Traverse Bay Area Intermediate School District

1. Traverse Bay Area Intermediate School District Medicaid School Based Services Billing Program Audit 2008-09

2. Traverse Bay Area Intermediate School District volunteered for initial Medicaid audit review in the state • Michigan Department of Community Health was looking for an ISD that could provide an environment to fine tune the procedures that the newly hired auditor and his management team had developed. They needed to determine if their audit procedures were appropriate and sufficient for the School Based Services environment. • TBAISD was comfortable with the compliance procedures they had in place for the Medicaid School Based Services Billing Program, and felt an audit would be a learning experience. Deb Johnson, Medicaid Coordinator, TBAISD

3. Audit Timetable • TBAISD volunteered for audit October 1, 2009 • The auditors scheduled three weeks of auditing time: • October 12 through October 14, 2009 to review specific claims process, quarterly financial reports and back up payroll reports • October 26 through October 29, 2009 to follow up and visit selected LEA districts • January 11 through January 14, 2010 to review new reconciliation process and revisit selected LEA districts • The auditors requested: • A workspace with a telephone • Some tech support to make sure their computers could access their state programs • All requested student records be printed and ready to go • Access to Medicaid staff and appropriate business office personnel for financial questions • Arrangements for visits to business managers at local districts • TBAISD informed all staff ahead of time that auditors would be in the building and to provide assistance if needed Deb Johnson, Medicaid Coordinator, TBAISD

4. Student Records • Audit period: April 1, 2009 through June 30 2009 • Auditors requested the following records for 22 students throughout the ISD, based on claims that had been received by State of Michigan Medicaid: • Printout of the billing documentation • All student IEPs applicable to the time period • Original special education referral • Most recent evaluation documentation • All required doctors’ orders/prescriptions • All staff certification for those providing the billed services • Electronic signature forms held on file for staff, representing staff claim signatures • Medicaid parent permission forms, not requested by auditors, but TBAISD supplied Deb Johnson, Medicaid Coordinator, TBAISD

5. Financial Reports • The auditors: • Traced financial amounts reported on quarterly cost reports for the outreach program to payroll reports for both the ISD and LEAs • Reviewed the reconciliation process by examining MAER (Medicaid Allowable Expense Report) cost reports for both transportation and TBAISD direct services, and looked at the quarterly cost reporting for case managers for the ISD and LEA districts, and then traced those costs to payroll reporting • Searched for costs that had been reported to Medicaid, but funded by federal dollars, or inappropriate cost reporting for salary, benefits or “other costs.” • TBA did not bill for personal care services during this audit period Deb Johnson, Medicaid Coordinator, TBAISD

6. Audit Findings • All TBAISD student records were complete in reference to the claims submitted • The auditors were pleased with the compliance procedures that TBA had in place, including: • Quality Assurance Committee (QAC) Meetings; our internal audits • TBAISD Compliance Plan • Procedures/plan in place to facilitate program compliance • A comprehensive Medicaid team approach that involves both the special education department and the business office operations • TBA has not received the official written report from the auditors Deb Johnson, Medicaid Coordinator, TBAISD

7. Audit Findings Requiring Action • The auditors had concerns with the PCG Billing System in two areas: • The billing program did not require comments for all services • The billing screen did not show the Current Procedural Terminology (CPT) procedure codes, only a description of the service type • Some TBAISD Outreach “non-salary costs” had been bundled on one line by department on the quarterly cost report • Auditors want to see these costs associated directly with corresponding staff members on the cost report list • The auditors want TBAISD to stay in the loop on all local district financial reporting • “The final claim is owned by TBAISD” • Both TBAISD and its local districts had received federal dollars for salary and benefit costs that were then included on the cost reports for Medicaid • One local district included salary amounts on the quarterly cost reports for staff performing coaching/extracurricular activities • One local district had received federal dollars for transportation costs that were then reported for Medicaid reimbursement • TBA has not received the official written report from the auditors Deb Johnson, Medicaid Coordinator, TBAISD

8. Audit Action List • Effective January 1,2010, all Medicaid services logged by TBAISD staff require comments describing the therapeutic procedure used and how the student responded • TBAISD worked with PCG to make sure that CPT (Current Procedural Terminology) procedure codes will now show next to billing service types on the billing screen • TBAISD made changes in business office reporting to protect against cost reporting errors • All local business managers were contacted to review issues with federal dollars and to confirm their 2008-09 cost reports for accuracy • Local business managers will now be required to copy TBAISD on the quarterly financial reports sent in to miaop (Michigan Administrative Outreach Program). • All 2008-2009 quarterly cost reporting corrections were made to Medicaid • TBAISD amended their previously completed 2008-09 reconciliation summary with the state Deb Johnson, Medicaid Coordinator, TBAISD

9. Future Plans for Program Implementation • TBAISD will: • Continue a team approach that pulls together both special education and business office expertise • Stay in the loop throughout the year on all local district Medicaid financial reporting • Provide support to local districts with reminders when federal dollars are distributed • Share program updates with local business managers • Amend their Compliance Plan and QAC Meetings to pull in new internal audit procedures related to cost reporting and reconciliation • Continue to maintain high level billing screens for all program requirements, ex: scripts, IEPs, staff certification, current IEPs Deb Johnson, Medicaid Coordinator, TBAISD