Medicaid School Based Services Update

1. Medicaid School Based Services Update MAASE October 15, 2008

2. Presenters: • Thomas Koepke Director, Special Education Management Services, Macomb ISD • Jane Reagan Department Specialist, Medicaid, OSE-EIS, Michigan Department of Education • Liz Patrick Supervisor, Instructional Data Management & Special Education Finance, Ingham ISD Members, Medicaid School Based Services Workgroup

3. Outline • Overview • Backcasting • Moratorium • State Plan Amendment Changes • Outreach • Fee for Service • Personal Care Services • Reimbursement methodology • New Time studies

4. Medicaid – Overview • Largest payor of health care in US • In 2007, $340 billion for over 62 million individuals (30 million children) • Two types of reimbursement in school settings – Fee for Service and Outreach

5. Medicaid – Overview • Outreach • Provides funds to districts that are working to identify children that are uninsured and may qualify for Medicaid – involve ALL students • Fee for Service • Reimbursement for certain health related services (PT, OT, Nursing, etc) provided to Medicaid eligible children with IEP or IFSP

6. Backcasting – Overview • May 2002 Settlement Agreement – between Feds & State • Prompted by a disagreement regarding Michigan’s Outreach claiming methodology • Methodology used was State approved • Feds did not provide formal guidance on acceptable claiming methodologies until the issuance of the May 2003 “Medicaid School-Based Services Administrative Claiming Guide”

7. Backcasting – Overview • Settlement required new program design – effective January 2004 • Results of 1st 4 quarters under new plan applied to previous 16 quarters – Jan/Mar 2000 through Oct/Dec 2003

8. Backcasting – Overview • 10/22/07 CMS Final Report • $89,848,860 Overpayment ISD 60% = $53,909,316 State 40% = $35,939,544 • “CMS expects the State to refund the financial amount identified”

9. Backcasting – Current Status • ISD Reserves • ISD $’s held by State = $20,737,997 • ISD $’s held by ISD = ?? • ISD Max repayment ISD Overpayment $ 53,909,316 ISD Reserve-held by State - 20,737,997 ISD Reserve-held by ISD - ??? $ 33,171,319

10. Backcasting – Current Status • Breakdown of total by ISD • CMS report only addressed total overpayment • MDCH responsible for calculating breakdown • State has appealed CMS decision • ISDs - wait and see

11. Congress’ Moratorium on Proposed Regs – until April 1, 2009 Federal CMS proposed in 2007 to: • Eliminate reimbursement for Outreach (AOP) and Transportation • Redefine/limit targeted case management • Redefine/ limit rehabilitative services to exclude reimbursement for “intrinsic elements” of education programs • Limit reimbursement to governmental providers’ costs by narrowing definition—impacted schools

12. Outreach – Current Status • 2006-07 Total Statewide Reimbursement = $19,000,000 ISD 60% = $11,400,000 State 40% = $7,600,000 • Statewide Vendor - Public Consulting Group (fees paid by ISDs & State) • No changes for 2008-09

13. FFS – Current Status • 2006-07 Total Statewide Reimbursement ProgramTransportationTotal ISD (60%) $64,600,000 $2,300,000 $66,900,000 State (40%) 43,100,000 1,600,000 44,700,000 $107,700,000 $3,900,000 $111,600,000

14. FFS Reimbursement–Before 7/1/08 • Service documentation logs • Reimbursement rate per service type and statewide fee • Claim submitted to MDCH • ISD Reimbursement based on what was provided/billed

15. FFS Reimbursement – After 7/1/08 • Cost-based • Provider (ISD)-specific • Annually reconciled • Cost settlement process • Service documentation and claim submission is still required

16. New Reimbursement Methodology Total Allowable Costs + Indirect Cost Rate(MDE) x Direct Service %(annual avg from RMTS) x ISD SE Med Elig Rate, Hlth Svcs(Dec1) x Fed Medical Assistance %(’08=58.1%) x ISD Reimbursement Rate (60%) Net Dollars to ISD

17. Random Moment Time Study (RMTS) • Previously 1 RMTS for Outreach – 800 moments/quarter • Now 4 RMTS – 3,000 moments/qtr each • Outreach Only Staff • Direct Medical Service Providers • Case Managers • Personal Care Providers • Only staff on staff pool lists can be included as part of Medicaid Allowable costs

18. Interim Payment Process • Estimated based upon prior year • 2008-09 = 75% of 2006-07 • ISDs may adjust payment • MDCH will monitor claim volume • If claiming drops significantly be prepared for questions and/or payment adjustment

19. SE Medicaid Eligibility Rate for Health Related Services Medicaid Eligible SE Students with a health-related support service in the IEP _______________________________________________________ Total SE Students with a health-related support service in their IEP **Based on December 1 count**

20. Allowable Direct Service Providers • ASHA certified speech language pathologist • TSLIs under the direction of an ASHA certified SLP or audiologist • Audiologist • LPN/RN • OT/COTA • PT/PTA • Orientation & Mobility Specialist • Psychologist (full license only or limited under the direction of a fully licensed psychologist) – (Not School Psych’s) • Licensed Master’s Social Worker

21. Under the Direction of: • Supervising the individual’s care • Face to face contact initially and periodically • Prescribing the type of care • Reviewing the need for continued services throughout treatment • Assuring professional responsibility for services provided • Ensuring all services are medically necessary

22. Personal Care Services Range of human assistance services provided to SE students, enables them to accomplish tasks that they would normally do for themselves if not for the disability • Eating/Feeding/meal preparation • Toileting/maintaining continence • Personal Hygiene/grooming • Transferring/mobility/positioning

23. Personal Care Services • Providers - Health aides, Instr aides, Parapros, Program assts, Teacher aides, Trainable aides • Require authorization • Need for service documented in IEP • Service documentation

24. Financial Reporting Changes • Cost Reporting • Current • Outreach = Quarterly financials • FFS = n/a • New Methodology • Outreach Only = Quarterly financials • Direct Medical = Addendum to 4096 • Personal Care = Quarterly financials • Case Management = Quarterly financials

26. Fiscal Impact of Changes Will vary from ISD to ISD based on: • Actual state-wide direct service % compared to % of direct services per ISD that are typically logged • Costs – mainly salary & benefits • Medicaid eligibility rate • Indirect cost rate

27. 2008-09 Budget Impact Medicaid Outreach – 4 quarters Medicaid FFS - Estimate based on 75% of 2006-07 revenue - 2007-08 claiming - Personal care – no payment in 08-09 (will be part of cost settlement process in 2010)

29. 2008-09 Timeline Cost Reports • June 30, 2009—end of first year • Oct 15, 2009—ISDs access Medicaid cost reports via web, w/ pre-populated fields (time studies, Medicaid elig rate, indirect cost rates) • Oct 31, 2009—LEA and PSA Medicaid cost reports due to their ISD • Dec 31, 2009—ISDs submit summary cost reports to Medicaid

30. 2008-09 Timeline Cost Reports, cont’d • Jan 2010—Initial settlement of ISD costs and adjustments of interim payments begin • Revisions to Medicaid Cost Report may occur until July 2010 • July 2010—Final ISD settlement process begins

31. More Discussion if time Resources: Medicaid SBS Work Group At Medicaid agency: Linda Sowle, Medicaid Policy Specialist, Michigan Department of Community Health 517-241-8398 SowleL@Michigan.gov