Current through Register Vol. 49, No. 18, September 16, 2024
PURPOSE: This rule establishes a uniform cost
reporting system to be used in reporting actual cost incurred in the operation
of residential care agencies. The uniform cost reporting system provides the
data necessary for the determination of the costs and rates associated with the
provision of foster care maintenance.
(1) Objectives. This rule establishes a
uniform cost reporting system to be used in reporting actual cost incurred in
the operation of residential care agencies. The Residential Care Agency Cost
Report included is one part of the two (2)-part process set forth by the State
of Missouri Department of Social Services in fulfilling the requirements for
identifying foster care maintenance related expenditures within residential
care agencies. The other part of the process involves participation in either a
time study or random moment sample to determine the portion of time direct care
staff spend performing foster care maintenance related activities.
(2) General Cost Reporting Principles.
Residential Care Agency Cost Report line specific reporting instructions are
included as an appendix to this rule included herein. The cost report must
include all costs incurred by the residential care agency. Costs included in
the report can be grouped/categorized in several different ways and are subject
to certain guidelines or requirements:
(A)
Costs directly attributable to a function or activity may be charged in their
entirety to that function or activity. Example: A staff person working in a
single function or activity may have one hundred percent (100%) of their time
charged to that function or activity.
(B) Costs not attributable to a single
function or activity must be distributed based on an appropriate allocation
methodology. Example: A staff person who spends a portion of their time working
for several different functions or activities should have their related cost
allocated across each program by some substantially documented
methodology.
(C) Some staff will
have their associated cost allocated through the application of activity-based
time study or random moment sample (RMS) results: All agency staff responsible
for the provision of direct daily supervision of children on a regular basis
will be included in the activity based allocation time study process. Those
staff that should NOT participate in the time study include:
1. Agency administration. It should be noted
that, in some agencies, an agency administrator might perform a significant
amount of direct care of residents. In these instances, the individual should
participate in the time study process.
2. Staff involved in the provision of a
single function such as the provision of counseling or therapy; medical
service; food preparation; cleaning; or facility maintenance.
(D) Costs are either considered
allowable or unallowable, based on federal definitions and guidelines, for
inclusion in the calculation of the residential foster care maintenance
rate.
(E) Costs must be net of
applicable credits when determining the portion attributable to the residential
foster care maintenance rate. Any credits to reported costs will be applied as
a function of the rate calculation process. Examples of applicable credits may
include, but are not limited to:
1. IV-E
training payments;
2. USDA
reimbursements;
3. Payments from
school districts or the Department of Elementary and Secondary Education for
the provision of educational services;
4. Reimbursements from the Department of
Social Services (DSS), the Department of Mental Health (DMH) or other third
party payors that offset reported costs such as, including but not limited to:
A. Reimbursements for the development of the
initial treatment plan, quarterly updates to the initial treatment plan and
other treatment planning services reimbursed by others;
B. Reimbursements for day treatment; and C.
Reimbursements for counseling or other therapeutic services.
5. Reimbursements for medical and
behavioral health services covered by the state's Medicaid State Plan (either
directly or indirectly through MC+Plans) including, but not limited to:
A. Physician's services;
B. Pharmacy-related services;
C. Psychology and counseling services; and D.
Targeted case management.
6. Other reimbursement from Medicaid or the
MC+plans for the provision of other medically necessary services.
7. Reimbursements for medical and behavioral
health services covered by other third party payors.
(3) Explanation of Common Terms.
To facilitate the completion of the cost report cost-related terms used
throughout the instructions are defined, and a brief explanation of their
application is given.
(A) Reported Costs. For
a cost to be included on the cost report it must meet the following general
criteria:
1. Be reasonable for the
performance of the activities of the agency;
2. Be accorded consistent treatment; and 3.
Be adequately documented.
(B) Reasonable. A cost is reasonable if, in
its nature or amount, it does not exceed that which would be incurred by a
prudent person under the circumstances prevailing at the time the decision was
made to incur the costs. Reasonable costs are further defined in OMB Circular
OMB A-87.
(C) Allowable. Allowable
costs are those costs that are generally considered eligible for federal
reimbursement based on the cost principles established in federal transmittals
such as OMB Circular A-87 or A-122. Appendix A gives a list of items that are
generally considered to be allowable. This is not an all-inclusive list and
other costs not listed may be allowable. Although a cost may be considered
ineligible for inclusion in the foster care maintenance rate based upon federal
rules, regulations, or guidelines. (See "Eligible Cost")
(D) Unallowable. A cost is unallowable for
reimbursement under, or claim to, any federal program based on established cost
principles. Appendix A includes a list of items considered to be unallowable.
All costs should be included on the cost report. Costs that are not allowable
based on the federal guidelines should be placed in the "Unallowable" column on
the cost report.
(E) Administrative
Cost. Refers to those costs related to general operation and management of an
agency or to those costs incurred in the support of multiple agency functions
or programs. Examples of administrative costs include, but are not limited to:
1. Executive direction and
supervision;
2. Bookkeeping and
fiscal management;
3. Secretarial
and clerical support;
4. Physical
plant management;
5. Staff training
(unless clearly related to a primary activity area); and 6. Related occupancy
costs.
(F) Allocation
Methodology. Documentation and/or description of the procedures/methods used to
distribute costs to programs and to the direct service categories on the cost
report. In general, costs should be allocated across the cost report's direct
service categories/activities if there is a clear delineation and documentation
for the allocation. Documentation must be maintained recording the methodology
and detailing the specific calculation used to distribute costs. The use of
estimates not based on a statistically sound methodology is
unacceptable.
(G) Applicable
Credits. The term applicable credits refers to those receipts, or reduction of
expenditures which operate to offset or reduce expense items that are allocable
to awards as direct or indirect costs. Typical examples of such transactions
are: purchase discounts, rebates or allowances, recoveries or indemnities on
losses, insurance refunds, and adjustments of overpayments or erroneous
charges. To the extent that such credits accruing or received by the
organization relate to allowable cost, they shall be credited to the federal
government either as a cost reduction or cash refund, as appropriate. In some
instances, the amounts received from the federal government to finance
organizational activities or service operations should be treated as applicable
credits. Specifically, the concept of netting such credit items against related
expenditures should be applied by the organization in determining the rates or
amounts to be charged to federal awards for services rendered whenever the
facilities or other resources used in providing such services have been
financed directly, in whole or in part, by federal funds. For rules covering
program income (i.e., gross income earned from federally-supported activities)
see Sec. 24 of Office of Management and Budget (OMB) Circular A-110, "Uniform
Administrative Requirements for Grants and Agreements with Institutions of
Higher Education, Hospitals, and Other Non-Profit Organizations."
(H) Random Moment Sample (RMS)/Time Study. A
time study or RMS is a statistically based process to gather information from
direct service child care staff members on how they spend their time. The
information collected will be used for distributing the cost of direct staff
among various activities. The results of this study are used to determine the
portion of the direct service providers cost related to foster care
maintenance.
(I) Eligible Cost. For
the purpose of determining the residential foster care maintenance rate, only
those costs incurred in the provision of the following items/activities will be
considered. The federal Department of Health and Human Services, Administration
for Children and Families has published guidance in this regard in the
Child Welfare Policy Manual Section 8.3.B.1. In general, this
includes the cost of, and the cost of providing, the following:
1. Food;
2. Clothing;
3. Shelter;
4. Daily supervision;
5. School supplies;
6. Personal incidentals;
7. Liability insurance with respect to the
child care;
8. Reasonable travel
for the child for visitation as defined within the Child Welfare Policy
Manual; and 9. Related administrative costs.
(4) Entities Covered by the Cost
Report. The Missouri Residential Care Agency Cost Report is to be used in
reporting actual costs incurred in the operation of residential care licensed
under the Department of Social Services, Division 40-Division of Family
Services, Chapter 71-Licensing Rules for Residential Care Agencies. Each cost
report establishes the portion of that agency's cost attributable to the
provision of foster care maintenance. Information from all reporting agencies
will be used, in aggregate, to establish foster care maintenance rates for each
of the following four (4) categories based upon Missouri licensing rules for
residential care agencies:
(A) Basic Core
Requirements;
(B)
Infant/Toddler/Preschool;
(C)
Residential Treatment (DFS Levels II and III); and
(D) Intensive Residential Care (DFS Level
IV).
(5) Reporting Period
and Filing Requirements.
(A) The cost report
must reflect actual audited costs incurred in the provision of residential
child care and related services by an agency for the most recent fiscal year.
Cost reports must be submitted in accordance with the applicable instructions
and in the cost report format prescribed in Appendix A, included herein.
Failure to provide cost reports may result in the residential care facilities
exclusion from contracts with the Children's Division.
(B) An annual cost report for fiscal years
ending after December 31, 2003 must be submitted within ninety (90) days of the
close of the fiscal year. The division may grant an extension for submission of
the annual cost report and/or audited financial statement. Cost reports which
have not been submitted for fiscal years ending in calendar year 2004 must be
submitted by August 15, 2005 on the current report format contained in Appendix
A. A wavier from filing a fiscal year 2004 cost report will be provided for
providers that will submit a fiscal year 2005 cost report by August 15,
2005.
(C) Audited financial
statements must be submitted with cost reports. An auditor's opinion does not
have to be provided on the cost report. A preliminary fiscal year 2005 cost
report may be submitted by August 15, 2005 without an audited financial
statement. A final report and audited financial statement must be submitted in
accordance with subsection (5)(B).
(D) Providers must also participate in the
statewide time study of direct care staff described in section (1).
(6) Record Retention. Records used
in support of costs reported on the cost report must be retained for a minimum
of three (3) years from the end of the rate year for which the report is
applicable. Records include, but are not limited to, financial, programmatic,
statistical, recipient records, and supporting documentation. If any
litigation, administrative review, claim, negotiation, audit, or other action
involving the records has been started before the expiration of the three
(3)-year period, the records shall be retained until completion of the action
and resolution of all issues which arise from it, or until the end of the
regular three (3)-year period, whichever is later. As part of the residential
foster care maintenance rate calculation process, the state and/or its
contracted representative may conduct reviews of the financial and programmatic
information used as the basis for completion of an agency's cost report. After
completion of any such review, a written report will be completed addressing
whether reported costs are adequately supported, allocated appropriately, and
reasonable in nature. Documentation created while completing the cost report
should be maintained recording the compilation of costs included in the report,
and any methodologies or calculations used in the allocation of
costs.
