Arizona DSC Annual Medicaid Cost Report and Cost Settlement Training

Arizona DSC Annual Medicaid Cost Report and Cost September 2012 Local Education Agency (LEA) Training Guide Public Consulting Group, Inc. September 2012 Page 1

Table of Contents Medicaid Cost Reporting and Claiming System (MCRCS): Medicaid Cost Report... 3 I. Accessing the Annual Medicaid Cost Report... 4 Il. Annual Payroll Information... 7 IIl. General and Statistical Information...10 Individualized Education Program (IEP) Ratio:...11 Specialized Transportation Trip Ratio:...12 Specialized Transportation Vehicle Ratio:...13 IV. Transportation Payroll Information...14 V. Transportation Other Costs...17 VI. Transportation Equipment Depreciation...20 VII. Salary and Benefit Summary Report...22 VIII. Annual Edits...24 IX. Costs Summary Report (Medicaid Cost Report Certification)...27 X. Certified Public Expenditures (CPE) Form...30 Medicaid Cost Reporting and Claiming System (MCRCS): Cost Settlement... 34 Public Consulting Group, Inc. September 2012 Page 2

Medicaid Cost Reporting and Claiming System (MCRCS): DSC Annual Medicaid Cost Report Public Consulting Group, Inc. September 2012 Page 3

I. Accessing the DSC Annual Medicaid Cost Report To access the Medicaid Cost Reporting and Claiming System (MCRCS), open an Internet browser and enter: https://costreporting.pcgus.com/az. The username is the e-mail address submitted to Public Consulting Group (PCG). New user passwords will be sent via an auto-generated email from MCRCS. New users will be prompted to reset their password and create a security question after logging in for the first time. Select the Log In button after entering the username and password. Note: If a password is forgotten, select the Forgot Password link. Provide a correct response to a security question. The system will then send a password to the user. If the user still has difficulty logging in, contact 1-877-877-8011. Public Consulting Group, Inc. September 2012 Page 4

Once logged in, the Dashboard will appear. The dashboard displays important due dates, training information, and resources. The user can navigate through the various sections of MCRCS using the menu bar at the top. To access the Medicaid Cost Report, the user will select the Medicaid Cost Report link at the top of the menu screen. Public Consulting Group, Inc. September 2012 Page 5

Once the user has selected the Medicaid Cost Report link, the following screen will appear: The different links on this page are distinct sections of the DSC Annual Medicaid Cost Report. Information throughout this guide will provide detail on each individual section. Public Consulting Group, Inc. September 2012 Page 6

Il. Annual Payroll Information On the main Medicaid Cost Report page, several reporting categories will display including: Annual Payroll Information, General and Statistical Information, Transportation Payroll Information, Transportation Other Costs, Transportation Equipment Depreciation, Salary and Benefits Summary Report, Annual Edits, Cost Summary Report, Annual Certification and Cost Settlement. Select the Annual Payroll Information link. Once the Annual Payroll Information page is selected, a list of all direct medical service providers will appear. These individuals are those direct medical service and personal care providers from the Staff Pool List (SPL) submitted each quarter by the LEA. All non-payroll information for these individuals is aggregated from the information captured in the quarterly reports, such as Name, Job Category, and Employee ID. Note: Payroll information reported on the DSC Annual Cost Report must be based on an accrual accounting methodology. Under an accrual based accounting methodology, expenses are recorded at the time in which the service occurs, rather than when the payment occurred. To ensure accurate reporting under federal and state guidelines, and to prepare for an audit, the LEA must have comprehensive documentation on file to support all information reported (payroll information, asset ledgers, etc.). Public Consulting Group, Inc. September 2012 Page 7

Once Annual Payroll Information is selected, the user will see the following screen: Note- If the user has not yet entered salary and benefits costs on the DSC Annual Medicaid Cost Report, all figures will be zero until entered. Descriptions of the Annual Payroll fields are provided below: Last Name: This information is pre-populated by PCG. First Name: This information is pre-populated by PCG. Job Category: This information is pre-populated by PCG. JS: These two letters represent the July, August, and September quarter. This column indicates whether or not the individual was listed on the SPL for the particular quarterly period. If the column is marked with a 1, the individual was included on a SPL for the particular quarterly period. If the column is marked with a 0, the individual was not included on the SPL for the particular quarterly. (For FY12, the JS quarter is comprised of staff listed on the OD11 SPL. For all prospective fiscal years, the JS quarter will utilize the SPL from the AJ quarter from the previous fiscal year.) OD: These two letters represent the October, November, and December quarter. This column indicates whether or not the individual was listed on the SPL for the particular quarterly period. If the column is marked with a 1, the individual was included on the SPL for the October through December quarterly period. If the column is marked with a 0, the individual was not included on the SPL for the October through December quarterly period. Public Consulting Group, Inc. September 2012 Page 8

JM: These two letters represent the January, February, and March quarter. This column indicates whether or not the individual was listed on the SPL for the particular quarterly period. If the column is marked with a 1, the individual was included on the SPL for the January through March quarterly period. If the column is marked with a 0, the individual was not included on the SPL for the January through March quarterly period. AJ: These two letters represent the April, May, and June quarter. This column indicates whether or not the individual was listed on the SPL for the particular quarterly period. If the column is marked with a 1, the individual was included on the SPL for the April through June quarterly period. If the column is marked with a 0, the individual was not included on the SPL for the April through June quarterly period. Cost Pool: This column details the cost pool the individual was listed under (Direct Medical Service or Personal Care Providers). Staff Employment Status: This information is pre-populated by PCG. District Job Title: This information is pre-populated by PCG. District Employee ID: This information is pre-populated by PCG. Paid Hours: This field will be blank and populated by the LEA user (optional field.) Salaries: This field will be blank and populated by the LEA user. Benefits: This field will be blank and populated by the LEA user. Purchased Professional Services (PPS) Costs: This field will be blank and populated by the LEA user. Compensation Federal Revenues: This field will be blank and populated by the LEA user. Gross Compensation Expenditures: This information will be calculated by the system. Net Compensation Expenditures: This information will be calculated by the system. Note: Compensation Federal Revenues should always be entered in the system as a positive number. It will be subtracted from the Gross Compensation amount to show a Net Compensation Expenditure amount. Public Consulting Group, Inc. September 2012 Page 9

IIl. General and Statistical Information To access the General and Statistical Information portion of the Medicaid Cost Report, the user will select the Medicaid Cost Report link at the top of the menu screen. The user will then select the General and Statistical Information link. Once selected, this page will appear: Public Consulting Group, Inc. September 2012 Page 10

Several categories of the information on the General and Statistical Information page have been pre-populated by PCG, including: the LEA s name, LEA s National Provider Identification Number (NPI), Medicaid Provider ID Number, Unrestricted Indirect Cost Rate, Direct Medical Service Time Study Percentages By Cost Pool, the Individualized Education Plan (IEP) Ratio, and the Transportation Ratios (if applicable). LEA Name: The name of the Local Education Agency. National Provider Identification Number (NPI): The NPI is a 10-digit identification number issued to health care providers by the Centers for Medicare and Medicaid Services (CMS). Medicaid Provider ID Number: The Medicaid Provider ID Number is the unique 9-digit Medicaid identification number assigned to LEA providers throughout the state of Arizona. Unrestricted Indirect Cost Rate (UICR): The UICR is the rate of indirect costs representing the expenses of doing business that are not readily identified within a particular grant, contract, or program, but are necessary for the general operation of the organization to conduct the activities it performs. This is a LEA specific rate calculated by Arizona Department of Education (ADE). Direct Medical Services Percentage: The direct medical service percentage is calculated by Public Consulting Group (PCG) from the results of the statewide quarterly Random Moment Time Study (RMTS). When the results of the RMTS are coded, specific codes identify (on average) how much time direct medical service providers spend performing direct medical services. The direct medical percentage is a statewide average rate and is not LEA specific. There are two percentages, one for all direct medical service providers, and one percentage for all personal care providers. Individualized Education Program (IEP) Ratio: The numerator of the IEP Ratio is calculated by PCG and AHCCCS. This number is the unique count of Medicaid Eligible special education students with a related medical service prescribed in their IEP. Students will only be counted once regardless of the number of services they may have received. The count of students making up the denominator of the IEP ratio will be provided by the LEA. This number is the unique count of special education students with a related Public Consulting Group, Inc. September 2012 Page 11

medical service prescribed in their IEP, including both Medicaid eligible and non- Medicaid eligible students. Students will only be counted once regardless of the number of services they may have received. The denominator is derived from the October 1 st student count reported to PCG for special education students that have direct medical services listed in their IEP. Both the numerator and denominator of the IEP ratio are pre-populated by PCG in MCRCS. Specialized Transportation Trip Ratio: If the LEA has entered any transportation costs associated with specialized transportation and/or general transportation, they will be required to complete the Specialized Transportation Trip Ratio. The numerator will be the total number of one-way trips for Medicaid eligible special education students with specialized transportation services documented in the IEP. Upon accessing the system for cost report entry and certification, the numerator of the Specialized Transportation Trip Ratio will be pre-populated with 0. This field, like the IEP Ratio numerator and denominator, is not editable by the LEA. This figure will be populated based on the LEA s direct service billing for transportation throughout the year, specifically the total number of paid one-way trips for Medicaid eligible students requiring specialized transportation services. The denominator of the Trips Ratio will be calculated by the LEA. The denominator should be the total number of one-way trips for all special education students (both Medicaid and non Medicaid) requiring specialized transportation services throughout the school year. To enter the denominator of the ratio, select Edit under the Specialized Transportation Trip Ratio section. Public Consulting Group, Inc. September 2012 Page 12

Once entered, select Update. Select Cancel if any information has been entered erroneously. Specialized Transportation Vehicle Ratio: The Specialized Transportation Vehicle Ratio is a required field for a LEA when any general transportation costs are reported. This is NOT a required field if the LEA reports all transportation costs as specialized transportation. This ratio is the percentage of vehicles used for the specialized transportation of special education students in comparison to all vehicles used by the LEA to transport students. A Specialized Vehicle is defined as an adapted special needs school bus, van or car that is designed to transport students with specialized transportation needs in their IEP. Example: A LEA does not discreetly capture fuel costs for specialized transportation vehicles. The LEA has documentation for the total amount spent for fuel for all vehicles but cannot separate how much of the cost pertains specifically to fuel consumed by general vehicles and/or specialized vehicles. In such case, the LEA would report the fuel costs as general transportation and enter the Vehicle Ratio. To calculate the Vehicle Ratio, the LEA would determine the number of specialized vehicles and the number of total vehicles in their fleet. If the LEA had fifty total vehicles (both regular and specialized) in their fleet and 10 were used for specialized transportation, the Vehicle Ratio would be reported as 10/50 Public Consulting Group, Inc. September 2012 Page 13

(20%). Fuel costs were reported for all vehicles (fifty) and 10 vehicles were used for specialized transportation. To complete this, please select Edit under the Specialized Transportation Vehicle Ratio section: Once Edit is selected, enter both the numerator (Total Number of Vehicles Used for Special Education Transportation Purposes) and the denominator (Total Number of Vehicles Used for Transportation Purposes) and select Update : Once entered, select Update. Select Cancel if any information has been entered erroneously. Upon completion of this, select Return to Report List on the upper left hand portion of the page to return to the main Medicaid Cost Report screen. IV. Transportation Payroll Information If the LEA has costs for individuals (Bus Drivers, Mechanics, and Mechanics Assistants) related to specialized transportation, these costs will be reported on the Transportation Payroll section of the report. To access the Transportation Payroll Information section of the Medicaid Cost Report, please select Transportation Payroll Information from the main Medicaid Cost Report page. Public Consulting Group, Inc. September 2012 Page 14

This will bring the user to the following screen: Transportation Payroll Staff are only reported on an annual basis on the DSC Annual Medicaid Cost Report. These individuals are not reported on a quarterly basis nor are they eligible to be selected for a RMTS. Only Bus Drivers, Mechanics, and Mechanics Public Consulting Group, Inc. September 2012 Page 15

Assistants are allowable. Bus Aides and/or Bus Monitors are NOT allowable, and cannot be reported. To add a Bus Driver, Mechanic, or Mechanics Assistant, enter their last name and first name in the appropriate category. Once the name is entered, please select their relative job category (Bus Driver, Mechanic, or Mechanic Assistant) from the Job Category drop down and their Staff Employment Status (Full Time or Part Time) from the drop down. Additionally, please enter the annual salary and benefit information in the appropriate fields. For each employee listed in the Transportation Payroll section (and all transportation costs), the LEA must also select Specialized Transportation or General Transportation. As a reminder, if a LEA can discreetly identify costs for specialized transportation only, specialized transportation should always be selected. If the LEA has costs they cannot discreetly identify as specialized transportation, costs should be reported as general transportation. Once completed, select Insert. Once all relevant Transportation Payroll Information has been inserted, the LEA will select Return to Report List on the upper left hand portion of the page to return to the main Medicaid Cost Report screen. Public Consulting Group, Inc. September 2012 Page 16

V. Transportation Other Costs In addition to reporting transportation payroll costs associated with special education transportation, the LEA also has the opportunity to enter other costs ( Transportation Other Costs ) related to special education transportation on the cost report. Transportation Other Costs includes costs associated with: Lease/Rental, Insurance, Maintenance and Repairs, Fuel and Oil, Major Purchases under $5,000, Purchased Professional Services-Transportation Services, and Purchased Professional Services- Transportation Equipment. To access this portion of the Medicaid Cost Report, please select Transportation Other Costs from the main Medicaid Cost Report page: Public Consulting Group, Inc. September 2012 Page 17

Once selected, the following page will appear: The top portion of this page is used to report costs associated with general transportation. The bottom portion of the page is used to report costs the LEA can discreetly identify as specialized transportation. To update costs for any category (categories are listed under the Description column), the LEA will select Edit : Once Edit is selected, the LEA will enter the annual gross costs under the Gross Costs column, along with identifying if any of this total amount was paid by federal funding in the Total Amount of Federal Funding column. Public Consulting Group, Inc. September 2012 Page 18

Once all relevant Transportation Other Costs information has been completed, select Update. The LEA user will then select Return to Report List on the upper left hand portion of the page to return to the main Medicaid Cost Report screen. Public Consulting Group, Inc. September 2012 Page 19

VI. Transportation Equipment Depreciation On the Transportation Equipment Depreciation section of the cost report, the LEA has the opportunity to report any depreciation costs related to special education transportation assets that cost more than $5,000. This includes busses, minivans, cars, and wheelchair lifts (if purchased separately from the vehicle). The annual depreciation is calculated by dividing the purchase price by the estimated useful life of the asset. This calculation will automatically occur within MCRCS once data elements are entered. However, the LEA will be responsible for entering the following categories including: Month/Year Placed in Service, Month/Year Removed From Service, Years of Useful Life, Cost, Federal Revenue, and Notes (optional). To access this portion of the cost report, select Transportation Equipment Depreciation from the main Medicaid Cost Report page: Public Consulting Group, Inc. September 2012 Page 20

Once selected, the following page will appear: If the LEA has costs for transportation assets exceeding a purchase price of $5,000 they would enter the information associated with this asset in each column. Once all of this information is completed, select Insert. Once the LEA user has individually entered depreciation costs for the relevant transportation assets, select Return to Report List on the upper left hand portion of the page to return to the main Medicaid Cost Report screen. Public Consulting Group, Inc. September 2012 Page 21

VII. Salary and Benefit Summary Report The Salary and Benefit Summary Report provides comprehensive detail of salary and benefit cost reported for direct service and personal care providers throughout the year (aggregated from the Annual Payroll Information page). To view this report, select Salary and Benefit Summary Report link. The following page will appear: Public Consulting Group, Inc. September 2012 Page 22

Once the LEA user has reviewed this section, select Return to Report List on the upper left hand portion of the page to return to the main Medicaid Cost Report screen. Public Consulting Group, Inc. September 2012 Page 23

VIII. Annual Edits Once all relevant information has been entered in the appropriate sections on the cost report, MCRCS analyzes the reported information and reviews it for common errors or concerns (referred to as Annual Edits ). To review the results of the system review, select the Annual Edits link. The Annual Edits page will appear: Public Consulting Group, Inc. September 2012 Page 24

This page will highlight any concerns, or Annual Edits, that were identified by the system. If no edits were identified, proceed to the Costs Summary Report Page. If edits were identified, address each one individually. There are 3 levels of edit checks in the system. Level 1: Will not allow information to be saved when entering it directly into the system. An error message will appear, describing the error and how to correct it. Level 2: An edit that flags something unexpected (see examples below.) The system will allow an explanation to be entered and saved. The Annual Edit page will flag any Level 2 edits. Level 3: The system will not allow this type of entry in the system. It must be corrected before certification occurs. The Annual Edit page will flag any Level 3 edits. Examples of common Annual Edits include: No annual payroll information (Level 2); Reporting salaries higher than expected thresholds (Level 2); Reporting more federal funding costs than total costs (Level 3). If an Annual Edit is identified, the user must make necessary revisions to resolve the issue or provide a typed explanation (provided in the system) as to why the reported information is accurate. PCG will follow-up with each LEA if the explanation does not clearly explain and in sufficient detail the triggered edit. In the screen shot below, a detailed explanation must be provided for why an individual reported under the Transportation Payroll page has a salary that exceeds $50,000. To provide an explanation, select Edit and type the explanation into the box labeled Salary Explanation; then, select Update. This will resolve the edit. Public Consulting Group, Inc. September 2012 Page 25

Once the user has addressed all Annual Edits with either an explanation or a correction, select Return to Report List on the upper left hand corner of the page to return to the main Medicaid Cost Report page. Public Consulting Group, Inc. September 2012 Page 26

IX. Costs Summary Report (Medicaid Cost Report Certification) The Cost Summary Report page on MCRCS summarizes all of the information reported. Under this page, the LEA user will certify their report. Select the Costs Summary Report link from the Medicaid Cost Report menu. This will bring the user to several sections, including the Direct Medical Services Salary and Benefits Summary by Service Type and Job Category, the Transportation Salary And Benefits Summary By Service Type And Job Category, the Direct Medical Services Total Costs Summary, and the Transportation Services Total Costs Summary. This information is aggregated from the information the LEA has reported on the Medicaid Cost Report pages. Public Consulting Group, Inc. September 2012 Page 27

Under the Direct Medical Services Total Costs Summary section the reported information from the LEA plus the LEAspecific Unrestricted Indirect Costs are apportioned by the Direct Medical Percentage (Direct Medical or Personal Care Provider percentages) and the IEP Ratio. This calculation determines the total Medicaid Allowable Costs for direct medical services. Under the Transportation Services Total Costs Summary section the reported information from the LEA plus the LEAspecific Unrestricted Indirect Costs are apportioned by the One Way Specialized Transportation Trip Ratio (always applied) and the Specialized Transportation Vehicle Ratio (only applied if general transportation costs are reported). This calculation determines the Medicaid Allowable Costs for transportation. Note- The below example shows the One Way Trip Ratio after the numerator has been populated. Public Consulting Group, Inc. September 2012 Page 28

The Cost Settlement calculation compares these costs, the Medicaid Allowable Costs for both direct medical and transportation services, against what the LEA received in interim payments throughout the year. Once the Cost Summary Report information has been thoroughly reviewed, select Click to certify Medicaid cost report on the bottom left hand corner of the page. After the LEA user selects the Click to certify Medicaid cost report button, the Medicaid Cost Report will be locked and certified. The information provided in the Medicaid Cost Report is ready for PCG to review. Once the report has been certified, please select Report to Return List on the upper left hand corner of the page to return to the main Medicaid Cost Report page. Following LEA certification, a comprehensive desk review process of the LEA s Medicaid Cost Report will take place. Additionally, the numerator of the IEP ratio along with the numerator of the Specialization Transportation Trip Ratio will be inputted by PCG based on direct service claiming activity from that fiscal year. Public Consulting Group, Inc. September 2012 Page 29

X. Certified Public Expenditures (CPE) Form Upon certification of the DSC Annual Medicaid Cost Report, the LEA will be required to verify their total reported claimed expenditures. This will take place by completing and returning the Certified Public Expenditures (CPE) form with original signature. To access the CPE form, select the Annual Certification page. Public Consulting Group, Inc. September 2012 Page 30

Once selected, the LEA user will be brought to the CPE form. This form lists the LEA s information and the Total Medicaid Expenditures submitted to AHCCCS for Medicaid School Based Claiming Services via the Medicaid Cost Report. Print this page. The Total Medicaid Expenditures Submitted to AHCCCS for School Based Medicaid Service is the total amount of costs the LEA reported on the Medicaid Cost Report. Once printed, the CPE form must be signed by the Superintendent, CFO, CEO, or Business Officer at the LEA. Complete the following fields on the CPE form: Signature of signer, printed/typed name of signer, title of signer, address of signer, phone number, fax number, e-mail, and date of signature. Additionally, indicate the position of the signer ( Signer Authority ). Public Consulting Group, Inc. September 2012 Page 31

After the CPE form has been signed, make a copy for the LEA s records. Public Consulting Group, Inc. September 2012 Page 32

Mail the original copy of the CPE form to the address below. The document may be scanned and e-mailed or faxed, but the LEA must mail the original copy to PCG. LEA Address Public Consulting Group Inc. 101 N 1 st Avenue, Suite 1800 Phoenix, AZ 85003 FAX: 602-324-5091 EMAIL: AZCostReport@pcgus.com Public Consulting Group, Inc. September 2012 Page 33

Medicaid Cost Reporting and Claiming System (MCRCS): Cost Settlement Public Consulting Group, Inc. September 2012 Page 34

Cost Settlement This section provides an illustration of the Cost Settlement Summary page. The Cost Settlement Summary link in MCRCS will be activated once PCG receives the Medicaid Interim Payment data and calculates the Cost Settlement results. The Cost Settlement process is based on the costs the LEA incurred during the cost reporting period for providing Audiology Services, Behavioral Health Services, Nursing Services, Occupational Services, Personal Care Services, Physical Therapy Services, Specialized Transportation Services, and Speech Language Pathology Services. These costs must be certified in MCRCS by the LEA prior to calculating the Cost Settlement results. Approving the Cost Settlement 1. Click on the Medicaid Cost Report link, and select Cost Settlement from the list. Once you click Cost Settlement Summary, the following report will appear: Public Consulting Group, Inc. September 2012 Page 35

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Review the following items on the Costs Settlement Summary: Total Medicaid Costs From Medicaid Cost Report: This figure is the sum of the total Medicaid costs the LEA reported in the Medicaid Cost Report by service type. The Final Medicaid costs are the costs eligible for cost settlement based on CISS interim payments received per service type. Total Direct Service Interim Payments Received: This figure is the total amount of interim payments the LEA received throughout the cost reporting period. Cost Settlement Federal Share Amount Due To Or From Provider: In the approved Medicaid State Plan Amendment, LEAs will only receive or payback the federal share amount of the cost settlement. Federal share amounts are calculated by subtracting the Total Direct Service Interim Payments Received from the Total Net Medicaid Allowable Costs. 2. Click the Approve button at the bottom of the page. Note: The user has the option to print the summary immediately after the report is approved, or go back into the MCRCS to print at any time. 3. Your cost settlement is now reconciled! Public Consulting Group, Inc. September 2012 Page 37

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The Cost Settlement Summary is composed of five sections. Each section of the Cost Settlement Summary is illustrated below in detail. Section 1 Total Medicaid Costs From Medicaid Cost Report Column B & C, Row S7: Physical Therapy costs (Column B, Row S7) are not included in the Cost Settlement because the LEA did not receive Interim Payments for Physical Therapy Services as indicated by the no in Column C, Row S7. Column B, Row S10: Rows S2+ S3+ S4+ S5+ S6+S7+S8+S9 = Sum of Column B, Row S10. Column D, Row S10: Rows S2+ S3+ S4+ S5+ S6+S7+S8 + S9= Sum of Column D, Row S10. Section 1 is composed of the annual financial expenditures certified in MCRCS. Section 1 includes four columns, consisting of Service Type, Total Medicaid Costs, Include in Medicaid Cost Settlement, and Final Medicaid Costs. The four columns are used to calculate the total amount used in the Cost Settlement calculation. Service Type (Column A): Itemized list of all reimbursable service types which include: Audiology Services, Behavioral Health Services, Nursing Services, Occupational Services, Personal Care Services, Physical Therapy Services, Specialized Transportation Services, and Speech Language Pathology Services. Total Medicaid Costs (Column B): Lists the sum of the total costs that the LEA reported in MCRCS by service type. Public Consulting Group, Inc. September 2012 Page 39

Include in Medicaid Cost Settlement (Column C): Indicates, yes or no, if a particular service type met the fee-for-service (FFS) Interim Payment requirement. The FFS Interim Payment requirement is that the LEA must have submitted and received payment for interim claims for each individual service type. If the column is marked yes, the Interim Payment requirement was satisfied, the service type costs are included in the Cost Settlement. If the column is marked no, the Interim Payment requirement was not satisfied and the service type costs are not included in the Cost Settlement. Final Medicaid Costs (Column D): Shows the costs reported that are included in the Cost Settlement calculation. These costs are restricted by the Interim Payment requirement. Only those costs for which the LEA received Interim Payments are included in the Cost Settlement calculation. Notice, in the example above, the LEA did not meet the Interim Payment requirement for Physical Therapy Services though the LEA reported costs for these service on the Medicaid Cost Report, as indicated by the word no in Column C, Row S7; therefore, the $106,344.59 reported on MCRCS for Physical Therapy Services will not be included in the Cost Settlement. Section 2 Federal Medical Assistance Percentage Section 2, Federal Medical Assistance Percentage (FMAP): The federal government reimburses states for a portion of their allowable expenditures. This reimbursement is calculated according to the Federal Medical Assistance Percentage (FMAP). The FMAP for Arizona school-based Cost Settlement is 67.30%. Section 3 Total Net Medicaid Allowable Costs Section 3, Total Net Medicaid Allowable Costs: This amount represents the product of the Final Medicaid Costs multiplied by the FMAP. This section includes one multiplication step in the Cost Settlement calculation, seen below. Total Net Medicaid Allowable Costs = Final Medicaid Costs x FMAP = (Section 1, Column D, Row S10) x (Section 2) = $3,167,640.86 x 67.30% = $2,131,822.30 Public Consulting Group, Inc. September 2012 Page 40

Section 4 Total Direct Service Interim Payments Received Column B, Row S10: Rows S2+ S3+ S4+ S5+ S6+ S7+S8 +S9 = Sum of Column B, Row S10. PCG receives claims data from the Medicaid Management Information System (MMIS). PCG populates the information into MCRCS. This section includes two main columns consisting of Service Type and Medicaid Interim Payments. The two columns are used to calculate Total Interim Payments Received by the LEA. Service Type (Column A): Itemized list of all reimbursable services types which include: Audiology Services, Behavioral Health Services, Nursing Services, Occupational Services, Personal Care Services, Physical Therapy Services, Specialized Transportation Services, and Speech Language Pathology Services. Medicaid Interim Payments (Column D): The sum amount paid to the LEA, separated by service type. These figures (Column B, Row S2 to Row S9) are the total amount that the LEA received in Interim Payments for services provided between July 1, 2011 and June 30, 2012. These payments are based on date-ofservice. Public Consulting Group, Inc. September 2012 Page 41

Section 5 Cost Settlement Federal Share Amount Due to or From Provider Section 5, Cost Settlement Federal Share Amount Due to or From Provider: This figure is the federal share amount that is owed to/from the LEA. If the figure is positive, the LEA will receive a payment. If the figure is negative, the LEA will owe this amount. The final section of the Cost Settlement Summary page calculates the difference between the Total Net Medicaid Allowable Costs and the Medicaid Interim Payments received by the LEA. Cost Settlement Federal Share Amount Due to or From Provider = Total Net Medicaid Allowable Costs Medicaid Interim Payments = Section 3 - (Section 4, Column B, Row S10) = $2,131,822.30 - $72,000.00 = $2,059,822.30 Public Consulting Group, Inc. September 2012 Page 42