HBS Topics of the Week

Probably the single most important issue currently with the Ohio Medicaid School Program is audits.  I talked briefly about this issue several weeks ago, but this issue is so important that is deserves further explanation.  There are four main types of audits currently being done right now with MSP.

AUP Audits – Annual “Agreed Upon Procedures” audits done by CPA firms.
ODM Desk Audits – Cost Report review done prior to issuing “MSP Final Settlement Payments”.
OAS Audits – Random Program Audits being done by the Ohio Auditor of State.
CMS PERM Audits – Random Claim Audits being done by the “Centers for Medicaid and Medicare Services”.

Agreed Upon Procedures (CPA) Audits – There have been changes made to the AUP Audit for each of the next three years (13/14, 14/15, and 15/16).  I would also expect more changes to be made based on the AOS audits.

Ohio Department of Medicaid Desk Audits – The Ohio Department of Medicaid is expecting Interim Claiming to increase.  Low Interim Claiming and high Final Settlements will result in more scrutiny during the desk review process.  This additional scrutiny will slow the settlement process down for all districts.  Adjudication letters for the 11/12 Final Settlements should be coming out soon.

Ohio Auditor of State Audits – These audits were ordered by the Ohio Department of Medicaid and they are not going well.  I would expect that these audits of 10 random districts will be expanded to include more school districts.  Findings in this audit will result in additional testing being added to the AUP Audit.

CMS Perm Audits – These audits test all paid claims for a specific student.  Findings under these audits could result in a full CMS Audit of the entire district.

The two main areas tested in an MSP Audit are Paid Claims and Costs.

Paid Claim testing include:

• Were all the required elements documented by the therapist?
• Were the services properly listed on an IEP?
• Was a proper ETR completed for the student?
• Was the student present on the day of service?
• Did the providing therapist have the proper credentials?
• Was signed Parental Consent obtained for the student?
• Was proper progress documented for the student?
• Was proper supervision documented for therapy assistants?

Testing of Costs include:

• Were MSP Procurement requirements met?
• Was the service paid with non-Federal Funds?
• Is there proper invoices supporting the Costs?
• Were the Costs paid in the proper period? (Cash Basis)
• Were employed therapists properly reported on RMTS?
• Did the therapist provide service to IEP students? (Nursing)
• Were the Costs allowed per MSP rules? (Salary, Benefits, Contracted Therapy Costs)

Audit Findings – Many of the current MSP audit findings are a result of IDEA compliance issues.  The majority of the current audit findings relate to:

• The IEP was not signed by the Related Services Therapist.
• The Related Service Therapist did not have a criminal records check.
• The OTA/PTA did not have proper supervision.
• Services billed were not listed on the IEP.
• Student was absent on the service date.
• IEP or Attendance Records were unavailable.
• Improper procurement of contracted services.

As more audits are completed, I will provide updates on additional findings.  Contract Procurement, also an important MSP issue, will be covered in a future “MSP Topic of the Week”.

In closing, please remember that if your district goes through any MSP audit, contact your billing agent so that they can assist you with the process.

Each school year, the Ohio Department of Medicaid (ODM) computes the Medicaid Eligibility Rate (MER) for each school district that is participating in the Medicaid School Program. This computation is made by submitting October Student Enrollment Data in a very specific file format to ODM. This data is usually obtained from your ITC or your EMIS Coordinator. ODM then computes two percentages that are used in the MSP Cost Report. The two percentages are “Total Percent of All Students that have Medicaid Insurance” and “Total Percent of IEP Students that have Medicaid Insurance”. The original due date for the 2014/15 data submission was 11/02/2015, but ODE has acknowledged that more time may be needed to collect the data and get it in the correct format. You will still want to get this data to your billing agent as soon as possible.

In prior years, the IEP MER was computed by taking your Total Number of IEP Students with Medicaid Insurance and divide it by Total Number of IEP Students.

Example: 55 IEP Medicaid Students divided by 100 IEP Students = 55% MER

Beginning with the 2014/15 school year, IEP MER will be computed by taking your Total Number of Students with a Paid Interim Claim divided by Total Number of Related Service IEP Students.

Example: 30 Paid Claim Students divided by 60 RS IEP Students = 50% MER

Since the new computation numerator is based on Paid Claims, we must remove from the denominator the students that do not receive MSP reimbursable services.

Initially, we are only asking districts to submit the normal “October Student Count Data”. Once all MER data has been collected, we will be sending each district a list of IEP students (based on the student count data submitted), and will be asking you to identify those students that have a Related Service listed in their IEP.

The MER for the IEP Student Enrollment is usually as much as 15% greater than the MER for All Student Enrollment. We expect that the MER for Related Service IEP Students will be as much as 15% greater than the MER of All IEP Students, but to fully maximize MER, all therapists must be documenting services and all MSP Parental Consent Forms must be obtained. Keep in mind, the larger the MER, the greater Medicaid reimbursement.

The Ohio Medicaid School Program is subject to various types of audits, with each one being somewhat different in scope and nature. The various audits also differ in the severity of the penalty assessed for audit findings. One type of audit may penalize you for just a single claim, while other types of audits extrapolate their finding and spread the penalty over multiple periods.

If and when your district is going through any type of Medicaid audit, please inform your billing vendor, so that they can assist you with gathering the required information, review information before it is given to auditors, and assist in interpreting the MSP rules.

Below is a description of various types of audits affecting the Ohio Medicaid School Program.

• Agreed Upon Procedure (AUP) Audit – This is the annual audit that each MSP participating district must have performed by a CPA. This audit verifies costs reported on the Cost Report and also tests Paid Claims. Cost findings result in a cost adjustment, and claim errors result in a payback of only the individual claim amount received. The cost of this audit is a reimbursable expense on the Cost Report and is reimbursed at 50%.
• Ohio Department of Medicaid (ODM) Desk Audit – The final Cost Report, along with the AUP Audit is filed with ODM and they review the Cost Report for reasonableness and outliers. Outlier Districts may be asked to submit additional data to support the Cost Report. After final adjustments are made, ODM computes each district’s Final Cost Settlement amount and adjudicates the order.
• Ohio Auditor of State (OAS) Compliance Audit – There are around eight school districts that are currently undergoing an OAS audit, and two school districts with completed OAS audits. While these audits are somewhat similar to the AUP audits, the penalty for audit findings are much more costly. Any audit findings under this audit are extrapolated over the entire audit period.
• Office of the Inspector General (OIG) Audit – OIG’s Director of Medicaid audits did a 1 ½ hour presentation at the NAME Conference on the states that are currently going through an OIG audit. The Ohio Medicaid School Program is now in its seventh year, so chances are high that OIG will be visiting our state soon. Their audit findings are also extrapolated and can be costly.
• Centers for Medicaid and Medicare Service (CMS) Audit – Any Medicaid School Program expansion would require Ohio to open up its State Plan Amendment (SPA), which would certainly trigger a CMS audit of the entire program. That is why the timing of any program expansion is important, as we must get our program in order before CMS starts their audit.
• CMS Claim Review – Periodically, CMS will want to review documentation related to an individual student. This type of audit reviews a specific date range of billed services on a particular student, and traces the service back to the IEP and ETR.

Below is a sample of common audit findings related to the Ohio Medicaid School Program.

IEP not signed by the therapist that recommended the service.

• Services documented on days that the school attendance records show the student was absent.
• Services documented were not properly listed on the student’s IEP.
• OTA or PTA not properly supervised by the OT or PT.
• Criminal Records Check not completed on a therapist.
• Therapist was not included in the Random Moment Time Study (RMTS).
• Therapist costs were paid using Federal Funds. (IDEA Title VI-B)

Once again, if you are selected for any type of MSP audit, make sure that your billing vendor is aware of the audit so that they can assist you.