Current through Register Vol. 43, No. 02, November 27, 2024
(1) The financial accountability of providers
for funds expended on home- and community-based services must be maintained and
provide a clearly defined audit trail. Providers must retain records that fully
disclose the extent and cost of services provided to eligible recipients for a
five-year period. These records must be accessible to the Alabama Medicaid
Agency and appropriate state and federal officials. If these records are not
available within the state of Alabama, the provider will pay the travel cost of
the auditors.
(2) The state
agencies as specified in the approved waiver document as operating agencies of
home- and community-based services, will have their records audited at least
annually at the discretion of the Alabama Medicaid Agency. Payments that exceed
actual allowable cost will be recovered by Medicaid.
(3) The Alabama Medicaid Agency will review
at least annually the recipient's care plans and services rendered by a
sampling procedure. The review will include appropriateness of care and proper
billing procedures.
(4) The state
agencies as specified in the approved waiver document will provide
documentation of actual costs of services and administration. Such
documentation will be entitled "Quarterly Cost Report for the Elderly and
Disabled Waiver." The "Quarterly Cost Report" will include all actual costs
incurred by the operating agency for the previous quarter and include costs
incurred year-to-date. This documentation will be submitted to the Alabama
Medicaid Agency before the first day of the third month of the next quarter.
Quarters are defined as follows:
(a) 1st October - December
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Due before March 1
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(b) 2nd January - March
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Due before June 1
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(c) 3rd April - June
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Due before September 1
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(d) 4th June - September
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Due before December 1
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Failure to submit the actual cost documentation can result in
the Alabama Medicaid Agency deferring payment until this documentation has been
received and reviewed. Quarterly Cost Reports will be reviewed to determine
necessity of a field audit.
(5) Auditing Standards - Office of Management
and Budget (OMB) Circular A-87, "Cost Principles for State and Local
Governments" will apply to governmental agencies participating in this program.
For nongovernmental agencies, generally accepted accounting principles will
apply. Governmental and nongovernmental agencies will utilize the accrual
method of accounting unless otherwise authorized by the Alabama Medicaid
Agency.
(6) Cost, Allowable and
Unallowable --
(a) 45 CFR, Part 95, specifies
dollar limits and accounting principles for the purchase of equipment.
Purchases above the twenty-five thousand dollar limit require the approval of
Medicaid.
(b) OMB Circular A-87
establishes cost principles for governmental agencies and will act as a guide
for non-governmental agencies. For governmental agencies, all reported cost
will be adjusted to actual cost at the end of the fiscal year.
(c) Contract payments for the delivery of the
specific services are allowable expenses. Thus, contracts for case management,
personal care, homemaker, respite care, adult day health, and home delivered
meals are recognized expenses. All other contracts will require Medicaid
approval to ensure that functions are not being duplicated. For example,
outreach is to be performed by the case manager, thus, it would not be
appropriate to approve other contracts for outreach, unless it can be clearly
shown that the function is required and cannot be provided within the
established organization.
(d)
Allowable costs are defined in OMB Circular A-87. However, the following
restrictions apply:
1. Advertising is
recognized only for recruitment of personnel, solicitation of bids for services
or goods, and disposal of scrap or surplus. The cost must be reasonable and
appropriate.
2. The cost of
buildings and equipment is recognized. For governmental agencies, buildings and
equipment exceeding twenty-five thousand dollars will be capitalized in
accordance with 4 5 CFR §95.705 and depreciated through a use allowance of
two percent of acquisition cost for building and six and two-thirds percent for
equipment. Equipment that has a remaining value at the completion of the
project will be accounted for in accordance with 4 5 CFR §95.707 . For
automated data processing equipment, see 4 5 CFR §95.641 . When approval
is required, the request will be made to the Medicaid Agency in
writing.
3. The acquisition of
transportation equipment will require prior approval from the Alabama Medicaid
Agency. When approval is required, the request will be made to Medicaid in
writing.
4. Transportation is an
allowable expense to be reimbursed as follows:
(i) For nongovernmental agencies, it will be
considered as part of the contract rate.
(ii) For government and private automobiles
utilized by state employees, reimbursement will be made at no more than the
current approved state rate.
(iii)
All other types of transportation cost will be supported by documents
authorizing the travel and validating the payment.
(e) Unallowable costs are
specified in OMB Circular A-87. In addition to these, the following are not
covered by this program:
1. Cost covered by
other programs, such as:
(v) Inhalation, group,
speech, occupational, and physical therapy.
2. The cost of advisory councils or
consultants without the Alabama Medicaid agency's approval.
3. Legal fees as follows:
(ii) Relating to fair hearing,
(iii) In connection with lawsuits, which
result in an adverse decision,
(iv)
Services that duplicate functions performed by Medicaid or the provider, such
as eligibility determination for the program,
(v) Other legal fees not relating to the
providing of services to the beneficiaries.
4. Dues and subscriptions not related to the
specific services.
(7) Cost Allocation Plans
(a) State agencies are required to have a
cost allocation plan approved by the Division of Cost Allocation (DCA) when the
agencies handle multiple federal funds. The format of a cost allocation plan is
specified by 4 5 CFR §95.507, which also calls for written agreements
between state agencies. Existence of such a plan will be an item of
audit.
(b) Direct costs are charged
to the specific services that incurred them. It is the indirect/overhead costs
that are allocated to the specific fund. If there is more than one project
within a fund, there must be a written plan to distribute fund costs among the
projects. Within this project, there are two types of indirect costs. The first
are those that can be associated with the services that are provided, such as
an assessment at the central office that verifies the quality of service. This
cost can be prorated to each service by some method that is described in
writing. This first type of cost qualifies for the federal match benefit
percentage. The second type of allocated cost falls under the administration
definition. For example, a mail distribution clerk that distributes to all
programs. This second type has a federal match of 50/50; therefore, both types
must be accounted for separately.
(c) Contracts which are used for procuring
services from other governmental agencies must be cost-allocated. As a minimum,
these contracts should meet requirements of 4 5 CFR §95.507 ; these
contracts must indicate:
1. "The specific
services being purchased."
2. "The
basis upon which the billing will be made --(e.g., time reports, number of
homes inspected, etc.)."
3. "A
stipulation that the billing will be based on actual cost incurred." This is
not a requirement for nongovernmental agencies. For governmental agencies, the
billing should be either actual cost or an agreed upon fixed fee approximating
actual cost which will be adjusted to actual cost at completion of the fiscal
year.
Author: Monica Abron, Associate Director, LTC
Program Management Unit
Statutory Authority: 42 CFR Part 441 ; 45 CFR
§95 ; OMB Circular A-87, Subpart G; The Home-and Community-Based Waiver
for the Elderly and Disabled.