HBS Topics of the Week

Happy 2016 to everyone. As I stated at the end of 2015, I would like to focus many of my weekly Medicaid School Program (MSP) topics on the MSP Rules. When I make reference to the “MSP Rules”, I am referring to “Chapter 5160-35” of the Ohio Administrative Code (OAC). I have attached a copy of the MSP rules, and they also can be found on our website, or in Law Writer under the following link: http://codes.ohio.gov/oac/5160-35

In December of 2014, the Ohio Department of Medicaid completed its “5 Year Rule Review”, and the effective date of the current MSP rules are 04/01/2015. There are a total of five sections to the rules, and depending on print size, the rules are between 19 and 22 pages long. The five sections to the MSP rules are as follows:

• 5160-35-01 Definitions
  Defines some of the terms that are used in OAC 5160-35.
• 5160-35-02 Qualifications to be a medicaid school program (MSP) provider
  Defines the qualifications and requirements to be a Medicaid School Program provider.
• (There is not a section 5160-35-03)
• 5160-35-04 Reimbursement for services provided by medicaid school program (MSP) providers.
  Sets forth the requirements for Interim Claiming and Cost Reporting.
• 5160-35-05 Services authorized for medicaid coverage that can be provided by medicaid school program (MSP) providers.
  Sets forth the services authorized for Medicaid reimbursement and sets forth the conditions for providing the services.
• 5160-35-06 Other services, medical supplies and equipment authorized for medicaid coverage that can be provided by medicaid school program (MSP) providers.
  Defines additional services authorized for Medicaid coverage and sets forth the conditions for reimbursement.

In the coming weeks, I will be covering various rule requirements in detail, with the goal that each MSP provider school district is aware of all of the program requirements and in compliance with all MSP rules.

I had the opportunity to sit down with the Auditor of State audit team that is performing the random Medicaid audits on various school districts. This is not the annual AUP audits that are done each year by your CPA firm. These are Medicaid audits that the Ohio Department of Medicaid has asked the State Auditor’s Office to conduct. There has been a total of 5 audits completed, and I anticipate many more to come. Of the five audits, there seems to be two consistent audit findings which are in the areas of Criminal Background Checks and Supervision of Occupational Therapy Assistants and Physical Therapy Assistants. I recommend each school district to go back and verify compliance with the following two issues:

1. Ohio Administrative Code 5101:3-35-02 (C) – “An MSP provider shall ensure all employees and contractors who have in-person contact with consumers for the provision of services undergo and successfully complete criminal records checks pursuant to rules adopted under section 5111.032 of the Revised Code.”

For district employed therapists, this is not a problem, but there seems to be issues when it comes to Contracted Therapists. In the above paragraph, the term “shall ensure”, means that you are physically getting a copy of each therapist’s background check. Do not rely on the contracted agency verbally telling you that it was completed. Get a copy and keep it on file.

2. Ohio Administrative Code 5101:3-35-05(B)(1)(ii) – “licensed occupational therapy assistant shall be practicing under the general supervision of a licensed occupational therapist who is employed or contracted by the MSP provider.” This general supervision is also required for physical therapy assistants also.

Ohio Administrative Code 5101:3-35-01(A)(4) – “The supervision requires an interactive process and shall include, but is not limited to, an initial face-to-face client evaluation and periodically thereafter, routine consult with the assistant before the assistant’s initiation of any client treatment plan”.

Simply having the occupational therapist co-sign the service documentation does not constitute “general supervision”. The auditors are wanting to see any type of written documentation that shows that the OT was consulting and evaluating the OTA. I suggest keeping meeting minutes and having the OTA document OT consultation in their student case notes.

There are additional AOS Audits in process, and it is my understanding that these AOS Audits of the Medicaid School Program will be expanded. I warned everyone over a year ago that any talks of program expansion would trigger a State Audit of the program, in preparation for a Federal Audit by CMS (Centers for Medicaid and Medicare Services). My goal is to get everyone compliant and prepared for any audit of their Medicaid program. It is imperative that all districts are complying with all parts of the MSP Rules. Those rules have been renumbered and revised since the current AOS audit period, which is July 1, 2011 – June 30, 2013. The most current MSP rules are AOC 5160-35-01, 5160-35-02, 5160-35-03, 5160-35-05, and 5160-35-06. The MSP rules can also be found on our website at www.TeamHBS.com, under MSP INFO, Current MSP Rules.

Many of the 2016 “MSP Topics of the Week” will focus on compliance with specific MSP rules.

As Ohio school districts try to maximize their Medicaid School Program reimbursement and other federal grant revenue, make sure that you are applying for an ODE Indirect Cost Rate. The Indirect Cost Recovery Proposal (ICRP) can be completed by your district or by your billing vendor. Historically, obtaining an ODE Indirect Cost Rate will increase your overall MSP reimbursement by 15-20 percent.

What is the Indirect Cost Rate?
The Indirect Cost Rate (ICR) allows districts to recover a portion of “fiscal costs associated with the Treasurer and Human Resources departments.” An Indirect Cost Rate (ICR) percentage is calculated based on a financial report that is filed annually with the Ohio Department of Education. This report will generate two rates: a Restricted Rate and an Unrestricted Rate.

Utilization of Indirect Cost Rates
The restricted indirect cost rate can be used for federal grants with supplement not supplant requirements. The unrestricted indirect cost rate can be used on the MSP Cost Report to generate additional reimbursement based on MSP district employed therapists’ costs, which results in additional reimbursement on the MSP Final Settlement.

Medicaid School Cost Report (Exhibit 5a)
Summary of Cost—Direct Medical Services
Allocation %		15%
Job Category	Total Salary (w/benefits)	Indirect Cost Rate
Pool 1	$125,000	$18,750
Total Personnel	$125,000	$18,750

Who Can Submit an ICRP?
Any district is able to submit an indirect cost rate proposal, as any district can use the restricted rate for federal grants with supplement not supplant requirements; however, only districts with district employed therapists will benefit from the unrestricted rate.

Recent Changes

• The Restricted Rate Subsidiary Schedule is intended to calculate the restricted rate based on adjustments to the unrestricted rate. Some costs that are considered indirect for the unrestricted rate are moved from the indirect cost pool to the direct cost pool for the direct rate.
• The Schedule of Subcontracts/Sub-awards for each Department is intended to show ALL major subcontracts/sub-awards within a district by Function Number and Object code. Major sub-awards are generally those that exceed $25,000 in expenditures per year. This schedule is designed to automatically calculate the first $25,000 of each subcontract/sub-award as well as the disallowed portion.
• Schedule B- Unallowed and Excluded Costs should be familiar as it was part of the previous ICRPs. However, all Functions (1100 – 7900) are included rather than 1100 – 4600 as before, and is now by function rather than object. Additionally, it includes Object 446, Other Internal Service Fund Costs, Subcontract payments greater than $25,000, Cost for Central Services, Bad Debts, Fines and Penalties, Contingencies and Entertainment Contributions to other Organizations.
• Lastly, the workbook now includes a Schedule of Paid Leave by Department. This schedule is to identify payments to separating employees for unused leave and whether an employee was a direct or indirect employee in calculating both the restricted and unrestricted rates.

When is the ICRP due?
No deadline has been announced for the Indirect Cost Rate Proposal, although, it would be recommended to have them submitted before March or April to allow time to make revisions should ODE find errors in their review before the end of the school year.This is a complicated report to complete, and I strongly suggest that you have your billing vendor complete this report for you. Should you decide to prepare this on your own, below is a link to ODE’s webpage with all the information associated with the Indirect Cost Rate Proposal, including instructions for completing the workbook, the workbook itself, sample reports, and even helpful tips for completing the proposal. http://education.ohio.gov/Topics/Finance-and-Funding/Grants/Indirect-Recovery-Costs