Allowable Direct Service Costs
Unrestricted Indirect Costs
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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.
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Direct Medical Services Time Study
Percentages
Direct Medical Services Time Study Percentages
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Direct Medical Services Time Study
Percentages
Direct Medical Services Time Study Percentages
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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.
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Direct Medical Services Time Study
Percentages
Direct Medical Services Time Study Percentages
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The direct medical service percentage is calculated by PCG from the results
of the quarterly Random Moment Time Study (RMTS).
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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.
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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.
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Direct Medical Services Time Study
Percentages
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 .4196 = $25,176
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Individualized Education Program Ratio
Individualized Education Program (IEP) Ratio
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Individualized Education Program Ratio
Individualized Education Program (IEP) Ratio
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The purpose of the IEP ratio is to allocate direct medical service costs to the
Medicaid program.
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The IEP ratio will be LEA specific and based on student count data.
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It is used to determine Medicaid’s portion of direct medical service costs incurred
by LEAs.
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.
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This ratio will differ from the Medicaid Eligibility Ratio (MER) used for the
quarterly MAC claims.
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Calculating Direct Service Medicaid Allowable
Costs
Direct Service Medicaid Allowable Costs
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Calculating Direct Service Medicaid Allowable
Costs
Direct Service Medicaid Allowable Costs
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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.
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Cost Settlement Calculation
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Cost Settlement Calculation
Cost Settlement Summary
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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:
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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.
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Cost Settlement Calculation
Cost Settlement Summary
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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:
• Qualified providers must deliver services to students
• LEAs must maintain all required documentation
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LEAs will receive interim payments on approved claims.
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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.
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Cost Settlement Calculation
Cost Settlement Summary
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DPW will restrict the cost settlement process to settle only direct
service categories where LEAs billed and received payment.
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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.
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Claiming activity will be monitored throughout the year and compared to
thresholds established based on prior year’s activity.
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Cost Settlement Calculation
Cost Settlement Summary
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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.
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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.
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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.
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Cost Settlement Example
1. If the LEA’s Medicaid costs exceed reimbursement received, the LEA
will receive a settlement.
Cost Settlement
Medicaid Cost for Direct Medical Services and Transportation
Federal Share at 54.48%
Test LEA1
$510,000
54.48%
(Federal Share based on blended FMAP Rates published by the US Department
of Health and Human Services)
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
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Cost Settlement Example
2. If the LEA’s Medicaid costs are less than reimbursement received, the
LEA will pay back the difference to CMS.
Cost Settlement
Medicaid Cost for Direct Medical Services and Transportation
Federal Share at 54.48%
Test LEA2
$450,000
54.48%
(Federal Share based on blended FMAP Rates published by the US Department
of Health and Human Services)
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)
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Timeline of Events
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Timeline of Events
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The timeline outlined for FY13 cost settlement is a unique timeline given the
ongoing implementation of the CPE reimbursement methodology.
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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.
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More detailed dates for the key tasks will be provided when they are available.
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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
2 weeks
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Contacts
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Help Desk Toll-free Number: 1-866-912-2976
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Cost Reporting Questions: SBAPsupport@pcgus.com
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Questions?
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