15 Best Practices for Medicaid Cost Report LeadingAge Iowa. May 6, Background

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1 15 Best Practices for Medicaid Cost Report LeadingAge Iowa May 6, 2015 Background Health Care Reform plans to recover over $60 billion annually from waste, fraud and abuse Iowa s new Medicaid Cost Report is effective July 1 st LAI is having a two day presentation (June 2-3 rd ) on the new Medicaid cost report 1

2 Board of Directors Provide your Board of Directors with education relative to the changes in healthcare reform New Certification Statement makes clear that you need to understand and follow the rules. Criminal, civil and administrative fines and penalties Intention is get your board s support, understanding and resources Resources Commit the appropriate amount of resources in time and money to achieve an acceptable level of compliance Inexpensive insurance when compared to potential criminal, civil and administrative fine, penalties and attorneys and negative publicity 2

3 Provide Staff with On-Going Education Unallowable and limited costs know the rules Intention is to increase their awareness so that they appropriately capture this information in the accounting system as it is incurred General Ledger Chart of Accounts Expand to include a place to report unallowable and limited costs as well as to report revenues that must be used to offset costs Expand to include all of the revenues and expenses on the new cost report 3

4 False Claim and Fraud Training Provide your staff with education relative to what constitutes Fraud and what a False Claim is. The intention is to educate and scare them so that they take this seriously Education Re: Related Parties Provide staff with education so that they understand what constitutes a Related Party and to identify Related Party Transactions The intention is that this information be captured and recorded as incurred so that it can be properly reported at the end of the year 4

5 Analyze Each Cost Analyze each cost to determine whether it only benefits the nursing facility (direct cost) or whether it benefits the nursing facility as well as i.e.) independent, assisted living, etc. (joint cost) For each joint cost, determine the best statistic to allocate this cost. See IME acceptable allocations Keep your statistical records up to date in a fashion that can be easily audited by IME Acceptable Allocation Methods Understand which allocation statistics that IME considers allowable and which allocation statistic IME considers not allowable 5

6 General Ledger Mapping Every account in your general ledger needs to flow to the Medicaid cost report, i.e.) Mapped Know how your general accounts are mapped to the cost report Employees For each employee understand their duties and responsibilities and how those duties and responsibilities are reported on the cost report. The intention is that any duties and responsibilities that are attributable to unallowable/limited costs (marketing, advertising, fundraising et al) are identified and that the appropriated associated compensation costs are reported as unallowable/limited costs 6

7 No Estimates All costs and allocations must be supported with documentation. No estimates! For employees that means either time clocks or time surveys. There will be some exceptions that will use other allocation statistics (i.e. accumulated costs) Vendors Work with your internal purchasing as well as vendors to send you invoices that clearly indicate where the costs should be reported on the cost report 7

8 Internal Review Have an effective internal review process in place and functioning Errors After the Fact If errors are discovered after the cost report has been filed, consult an attorney and report them in writing immediately even if that cost report is several years old and has been finalized by IME. Not reporting errors, at any time, may result in criminal, civil or administrative fines and penalties 8

9 Signatories Those who sign the Medicaid Cost Report (Officers, Administrators, CFO s and external preparers) will need to understand the systems and process used to gather the information. Need to be able to sign without fear of criminal, civil or administrative liability 9