You’ve got two rounds of cost reporting for the Medicaid School Program (MSP) under your belt. You might feel like you should be an old hand at the procedure by now, but process changes keep shifting the sands beneath your feet. Struggling to find terra firma, treasurers everywhere are thirsting for information about third round of reporting – which will be here before you know it.
School business officials from across the state have asked me what they can expect from the next round of reporting. When will I receive my final settlements? Will the agreed upon procedures change? Am I really required to bid for service providers?
I sought out representatives of billing companies, school treasurers and the Ohio Department of Education (ODE) and dug for answers. Straight from the sources, here are the top five things you need to know to prepare for the next round of the MSP.
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Final Settlements Are Coming
The Office of Medicaid Assistance is finalizing their review of the cost reports from the first reporting period, which covered expenses incurred Oct. 1, 2009 to Sept. 30, 2010. They completed their meetings with representatives of all billing companies on April 15, 2013. Billing company representatives told me that they expect to hear about proposed settlements for that first reporting period soon – and when they do, they’ll contact your district with details.
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No Changes to Agreed Upon Procedures
Discussions with ODE indicate that the current procedures will probably remain intact for at least two more reporting periods. If changes cannot be implemented before the June 30 year-end, changes are unlikely. As changes aren’t expected to happen by that deadline, problems may exist for future cost reports on procurement contracts over $25,000 that weren’t bid according to the program’s formal procurement procedures.
Going forward, districts with contracts over this threshold will need to follow the formal procedures or face possible rejection of their reimbursement requests. If your procurement procedures deviate from the proscribed process, your district should document the reason why they deviate. You should also seek a waiver from the Ohio Department of Job and Family Services – although there’s no guarantee that they’ll grant it.
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Competitive Bidding Rules Remain in Place
From a treasurer’s perspective, competitive bidding requirements have been one of the most frustrating parts of the MSP. The ODE indicated that these rules are unlikely to change as they are required by statute for the Centers for Medicare & Medicaid Services, the program’s ultimate funder. The trouble for schools comes in that the Ohio Revised Code and many administrative purchasing policies simply don’t address service contracts. As such, the MSP bidding requirements are outside of the normal process for schools contracting with vendors that supply therapists for special needs students.
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ESCs Still Exempt from Competitive Bidding
It is assumed that schools contracting with educational service center (ESCs) for services reimbursed by Medicaid will remain exempt from the bidding requirement and can continue with annual agreements. This exemption falls under the authority of the Code of Federal of Regulations; CFR 92.36(b)(5) indicates that grantees are encouraged to enter into state and local intergovernmental agreements for procurement or use of common goods and services to foster greater economy and efficiency. As ESCs fall into this intergovernmental agreements category, you can feel safe in continuing your contracts with them.
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Compliance and Documentation Endure
When contracting with non-ESC service providers, your district needs to evaluate the requirements of CFR 92.36(b)(5) and determine the steps needed to ensure compliance. To stay on the right side of the regulation, you should document the service provider selection process, including how many vendors bid on the services and whether the contract was competitively bid. When developing the process, remember that federal regulation prohibits geographical preferences, although in many cases it’s a board policy.
When competition is limited or a vendor is determined to be a sole source contractor, you should perform some type of cost analysis when you award the contract. If the contract is below the $25,000 procurement threshold, you should still record and document the selection process. This documentation can take various forms, but could include obtaining verbal quotes or comparing to catalog or Internet pricing levels when selecting a provider. It is important to document this information, not only to help CPA firms completing the required agreed upon procedures, but to support the Office of Medicaid Assistance’s review of the reimbursement request, too.
Help’s Available for School Officials
Governed by often conflicting federal, state and local regulations, participation in the MSP can be difficult for school business officials. Trying to ensure compliance to a host of ever-changing regulations, you might find yourself struggling to keep up – but you don’t have to do it alone.
If you have a question about the future of the MSP, feel free to contact Rea or any member of government services team. We’re working to stay informed on the future of the program and will be happy to share our knowledge with you. We’ll help you determine which regulations apply to your district’s services and develop a plan to keep you in compliance with all applicable regulations.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.