New Jersey Administrative Code
Title 10 - HUMAN SERVICES
Chapter 66 - INDEPENDENT CLINIC SERVICES
Subchapter 4 - FEDERALLY QUALIFIED HEALTH CENTER (FQHC)
Appendix C

Current through Register Vol. 56, No. 6, March 18, 2024

New FQHC Medicaid Cost Reports for First and Second Years of Operation

Cost Report--Instructions for FQHCs that become Medicaid providers on and after November 1, 2001. These cost report instructions are for the first and second calendar years that the FQHC is a Medicaid provider. The FQHC's first year as a Medicaid provider may represent less than a full year of operation, but is counted as a full year for cost reporting, and a cost report is due to the Division for this period, ending on December 31 of the initial year.

Each Federally qualified health center (FQHC) participating as an independent clinic provider in the Medicaid/NJ FamilyCare program shall complete a cost report, as indicated at N.J.A.C. 10:66-1.5(d). This requirement is necessary to determine the amount of reimbursement to be paid to the FQHC for services provided to Medicaid/NJ FamilyCare beneficiaries.

All Worksheets, Statistical Information, and a Certification Page must be completed as appropriate. Additional documentation in the form of sub-worksheets etc. may be provided by a FQHC to support a particular cost or reclassification, adjustment to expenses, or other item(s). Calculations requiring a percentage shall be carried to five decimal places.

The completion of a cost report serves as the basis for an FQHC's interim reimbursement rate and the total Medicaid or NJ FamilyCare-Plan A reimbursement due to an FQHC for services provided to Medicaid and NJ FamilyCare-Plan A beneficiaries.

A copy of the Medicare cost report and the FQHC's audited financial statements shall be submitted with the Medicaid cost report.

Following are the cost report forms and instructions for their proper completion:

FQHC-2001-07 (Certification)--(i) (ii)

COMPLETION INSTRUCTIONS

Certification statement:

Enter the full name of the FQHC and the reporting period covered by the report. Note: Enter the signature of the officer/owner of the FQHC and his or her title and date after the completion of the cost report.

FQHC-2001-07 (Reclassification and Adjustment of Trial Balance of Expenses)--(Worksheet 1)--(iii)(iv)(v)

COMPLETION INSTRUCTIONS:

Worksheet 1 is used to record the trial balance of expense accounts from the books and records of the center for the year being reported. This worksheet provides for any adjustments or reclassifications to the FQHC's cost centers that may be required.

The order of the cost centers is designed to flow to subsequent worksheets, where applicable, to aid in the cost report preparation. It is recognized that not all of the cost centers will apply to every FQHC. For example, not every facility will offer dental services. Where a cost center is listed that does not apply, leave that center blank.

Blank lines for use by the center are provided wherein a unique cost center or situation may exist. If these are used, the center must identify what specific cost (center/service) are included.

Columns 1 and 2--Compensation and Fringe Benefits:

The compensation and fringe benefit expenses recorded on the books of the center, for the period of the cost report, are to be entered on the appropriate cost center lines. These expenses come directly from the trial balance of the center without adjustment. Any needed reclassification or adjustment must be recorded in columns 5 and 7, as appropriate.

Columns 1 and 2, Line 23--Pneumococcal and Influenza Vaccine Services

The amounts for this line will be taken from the Medicare Cost Report, Supplemental Worksheet B-1. If a FQHC is not required to complete a Medicare Cost Report, Supplemental Worksheet B-1 must be completed as an attachment to the Medicaid cost report. Supplemental Worksheet B-1 is the mechanism for Medicaid and NJ FamilyCare reimbursement of pneumococcal and influenza vaccine services.

Column 1, Line 23, Compensation--Enter the amount of "Pneumococcal and Influenza Vaccine Health Care Staff Costs" From Line 3 of the Medicare Cost Report, Supplemental Worksheet B-1. These amounts are excluded from the totals calculations, as they are not subject to cost limitations.

Column 2, Line 23, Fringe Benefits

Leave Blank, the amounts from fringe benefits are included in Column 1.

Column 3--Other:

Enter the expenses of the various cost centers that are not compensation or fringe benefits. These expenses come directly from the trial balance of the center without adjustment. Any needed reclassification or adjustment must be recorded in columns 5 and 7, as appropriate.

Column 3, Line 23, Other

Enter the amount of "Medical Supplies Cost--Pneumococcal and Influenza Vaccine" from line 4 of the Medicare Cost Report, Supplemental Worksheet B-1.

Column 4--Sub-Totals:

The sum of columns 1, 2 and 3, for each line is entered here.

Column 5--Expense Reclassifications:

Enter any reclassification among cost centers in column 4 which are necessary to effect proper cost recognition and allocation. Reclassifications are to be used when the expenses of a particular cost center are applicable to more than one of the cost centers listed on the worksheet, and are maintained in a single cost center on the books and records of the center. For example, where a physician performs certain administrative duties, the appropriate portion of his or her compensation and fringe would need to be reclassified from the "Physician" cost center to "Administrative Costs Staff--Administration" cost center. Thus, his or her administrative time (cost) would be properly recognized.

Worksheet 1, Page 2-3, Line 59 Medical Records

Enter costs associated with Medical Records in Columns 1, 2 and 3. In Column 5, reclassify any or all amounts to appropriate Core or Specialized Services categories. Appropriate schedules detailing the method of allocation must be maintained for audit purposes.

Worksheet 1, Page 3-3, Line 79 Insurance--Malpractice

Enter costs associated with Insurance--Malpractice in Columns 1, 2 and 3. In Column 5, reclassify any or all amounts to appropriate Core or Specialized Services categories. Appropriate schedules detailing the method of allocation must be maintained for audit purposes.

Introduction to Column 6:

All reclassifications shall be specifically identified via supporting schedules to the cost report as prepared by the center. The supporting schedules must provide an appropriate explanation to each of the affected cost centers. Any reduction of expense is to be shown in < >angle brackets. The net total of the supporting schedule and column must equal zero.

Worksheet 1, Support Schedule A is to be used for all reclassifications. See instructions for specifics of this schedule.

Column 6--Reclassified Trial Balance:

This column is the total of column 4, plus or minus column 5. The total of column 6, all pages, as found on Worksheet 1, line 108, Total Center Costs, must equal that of column 4, line 108, Total Center Costs.

Column 7--Adjustments (Decreases/Increases):

Enter the amount of any adjustment to the center's reclassified trial balance expenses. Adjustments are required to adjust (increase or <decrease>) actual expenses in accordance with Medicaid and NJ FamilyCare rules on allowable cost. An example of a situation in which adjustment to expense would be required is where the clinic receives an allocation from a central (home) office, has a practitioner assigned by the National Health Service Corps, or the identification of pneumococcal vaccine administration costs.

All adjustments reflected in column 7 shall be detailed on a supporting schedule prepared by the clinic. The schedule shall provide an explanation or rationale for the adjustment, whether the adjustment basis is cost or amount received and the identification of any and all cost centers affected.

Worksheet 1, Support Schedule B is to be used to document and detail the adjustments contained in column 7. See instructions for specifics of this schedule.

Column 8--Adjusted Net Expenses:

This column is used to combine the reclassified trial balance amounts in column 6 with the adjustment amounts found in column 7 by individual cost center. The amounts resulting in column 8 will be used in later schedules in the determination of reimbursement of cost for services rendered to Medicaid and NJ FamilyCare beneficiaries.

FQHC-2001-07 Worksheet 1 Support Schedule A--Reclassifications--(vi)

COMPLETION INSTRUCTIONS:

This supporting schedule is designed to document any reclassification of cost performed on the Trial Balance of Expenses, column 4. A full explanation of the reclassification must accompany each reclassification. A letter code (A), (B), (C), etc., should be used to identify each reclassification shown. This will enable identification of reclassifications, should this be necessary. An example of a reclassification would be the identification of the administration and the pharmaceutical expenses for pneumococcal vaccine. Cost could be reclassified from pharmacy and the physician assistant cost centers to the pneumococcal vaccine services cost center.

For every cost amount reclassified, a specific cost center (columns 3 or 6) and line (columns 4 and 7) must be recorded. Increases are to be identified in columns 3, 4 and 5, with decreases shown in columns 6, 7 and 8. The totals of column 5 and column 8 must equal.

FQHC-2001-07 Worksheet 1 Support Schedule B--Adjustments to Expense Detail--(vii)

COMPLETION INSTRUCTIONS:

This supporting schedule is used to provide the necessary detail for all adjustments, either (decreases) or increases, affecting cost centers on Worksheet 1, Pages 1, 2 and 3.

A full explanation of the adjustment is to be entered in column 1. In column 2 an alpha identifier of either C (cost) or R (revenue) should be entered. This designates the amount of the adjustment as either a revenue (received) offset or an actual cost offset.

An example of a revenue offset would be the revenues received from the operation of a vending machine in the center. The revenue received should be offset against the cost of providing the service. An actual expense offset would be made where the cost could actually be determined, such as when an adjustment to depreciation is necessary due to an independent audit firm finding.

The total of column 3 must agree to the total found on Worksheet 1, line 108, column 7.

FQHC-2001-07 Worksheet 2 ENCOUNTERS--(viii)

COMPLETION INSTRUCTIONS:

General:

Worksheet 2 is used by the center to summarize the total encounters actually occurring during the cost reporting period. The form is divided into two primary sections, that of core services, and that of other ambulatory services. Space has been provided in the other specialized service area for a service that may be unique to a center and not specifically identified.

It should be noted that some services are specifically identified under the specialized services category, yet they would be provided by a physician, such as subdermal contraceptive implants, and would be considered physician services. However, for purposes of reporting and to uniquely track these expenses for rate establishment, they are to be identified separately and the encounter associated with these services shown under their specific category. For subdermal contraceptive implant services, line 15, the number of subdermal contraceptive implant insertions/removals are to be recorded. The actual visit should not be included in the Physician Cost Center, line 1, column 2.

While care has been taken to account for the variety of services provided in a center and establish a corresponding service line, blank lines have been provided for reporting of additional special service centers and associated cost. Refer to N.J.A.C. 10:66-4.1(a) for the appropriate definition of a medical encounter.

Column 1, Medicaid Fee-for-Service--Enter in the appropriate service category the number of actual, valid Medicaid and NJ FamilyCare fee-for-service encounters. On line 16, enter the number of Medicaid and NJ FamilyCare fee-for-service pneumococcal and influenza vaccine injections.

Column 2, Medicaid Managed Care--Enter in the appropriate service category the number of actual, valid Medicaid and NJ FamilyCare Managed Care encounters for which cost-based reimbursement is allowable. On line 16, enter the number of allowable Medicaid and NJ FamilyCare Managed Care pneumococcal and influenza vaccine injections. If data is entered into this Column the FQHC is required to complete Worksheet 2, Support Schedule A.

Column 3, Medicaid Total Encounters--Total of Columns 1 and 2.

Column 4, Managed Care Encounters--Enter in the appropriate service category the number of encounters provided to managed care beneficiaries who are not eligible for cost-based reimbursement. Include in these numbers any managed care encounters provided to Medicaid and NJ FamilyCare beneficiaries which are not allowable for cost-based reimbursement in Column 2. On line 16, enter the number of pneumococcal and influenza vaccine injections.

Column 5, New Jersey Department of Health--Enter in the appropriate service category the number of encounters provided under letter of agreement with the New Jersey Department of Health. This amount must include the base level visits assigned by the New Jersey Department of Health. On line 16, enter the number of pneumococcal and influenza vaccine injections provided under agreement with the New Jersey Department of Health.

Column 6, Medicare--Enter in the appropriate service category the number of Medicare encounters. On line 16, enter the number of Medicare pneumococcal and influenza vaccine injections.

Column 7, Self-Pay--Enter in the appropriate service category the number of encounters provided to individuals who are either personally liable or have private insurance. On line 16, enter the number of Self-Pay pneumococcal and influenza vaccine injections.

Column 8, Other--Enter in the appropriate service category the number of encounters which have not been previously reported. On line 16, enter the number of Other pneumococcal and influenza vaccine injections.

Line 7 All Columns:--Enter the sum of lines 1 through 6, Core Services--all columns.

Line 26 All Columns:--Enter the sum of lines 10 through 25 for each column as appropriate.

Line 28 All Columns:--Enter the sum of lines 7 and 26. Cross foot all columns to column 7.

FQHC-2001-07 Worksheet 2 Support Schedule A--Medicaid Managed Care Encounter Detail--(ix)

COMPLETION INSTRUCTIONS:

Column Headings (1-9)--Enter the name of each Managed Care Company with which the FQHC contracts. If the FQHC is under contract with more than nine Medicaid and NJ FamilyCare HMOs, additional pages/columns must be included. Enter in the appropriate service category the number of actual, valid Medicaid and NJ FamilyCare Managed Care encounters provided for each Managed Care Company. On Line 16, enter the number of Medicaid and NJ FamilyCare Managed Care pneumococcal and influenza vaccine injections.

FQHC 2001-07--Worksheet 2--Support Schedule B-Medicaid Managed Care Receipts Detail-(x)

COMPLETION INSTRUCTIONS:

Line 1--Enter the name of each Managed Care Company with which the FQHC contracts in Columns A through K. If the FQHC is under contract with more than ten Medicaid and NJ FamilyCare HMOs, additional pages/columns must be included.

Line 2 Enter the effective date of the contract with each managed care company entered on line 1.

Lines 3 through 9--Enter the receipts received to date for the services provided to Medicaid and NJ FamilyCare beneficiaries for the period covered by the cost report.

Line 10--Enter the total of the amounts entered in lines 3 through 9.

Line 11--Enter the total of the amounts entered in line 10, columns F and L.

FQHC-2001-07 Worksheet 3--PRODUCTIVITY SCREENING--(xi)

COMPLETION INSTRUCTIONS:

This Worksheet is used to determine if the productivity screens of the various core and other services are being met. It develops the various encounters that will be used in the determination of an encounter rate for each core and specialized service. Additionally, it reflects the numbers of staff assigned to each of the areas. Completion of Worksheet 3 requires completion of Worksheets 6, 7 and 8.

Columns 1 and 1a--Number of FTEs and Total Hours--Staffing is to be reported by FTEs and hours worked. FTEs should be reported using the method prescribed by Medicare for the Medicare FQHC Cost Report (CMS-222-92) Worksheet B, Part 1. For FQHCs that file a Medicare Cost Report with Medicare, FTEs should match the FTEs reported on the Medicare FQHC Cost Report (CMS-222-92), Worksheet B, Part 1 for Physicians, Nurse Practitioners, Clinical Psychologists and Clinical Social Workers.

Column 2--Total Encounters--The total number of encounters reported in Column 2 should be taken from the corresponding line in Worksheet 2, Column 9.

For Pneumococcal/Influenza Vaccine Services, line 16, the number of injections given are to be shown in this column.

Column 4--Minimum Encounters:--The result of multiplying column 1 by column 3 for all service lines is to be entered here. The resultant is the minimum encounter requirement for the appropriate center (Productivity Screen).

Column 5:--Enter here the greater of column 2 or column 4 for all services. This will reflect the productivity standard application where applicable and the resultant will be used for development of the actual per encounter rate on subsequent worksheets.

FQHC-2001-07--Worksheet 4 Encounter Rate Calculation--(xii)

COMPLETION INSTRUCTIONS:

General:--This worksheet is used to determine the per visit encounter rate by specific service category that is to be used in the Medicaid and NJ FamilyCare reconciliation process on Worksheet 5.

Part I:--Item (A) total actual facility direct health service cost is calculated from taking Worksheet 1, line 36 column 8 plus the sum of Worksheet 1, lines 52 and 56, column 8.

Part I: Item (B) Allowable Administrative costs. Item (B) is reported as the LOWER of:

Worksheet 1, Line 71, Column 8 plus Worksheet 1,

Line 89, Column 8

or

30 percent of Total Center Costs from Worksheet 1,

Line 108, Column 8

Part I: Item (C) Allowable Facility Overhead Cost is calculated from adding Item (B) Allowable Administrative Costs, PLUS, Worksheet 1, Line 103, Column 8.

Part II--Specialized Services

Column 1--Direct Cost:

Transfer to the appropriate line the total cost of each specialized service area as found on Worksheet 1, Page 1, column 8. Note: The total expense of the dentist/dental hygienist is the sum of worksheet 1, lines 17 and 18 column 8.

Column 2--Ratio of Special Service Center to Total Direct Health Services:

Enter here the resultant of column 1 of this section divided by the total facility direct health service cost (Worksheet 4, Part I, Item (A)). The percentage derived will be the percentage of each of the special service centers direct cost to total cost. Remember to carry all decimal figures to five places.

Column 3--Facility Overhead Applicable to the Special Service Center:

Enter here the percentage shown in column 2 of this section multiplied by Worksheet 4, Page 1-2, Part I, Item (C). The amount derived is the percentage of allowable facility overhead attributed to the individual special service cost center.

Column 4--Total Cost of Special Service Cost:

Enter the sum of column 1 and 3 of this section for each special service cost center. This amount reflects the total calculated cost for each of the special service cost centers.

Column 5--Productivity Screening Encounters

Enter the productivity screening encounters from Worksheet 3, Page 1, column 5 for each special service cost center. Amount shown as Total should agree to Worksheet 3, Page 1-1, column 5, line 26. The visits for subdermal contraceptive implants are the actual subdermal contraceptive implant procedures done, and the

Pneumococcal/Influenza Vaccine line, will reflect the actual number of injections given as shown on Worksheet 3, Page 1-1, lines 15 and 16, respectively, column 2. Dental/Dental Hygienist encounters are the sum of Worksheet 3, line 10 and line 11, column 5.

Column 6--Computed Encounter Rate:

Divide column 4 by column 5 and enter the answer here. This is your computed encounter rate for each specialized service to include direct and allowable facility overhead costs.

FQHC-2001-07--Worksheet 4 Encounter Rate Calculation--(xiii)

COMPLETION INSTRUCTIONS:

Part III--Core Services:--The function of this Part of Worksheet 4 is to isolate the cost of direct core and other health service costs and to allocate overhead based on the ratio of these costs to total direct health care service costs. This amount is then divided by the total number of Core Service encounters to arrive at an average Per Encounter Rate for the facility.

Line 15:--The amount from Worksheet 4, Page 1-2, Part I, Item (A) is transferred to this line.

Line 16:--The total direct cost of specialized services is transferred to this line from Worksheet 4, page 1-2, Part II, line 14, column 1.

Line 17:--The non-reimbursable cost center's expenses, as found on Worksheet 1 Trial Balance of Expense, line 56, column 8, are transferred to this line.

Line 18.--Add amounts appearing on line 16 and line 17 and place resulting figure here.

Line 19:--Subtract line 18 from line 15 and enter remainder here.

Line 20:--Divide line 19 by line 15 to determine percentage of direct core and other health service cost to total health service cost.

Line 21:--Enter the allowable facility overhead from Worksheet 4, Page 1-2, Part I, Item (C).

Line 22:--To determine the amount of allowable facility overhead applicable to direct Core and other health services multiply line 20 by line 21. Enter the resultant here.

Line 23:--Enter the sum of line 19 plus line 22. This is the total direct and allocated core and other health services reimbursable cost.

Line 24:--Enter the total core service encounters from Worksheet 3, Page 1, line 7, column 5 on this line.

Line 25:--Divide line 23 by line 24 to obtain the average cost per encounter for core services.

FQHC-2001-07--Worksheet 5 Final Settlement Determination--(xiv)

COMPLETION INSTRUCTIONS:

General:--This worksheet will determine the actual total reimbursable cost for all Medicaid and NJ FamilyCare encounters for services rendered during the cost reporting period and the final settlement amount either due to or from a facility.

All Services--Lines 1 through 13:

Column 2:--For each of the line items, enter the Medicaid-covered and NJ FamilyCare encounters from Worksheet 2, Page 1-1, column 3, as appropriate. These amounts should agree with the facility's State-produced summary report for the same period as that of the cost report. The encounters produced in the State's summary report will represent the maximum encounters to be reimbursed.

Line 1:--Enter the figure from Worksheet 2, Page 1-1, line 7, column 3.

Lines 2-12:--Enter the figures from the appropriate line item on Worksheet 2, Page 1-1, column 3.

Column 3:--Enter the computed encounter rate for each applicable line item from Worksheet 4, Page 1-2, column 6, (Specialized Services) or Worksheet 4, Page 2-2, line 25, (Core Services).

Column 4:--To determine the Medicaid and NJ FamilyCare reimbursable cost for each type of service, multiply the amounts found in column 2 by column 3. Enter the result here.

Line 13:--For columns 2 and 4, enter the sum of lines 1 through 12. Column 4, line 13, is the total paid Medicaid or NJ FamilyCare encounters and costs for services provided by the facility for the period covered by the cost report.

Line 14: requires no entry

Line 15, Rate Periods--Identify the periods for which different limits apply during an FQHC's fiscal year.

Period 1:--Period 1 will be from the first day of the FQHC's fiscal year through the earlier of: