The Center for Health Care Financing
MassHealth
and
The Center for Health Care Financing
Municipal Medicaid Program
Claiming Manual
for
School-Based
Administrative Activities
July 1, 2005
Table of Contents
Section Page
I. Introduction 3
II. Terms and Definitions 5
III. How to Complete the Claim
1. Sources of Data 7
2. Calculating the Claim 13
IV. Claim Submission Requirements 15
Sample- Quarterly Claim Certification 16
Sample- Quarterly Claim Calculation Summary 17
Sample- Quarterly Claim Calculation 18
Sample- Quarterly Specialized Transportation Calculation 27
Sample- Fringe Benefit Calculation 28
Sample- Capital Calculation 29
Sample- Detailed Expenditure Report 30
Sample- State-Wide Summary Worksheet for 33
Out of District Schools
Sample- Time Study Summarization 34
V. Tables
Table I - Direct Personnel 37
Table II -Direct Support Personnel 38
2
Section I: Introduction
In accordance with laws and regulations governing the Medicaid program, school systems mandated by the Individuals with Disabilities Education Act (IDEA) to provide health-related services to their special education student populations are permitted to file claims for partial federal reimbursement of both their health service and administrative support expenditures incurred in providing those services. Qualifying administrative support expenditures fall into two categories: (1) support activities associated with the delivery of health-related services; and, (2) support activities that benefit a state’s Medicaid program administration generally. The Centers for Medicare and Medicaid Services (CMS), the federal agency responsible for Medicaid program administration, issued, in May 2003, an Administrative Claiming Guide; the Guide describes the parameters and methodology for claiming such administrative expenditures.
This Massachusetts Administrative Claiming Manual summarizes those parameters and describes the methodology that school districts in the Commonwealth must follow in order to properly complete claims for reimbursement for their qualifying administrative activity expenditures. For those readers already familiar with administrative activity claiming, note that the federal Guide introduced several important limitations to the scope of administrative activities that qualify for federal Medicaid reimbursement; those limitations are explained and highlighted in a companion Time Study Manual for School-Based Administrative Activities.
As a broad overview, there are two functions that must be performed by a school district (normally referred to as a Local Education Authority, or LEA) that desires to participate in administrative activity claiming. First, designated school personnel must complete a time study. In the Commonwealth, such a time study, which tracks how a school employee (or, in some cases, a school district contractor) spends their work day, needs to be completed during each of three quarters during the school year for a period of five consecutive days during each quarter. Guidance on how to perform the time study is provided in the Time Study Manual. Second, the district must collect certain types of expenditure information, more fully described later in this Manual.
Once the time study has been completed and the expenditure information collected, a district or LEA then (1) tabulates and summarizes the time study data to identify claimable activities performed by their staff and the amount of time spent on those activities; (2) applies certain formulae to the expenditure information; and (3) calculates the Medicaid Eligibility Factor for their district and applies it to the results of the time study and expenditure information.
This process will result in the calculation of a district’s gross expenditures; the federal Medicaid agency will award partial reimbursement, labeled federal financial participation or FFP, based on a district’s gross expenditures. Prior to filing a district’s quarterly gross expenditure calculation for federal reimbursement, an authorized district official certifies the claim calculation amount by signing and filing an Administrative Activity Claim Quarterly Claim Certification. (Refer to page 16.)
The balance of this Manual describes the sources of data to be used in claim preparation, adjustments that must be made to that data and a description of the steps to be followed in the final claim calculation process. As well, sample claim calculations are also provided.
If you have any questions about the administrative claiming program, you are encouraged to contact the office listed below:
University of Massachusetts Medical School
Commonwealth Medicine
Center for Health Care Financing
Municipal Medicaid Program
100 Century Drive
Worcester, MA 01606
508-856-8631
508-856-7643 (Fax)
Page 16
Section II: Terms and Definitions
1. DOE - Department of Education.
2. FFP – Federal financial participation rate per staff position as defined in 42 CFR 432.45 and 432.50 (ranging from 50%-90%).
3. Fringe Benefits - The cost of staff benefits (including health, life, dental and disability insurance, unemployment compensation, Medicare and pension contributions, and Workers’ compensation/Injury payments, other) funded from state/local revenue.
4. General Administrative Overhead Factor - The total percentage of time spent on administrative activity codes A through F (activity codes C, D, E and F should be multiplied by the Medicaid Eligibility Factor) divided by the total percentage of time spent (activity codes A through I, excluding H) for each job position grouping. If no allowable administrative activities are performed, no time associated with the administrative overhead factor can be claimed.
5. Gross Claim - The summation of claimable salaries, fringe benefits, materials/supplies, indirect costs, specialized transportation, out of district school tuition payments, and capital costs.
6. Indirect Cost Rate - The unrestricted indirect cost rate for each Local Education Authority is determined by the federal government for federally funded programs. The indirect cost rate for your community is available at the Department of Education.
7. LEA - Local Education Authority.
8. Material and supply costs - The actual cost of materials and supplies funded by state/local revenue which are used to assist in the performance of allowable Medicaid administrative activities.
9. Medicaid Eligibility Factor - The quarterly ratio of Medicaid eligible students in the school district to the total number of students registered in the school district served in the participating Local Education Authority.
10. Net claim - The product of the gross claim amount multiplied by the appropriate FFP rate.
11. Salary- The portion of the actual salary or contractual agreement funded by state/local revenue during the quarter for which a claim is being submitted.
12. School-Based Health Services – Those health-related services: (1) that are medically necessary and for which federal payment otherwise is available under the programs of medical care and assistance established under M.G.L. c. 118E and any policies, procedures and criteria established by the Executive Office of Health and Human Services; (2) that are provided pursuant to an Individual Education Planas defined and bygovernedby M.G.L. c. 71B and applicable regulations; (3) that are provided by any city or town, charter school, or regional school district that is responsible, or assumes responsibility, either directly or indirectly through an agency or other political subdivision, for paying the state share of such services; and (4) that are provided to students enrolled in public schools, charter schools, or regional schools.
Section III: How to Complete a Claim
1. Sources of Data
A. Identify Personnel Eligible for Time Study
B. Time Study Data:
1.) Time Study Participation
- 100% Participation - The time study is completed by all potential personnel
in each job position grouping; or,
- Sampling - The time study is completed by a sample selected for each job position grouping which is both random and at the 95% confidence level, with plus or minus 5% precision.
2.) Gathering - Gather all completed time study data (paper or electronic) from direct service and direct support personnel and separate them into groups by job position.
3.) Summarizing - For each job position grouping calculate the percentage of time spent on each administrative activity (A-I) in relationship to the total worked time (Refer to page 34).
C. Detailed Expenditures
1.) Prepare a report (Refer to pages 30-32) that identifies actual expenditures incurred during the quarter for Direct Personnel in job groupings 01-08 (refer to page 37). The claimable expense categories are as follows:
- Salaries or contractual agreements
- Fringe Benefits
a.) The cost of actual quarterly benefits for all Direct Personnel included in cost pool; or,
b.) The cost of actual quarterly salaries for all Direct Personnel included in the cost pool multiplied by the Fringe Benefit Percentage. The Fringe Benefit Percentage is the cost of annual budgeted district-wide staff benefits (including health, life, dental and disability insurance, unemployment compensation, Medicare and pension contributions, and Workers’ compensation/Injury payments, other) funded from state/local revenue divided by annual budgeted district-wide salaries (Refer to page 28).
- Materials and Supplies
2.) Prepare a report (Refer to page 32) that identifies actual expenditures incurred during the quarter for Direct Support Personnel in job grouping 09 (refer to page 38). The claimable expense categories are as follows:
- Salaries or contractual agreements
- Fringe Benefits
a.) The cost of actual quarterly benefits for all Direct Support Personnel included in cost pool; or,
b.) The cost of actual quarterly salaries for all Direct Support Personnel included in the cost pool multiplied by the Fringe Benefit Percentage The Fringe Benefit Percentage is the cost of annual budgeted district wide staff benefits (including health, life, dental and disability insurance, unemployment compensation, Medicare and pension contributions, and Workers’ compensation/Injury payments, other) funded from state/local revenue divided by annual budgeted district-wide salaries (Refer to page 28).
- Materials and Supplies
3.) For Out of District Schools, the health-related portion of the quarterly tuition is captured by taking the quarterly day school tuition payments plus the quarterly residential school tuition payments reduced by a 13.64% state-wide room and board discount factor multiplied by the state-wide health-related percentage per job position grouping (Refer to page 33). Allocate the allowable health-related portion of tuition to the appropriate job position grouping that is subject to the time study results (Refer to pages 30-32).
4.) Restricted federal funding should be deducted from the actual expenses, such that only state/local funding sources are included in the expenditure data.
D. Medicaid Eligibility Factor
1.) Gather quarterly school district enrollment information.
2.) Obtain Medicaid recipient eligibility information from the Office of Medicaid for the same quarter.
3.) Complete a data match of #1 and #2 above to identify the students in the district who are Medicaid recipients. Using the result of the data match, calculate the quarterly ratio of Medicaid eligible students in the school district to the total number of students registered in the school district served in the participating Local Education Authority. The resulting percentage is the Medicaid Eligibility Factor.
NOTE: The quarterly calculation of this factor is a crucial element of ensuring that the administrative claim includes only those costs that are appropriately allocable to the Medicaid program. LEAs should be certain to calculate the Medicaid Eligibility Factor by directly matching their list of the student population with a list of Medicaid recipients. This match can be satisfied by using one of the following methods:
1.) A direct match of student population to the quarterly eligibility list that is distributed by MassHealth (system and/or hand match).
2.) A direct match of student population to the eligibility information available on WebRevs. The toll-free number to contact for questions related to WebRevs is 800-462-7738
3.) Verification through the MassHealth toll-free number, 800-554-0042 or 800-833-7582.
If a student is attending a charter or regional school, only the charter or regional school is eligible to include that student in their Medicaid Eligibility calculation and the public school district should not include any such student in their count.
Direct any questions about how to appropriately calculate this element of the claim to the University of Massachusetts Medical School at the number listed in the introduction to this Guide.
E. General Administrative Overhead Factor
There is a separate General Administrative Overhead Factor for each Job Position Group. The following calculation must therefore be completed separately for each Job Position Group. If no allowable administrative activities are performed, no time associated with the administrative overhead factor can be claimed.
The formula for calculating each Job Position Group’s Overhead Factor is as follows:
[% of A + % of B + (% of C * Medicaid Eligibility Factor) + (% of D * Medicaid Eligibility Factor) + (% of E * Medicaid Eligibility Factor)
+ (% of F * Medicaid Eligibility Factor)]
% of A + % of B + % of C + % of D + % of E + % of F + % of G + % of I
F. Capital Costs
1.) Identify the acquisition costs of the school district’s buildings and improvements (including land improvements, such as paved parking areas, fences, and sidewalks). Multiply this amount by two percent (2%), which is the established annual use allowance calculation percentage for these items of capital cost. Include in this amount any of the buildings’ components (e.g., plumbing system, heating and air conditioning, etc.) (“fixed assets/equipment”). Do not include as fixed assets/equipment any equipment which is merely attached or fastened to the building but not permanently fixed to it and which is used as furnishings or decorations or for specialized purposes. Such equipment will be considered as not being permanently fixed to the building if it can be removed without the destruction of, or need for costly or expensive alterations or repairs, to the building or the equipment. (See OMB Circular A-87, Attachment B (“A-87(B)”) at 11(f).)
2.) Identify the acquisition costs of the school district’s equipment that is not included in the amount described in the previous paragraph (“major movable equipment”). Multiply this amount by six and two-thirds percent (6.67%), which is the established annual use allowance calculation percentage for this item of capital cost. (See A-87(B) at 11(f).)
3.) Valuation of building and equipment costs shall be based on the acquisition cost of those assets. Where actual cost records have not been maintained, a reasonable estimate of the original acquisition cost may be used. (See A-87(B) at 11(b).)
NOTE: The asset valuation must exclude:
- The cost of land;
- Any portion of the cost of buildings and equipment borne or donated by the Federal Government irrespective of where title was originally vested or where it presently resides; and
- Any portion of the cost of buildings and equipment contributed in satisfaction of a federal matching requirement.