School Districts Participating in School-Based Services Benefit Are Now Required to Submit Annual Cost Reports

Based on 2005 federal Centers for Medicare and Medicaid Services (CMS) guidelines, beginning in fiscal year 2007, school-based services (SBS) providers are now required to submit annual cost reports to Wisconsin Medicaid in order to participate in the SBS benefit and receive federal funding.

The CMS also required that fiscal year 2006 SBS reimbursements be based on costs. However, since the cost reporting requirements were not finalized by the end of fiscal year 2006, the state is currently working with the CMS to finalize a settlement methodology for fiscal year 2006. Currently, it is anticipated that the CMS will allow the fiscal year 2007 ratio of interim claims payments to final costs to be applied to the 2006 interim payments to determine the final 2006 payments.

Therefore, providers are reminded to thoroughly and accurately record and submit their SBS time studies and claims, as this information will be used to calculate both 2005-2006 school-year SBS reimbursement and 2006-2007 school-year reimbursement.

Information Included in the School-Based Services Cost Report

Participating school districts must complete the School-Based Services Cost Report, HCF 1538 (fillable Excel, 59 KB), with district-specific information regarding costs related to the provision of school-based services. The cost report consists of three main parts:

• Part A: Medicaid Expenditures before Indirect Expenditures.
• Part B: Fund 27 Purchased Medical Services and Medical Supplies.
• Part C: Certification and Reconciliation to Interim Payments.

Refer to the Medicaid Web site at dhs.wisconsin.gov/medicaid/sbs_56/index.htm for a sample completed School-Based Services Cost Report (Exel, 59 KB). Providers without Web access may call Provider Services at (800) 947-9627 or (608) 221-9883 to request a paper copy of the sample completed School-Based Services Cost Report.

Refer to the “Distribution and Completion of the School-Based Services Cost Report” section of this Wisconsin Medicaid and BadgerCare Update for information regarding the dissemination and completion of the School-Based Services Cost Report.

Information Included in Part A

Part A of the cost report calculates Medicaid expenditures at the school district level using data classified by functional area included in Project 11 and 19 of the Department of Public Instruction (DPI) Special Education Fiscal Report (SE Report) and the Annual Report. Other project codes identify costs reimbursable from other sources, including federal grants, and are not used. Any state grant funds that appear in Project Codes 315, 515, and 519 may be included under purchased services in Part A, Column K, and Part B, Line 9, provided they are not required to match federal awards for any program other than Wisconsin Medicaid. Include only those funds that would have been included in Project Codes 11 and 19 if they had not been reimbursed by state grants. The DPI defines Projects 11 and 19 as:

• Project 11 - State Categorical Aid Aidable Cost.
• Project 19 - State Categorical Aid Non-Aidable Cost.

The first section of Part A calculates Medicaid medical expenditures before indirect expenditures at the school district level using the DPI SE Report, the SBS time study, and the Medicaid Eligibility Rate ([MER], which is the ratio of the number of Medicaid students with an Individualized Education Program [IEP] receiving a medical service divided by the total number of students with an IEP receiving a medical service) for school-based services:

• Part A reports salary and fringe benefit cost by practitioner license classification. School districts are required to report salaries and fringe benefits by practitioner license for the distribution of state categorical aid. School districts maintain schedules with these practitioners’ non- federal award salaries and fringe benefits to support the amount of aid claimed. These schedules reconcile to the amounts reported on the worksheet.
• The total practitioner expenditures for each service area (salary and benefits) are multiplied by the percent of IEP medical services as determined by the time study for that service area. This amount is referred to as costs related to district-provided IEP medical services for that service area. To assist with the completion of this section, a Compensation Data Worksheet (Excel, 17 KB)is available for download from the Medicaid Web site at dhs.wisconsin.gov/medicaid/sbs_56/index.htm. School districts may use this form or create their own, as long as the created form contains all of the same information requested on the sample worksheet. This worksheet, or a comparable version of it, is required to be kept on file.
• The district-provided IEP medical services expenditures are added to the costs of purchased IEP medical services and supplies from Part B of the cost report. This sum is the IEP medical expenditures for the district for each service area.
• The IEP medical expenditures for the district are multiplied by the MER for school-based services for each service area. This product is the Medicaid expenditures before indirect expenditures for each service area.

The second section of Part A calculates Medicaid special education transportation expenditures before indirect expenditures:

• Salaries and employee benefits are reported for special education school bus drivers and bus aides.
• Special education school bus depreciation and operating costs are added to employee salaries and benefits to obtain total special education transportation expenditures.
• Special education transportation expenditures for the district are multiplied by the ratio of one-way trips that Medicaid- eligible IEP students travel to a Medicaid service to one-way IEP student trips. This product is equal to Medicaid special education transportation expenditures before indirect expenditures.

The third section of Part A is a report of directly identified clerical support staff costs for Medicaid billing.

Information Included in Part B

Part B provides a detailed description of IEP purchased medical services costs, IEP medical supplies, IEP employee travel, IEP purchased service support cost, and operating expenditures and depreciation associated with special education transportation-related costs included in Part A. These costs are transferred from the Part B worksheet to the Part A worksheet.

Information Included in Part C

Part C of the cost report calculates Medicaid-certified program expenditures by adding Medicaid medical expenditures to unrestricted indirect Medicaid expenditures. Part C uses results from Part A to identify certified Medicaid expenditures and to reconcile those expenditures to school district interim payments. It includes a section for the school district to sign off on the certification of Medicaid expenditures.

Distribution and Completion of the School-Based Services Cost Report

School districts will receive their specific School-Based Services Cost Report by e-mail no later than July 31, 2007. If a school district does not receive its cost report by that date, the school district is required to do one of the following:

• Call the Medicaid Administrative Claiming (MAC)/SBS Hotline at (888) 322-1006 and request a cost report.
• Download a blank cost report spreadsheet (fillable Excel, 59 KB) from the Medicaid Web site at dhs.wisconsin.gov/medicaid/sbs_56/index.htm.

The School-Based Services Cost Report that will be e-mailed to the school district will have some elements pre-filled by Wisconsin Medicaid. The pre-filled cost report fields are as follows:

• Columns M and Q in Part A.
• Lines 2, 5, and 7 of Column D in Part C.

If a blank copy is downloaded from the Medicaid Web site, these normally pre-filled fields will be completed by Wisconsin Medicaid after the school district submits its cost report. Refer to the Medicaid Web site at dhs.wisconsin.gov/medicaid/sbs_56/index.htm for a sample completed School-Based Services Cost Report (Excel, 59 KB). Refer to the Attachment of this Update for the School-Based Services Cost Report Completion Instructions, HCF 1538A (PDF, 68 KB). Providers without Web access may call Provider Services at (800) 947-9627 or (608) 221-9883 to request a paper copy of the sample completed School-Based Services Cost Report.

School-Based Services Cost Report Submission

Completed cost reports for fiscal year 2007 must be submitted electronically to SBScostreports@dhfs.state.wi.us no later than October 31, 2007, and annually thereafter, no later than October 31. The school district’s financial data reported on the school-based services cost report must be derived from and supported by the district’s audited financial statements and related trial balance based on Generally Accepted Accounting Principles (GAAP).

It is anticipated that the CMS will be performing audits of the SBS benefit. Therefore, all documentation in the cost report and time study must be complete and accurate to assure full compliance in the event of an audit. Supporting documentation must be maintained to support all claims and time study activity.

School-Based Services Cost Report Settlement

Wisconsin Medicaid will reconcile interim reimbursement to cost by recovering overpayments or making additional payments up to cost. Some school districts may receive an increase in reconciliation funding up to cost, and other school districts may see a decrease in reimbursement.

Future publications will provide additional information regarding reconciliation of overpayments or underpayments.

Providers are reminded that, based on the terms of reimbursement, each SBS provider is required to document the total allowable cost it has incurred for all SBS services using a cost report developed by Wisconsin Medicaid. As required by the CMS, SBS providers must certify these documented SBS costs by submitting an annual cost report form (School-Based Services Cost Report) developed by Wisconsin Medicaid for each state fiscal year. Certifying expenditures is necessary for the SBS provider to qualify for federal financial participation (FFP) funds provided by the state.

Resources

For more information regarding the completion or submission of the School-Based Services Cost Report, school districts may do the following:

• Send questions in an e-mail to SBScostreports@dhfs.state.wi.us.
• Call the MAC/SBS Hotline at (888) 322-1006.
• Download the May 23, 2007, SBS cost reporting training session Webcast. A link is available in the “Hot Topics” box on the SBS provider page of the Medicaid Web site at dhs.wisconsin.gov/medicaid/sbs_56/index.htm.

Attachment — Wisconsin Medicaid School-Based Services Cost Report Completion Instructions (PDF, 68 KB)