Medicaid Administrative Claiming (MAC) CAP & RMTS Overview PACA MH/DS Spring Conference

1. Medicaid Administrative Claiming (MAC) CAP & RMTS OverviewPACA MH/DS Spring Conference April 11, 2019 Confidential: The contents of this document are internal pre-decisional records of the DHS and individuals receiving and reviewing this document must not provide this information to any other person without written permission. 65 P.S. § 67.708 (b) (10).

2. Presenter:Bob Deatherage Statewide RMTS Coordinator Department of Human Services Division of Financial Reporting

3. Agenda • Overview • What is Medical Administrative Claiming? • MAC • Deferrals and Disallowances • Why? • Impact • CMS Position • DHS Work to Date • Project Status • Plan Implementation • Plan for February through June • Impact on Counties • Cost Reporting and Claiming Overview • Cost Reporting Forms • Reallocation • RMTS Results • Eligible Percentage • FFP • Questions

4. In Summary Centers for Medicare and Medicaid Services (CMS) deferring payment of Medicaid administrative claims Involves county ID-MH-EI Medicaid program administrative claims Need to address CMS’ concerns to get the funding restored CMS has provided guidance on the approach Today’s goal: provide an update and preview of cost reporting

5. MAC • Examples: • Medicaid outreach • Referral, Coordination and Monitoring of Medicaid Services • Translation Related to Medicaid Services • Program Planning, Development and Interagency Coordination of Medicaid Services • What is Medicaid Administrative Claiming (MAC)? • Federal policy and program by which states may be reimbursed for the administrative costs associated with operating the Medicaid program • CMS will only pay claims that meet their strict requirements • Each quarter, DHS submits the counties’ MAC costs to CMS for 50% reimbursement • DHS pays the other 50%

6. Deferrals and Disallowances Over $217,000,000 • Federal Funds deferred (withheld) or disallowed (denied) in SFYs 2013, 2014, 2015, 2016, 2017, 2018 • County ID/DD, MHMR, and EI programs’ administrative costs (MAC) • Total does not include significant deferrals affecting MATP • Deferrals continue, could become disallowances • Additional deferrals/disallowances each quarter • Will continue until CMS is satisfied that costs are appropriately allocated to the Medicaid program

7. Why? • CMS Concerns • Duplicative [or potentially duplicative] costs • Unreasonable or estimated costs • Cost allocation methods unclear or insufficiently defined • Inconsistent cost allocation, reporting, and claiming among counties and programs • Lack of documentation

8. Impact • Negative Impact on the Commonwealth • DHS continues to pay counties full amount • Reimbursing counties their full allotments for Medicaid administrative claims, filling in state dollars to replace the lost federal funds • DHS cannot continue indefinitely to pay both the state and the federal portion • CMS may begin to change deferrals into disallowances

9. CMS Position Deferrals and/or disallowances will continue until DHS: • Adopts a consistent random moment time study (RMTS) approach for all affected programs • Provides consistent cost claiming guidance to the counties • Improves its review and audit procedures

10. DHS Work to Date • Why RMTS? • Preferred by CMS • Already used by many other states • Produces statistically valid results • Minimizes burden on employees • Already used by PA for school-based and foster children Medicaid programs Surveyed county program administrators and staff to gather information about administrative activities, staffing practices, etc. Researched other states’ MAC RMTS details Developed methodology for a new RMTS to be used by all county-administered MH/ID/EI MA programs statewide Drafted a new cost allocation plan (CAP) to describe the new claiming methodology and RMTS; submitted to CMS for review/approval Procured a vendor (HZA) to supply and maintain an easy-to-use, full-featured web-based RMTS solution Drafted new, detailed and consistent claiming guidance applicable to all three program areas (MH, ID, EI)

11. Project Status • CAP • Answering questions from CMS to move toward approval • RMTS • Working with HZA to complete customization of their RMTS product (ARMARS) • Conduct RMTS Pilot prior to RMTS System “Go Live” planned for July 1, 2019 • New claiming guidance • Refining draft • Communication • Sharing project information with counties, CCAP, and PACA MH/DS • Meetings • Presentations • Newsletters • Training Curricula • Finalizing training curricula, RMTS user guides, and FAQs • Planning • Implementation planning is ongoing

12. DHS Implementation Plan

13. Plan for February through June For simplicity, we are using the term “Administrative Entity” or “AE” to mean “county or county joinder MH/ID/EI program” • Work with CMS to obtain approval of the new cost allocation plan • Operate a Pilot program to test the RMTS (April and May) • Limited number of counties representing each region • Finalize and distribute the new claiming guidance to counties • Provide training for all RMTS participants and AE Coordinators for the RMTS (June) • Officially implement the CAP and RMTS on July 1, 2019

14. Impact on AEs • Potential financial impact of change due to Random Moment Time Study and new guidance will vary from AE to AE • Some training will be required -- June • Each AE will need an employee to help administer the time study (maintain participant list, etc.) • Existing state allocations will be paid as they are currently (prospectively, each quarter)

15. Cost Reporting and Claiming Overview

16. Cost Reporting and Claiming Overview • Costs will need to be entered into ARMARS at the conclusion of each quarter • Must not save costs for entry in later quarter • Federal reimbursement will be paid based on the actual RMTS-determined claim • Each survey/moment will be assigned to codes • And reallocation of Code 10 surveys (General Administration) • Assignment of cost to the 5 cost pools

17. Cost Reporting Forms Six claiming areas -One form (tab) for each -Matches existing claim types Non-MAC costs -Reported on separate tab -Split to claim areas by the software 1 2 3 4 5 6 • Sample cost collection form

18. Bob Deatherage, Statewide RMTS CoordinatorDepartment of Human Services, Division of Financial Reporting 625 Forster Street | Room 605 | Harrisburg, PA 17120 Phone: 717.547.3296 RA-PWCountyCostAlloc@pa.gov Questions? For answers to any additional questions, please contact: