03/11/16: Maximizing MSP Reimbursement

Is our school district “Maximizing MSP Reimbursement”?

In the next several years, the Ohio Department of Medicaid (ODM) will be expanding MSP billable services to include Intensive Behavioral Services, Delegated Nursing, and Personal Care Services. We hope that the new services will be added effective 07/01/16, but with all of the other issues going on with the program, it will more likely be the 2017/18 school year. Ohio House Bill 89 is moving its way through the Ohio Legislature, and ODM will likely implement parts of the Bill prior to any passage of the legislation. Regardless of the startup date, all of the Ohio MSP billing vendors are ready to implement this program expansion. I know that some have already started documenting for the new services, but the official effective date will be based on the date that ODM submits the State Plan Amendment (SPA) to CMS for approval, which has not yet occurred. The increase in Medicaid reimbursement from this expansion will vary for each district, but I would anticipate an overall increase of around 25%, with some districts getting a little higher than 25%, and some a little lower, based on actual costs.

In the meantime, there are many other areas of the Ohio Medicaid School Program where some districts are not realizing their maximum potential in MSP reimbursement. Remember that the Ohio Medicaid School Program is a “Cost Reimbursed” program, where Related Service costs are factored down by RMTS, MER, and FMAP.

RMTS = Random Moment Time Study – Statewide average of “percent of time district employed therapists perform Medicaid reimbursable activities”.

MER = Medicaid Eligibility Rate – District percentage of IEP students with Medicaid insurance.

FMAP = Federal Medical Assistance Percentage – Percent of allowable costs that Medicaid will reimburse.

I spend a great deal of my time traveling around to Ohio school districts doing what I call a “Medicaid School Program Review and Checkup”. I do this for clients and non-clients, and it helps identify areas where districts can increase their MSP reimbursement. Below are the specific areas that I look at:

Indirect Cost Rate (ICR) – Although the ICR cannot be applied to Contracted Costs, districts with employed therapists can increase their MSP reimbursement by as much as 15-20 percent by applying for an Indirect Cost Rate from ODE. Most billing vendors will prepare the ICR Report for you, and it also computes a Restricted Rate that can be used on Federal grants. Only direct therapy costs are allowable on the Cost Report, and the ICR is where indirect/overhead costs are allocated.

Federal Spending – Since the Medicaid School Program reimbursement comes from the Federal Government, we cannot include any costs on the MSP Cost Report that are paid out of any “500 series” funds. Any Related Service costs that are being paid with federal funds that can be appropriately moved to General or State funding would increase MSP reimbursement.

Direct Medical Supplies and Equipment – Medical Supplies and Equipment that are directly related to the IEP Related Services that a student is receiving are reimbursable by Medicaid. Medical supplies and equipment are reimbursed in the Cost Report, and are subject to the same MSP procurement requirements as other MSP contracted services. I suggest that districts set up a special account to accumulate “IEP Medicaid Supplies and Equipment” costs.

Random Moment Time Study Compliance – All MSP therapists that are directly employed by the school district must participate in the RMTS Time Study. Only employed therapists that are providing services to students on an IEP should be included. When a therapist is selected to record an RMTS moment, it is very important that they reply promptly to the time study. Therapists that do not respond have their moment automatically counted as a non-reimbursable activity when computing the RMTS percentage. Placing inappropriate therapists on the RMTS or not responding to a time study selection reduces the RMTS percentage for all districts.

Current Billable Services – Almost all districts are billing for the five common MSP services (OT, PT, Speech, Psychology, and Nursing). Specialized Transportation was added to the program beginning with the 2015/16 school year, and also reimbursable are IEP Counseling Services, IEP Social Work Services, and Audiology Services. Speech Aides and Speech Therapists in their Clinical Fellowship Year (CFY) are also allowable service providers in the Ohio Medicaid School Program. Targeted Case Management (TCM) is currently a reimbursable service under MSP, but would require specific rule changes to make it billable in Ohio schools.

Parental Consent Forms – All MSP school districts should pay particular attention to their 2014/15 MSP Cost Report, which billing vendors will begin preparing in the next few months. This Cost Report is due 12/31/2016, and is the first Cost Report that will penalize districts for not obtaining Medicaid Parental Consent forms from parents. Not having interim billing for all Medicaid students will lower your districts MER percentage and reduce overall MSP reimbursement. Those districts that did poorly on getting Parental Consent forms will see a reduction in their MER percentage and reimbursement, while those districts that did very well with getting consent forms will see their MER percentage and reimbursement actually increase from previous years.

AUP Audit Adjustments – To the extent that your billing agent is coordinating your AUP audit, districts really need to pay attention to their audit findings and audit adjustments. When there is a finding, that means that someone did something wrong that needs corrected. The penalty for claim adjustments are minimal, but “Cost Adjustments” can result in huge reimbursement losses. Getting a $50,000 Final Settlement is good, but if it could have been $100,000 if it were not for a cost adjustment, then that issue must be addressed so that it does not happen again. Make sure that you understand the results of your AUP audit, and get those results directly from your CPA firm.

Cost Report Costs – The Medicaid School Program Cost Report is the most important component of the entire program. What seems to be a complicated report is actually very simple. The report consists of Costs, ICR%, RMTS%, MER%, and FMAP%. Your MSP reimbursement should remain constant each year unless one or more of these factors dramatically change. As any of these factors increase so does Total Medicaid Reimbursement, and when they decrease, reimbursement decreases accordingly. Make certain that all allowable costs are reported for all therapists that documented IEP services for the program.

As you can see “Maximizing MSP Reimbursement” goes well beyond adding new services to the program. There are many factors that affect your MSP dollars, so a periodic “Review and Checkup” is always a good idea. For the period of October 1, 2015 – September 30, 2019, Medicaid is paying an enhanced FMAP for all Healthy Start Medicaid children. Around 30% of Medicaid students are enrolled under the Healthy Start Program (Medicaid Expansion). The FMAP for Healthy Start increased by 23%, from 73.73% to 96.73%. This alone should increase MSP reimbursement for all districts by around 7% for each of the next four years.

Make sure that you are currently maximizing your MSP reimbursement, so that your district is ready for the additional opportunities that lie ahead. Please let us know if you have any questions on “Maximizing MSP Reimbursement”.