Rates and Payments

Revised: February 10, 2025

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· Overview

· Provider Tax

· Cost Based Rates

· Assistive Technology Devices

· Special Transportation Rates

· All Other Health-Related Services

· Interim Rates and Final Rates

· Appeal Final Rates

· Reconciling Final Rates - Results

· Reporting cost data - Districts Responsibilities

· Payments

· Administration Fee

· Remittance Advice (RA)

· Legal References

Overview

Rates for the individualized education program (IEP) health-related services are paid a “cost based” per diem rate. The rate is based on the information in the Minnesota Department of Education (MDE) data system in distinct service categories that qualify for inclusion in the rate payment structure. School districts provide this information.

Provider Tax

Minnesota districts, as educational institutions, are exempt from paying the provider tax under Minnesota Statutes, 295.53, subdivision 1(a)(4). School districts do not need to file any form for this exemption per the Minnesota Department of Revenue.

Cost Based Rates

The Minnesota Department of Human Services (DHS) set the IEP interim and final rates. These rates are based on the actual costs incurred per local education agency (LEA) or school district in the provision of service to Medical Assistance (MA) eligible children in school districts in Minnesota.

Assistive Technology Devices

Districts are reimbursed the federal share of the invoiced price, rental costs or cost of repairs of the assistive technology devices approved by Minnesota Health Care Programs (MHCP).

Special Transportation Rates

· Rates are based on the information provided by the districts to MDE Uniform Financial Accounting and Reporting System (UFARS) and Minnesota Automated Reporting Student System (MARSS).

· Total special transportation costs include driver salaries, fringe benefits, gas, oil, insurance and maintenance.

· Supervision is covered under the district’s unrestricted indirect cost percentage.

The following steps determine the transportation rate.

1. Divide the total special transportation costs by the total number of membership days for children who receive special transportation. This number is the daily cost per child.

2. Divide the daily cost per child (determined in step 1) by two. This number is the trip cost per child.

3. Multiply the trip cost per child (determined in step 2) by the district’s unrestricted indirect cost percentage. This number is the indirect cost add-on.

4. Add the trip cost per child (determined in step 2) and the indirect cost add-on (determined in step 3). This number is the transportation rate.

Nursing and Personal Care Assistance (PCA) services provided to children who require nursing or PCA services in-route are covered under the appropriate service. These services are not included in the costs MDE reports to MHCP.

All Other Health-Related Services

Other health-related services for IEP include the following:

· Physical therapy (PT)

· Occupational therapy (OT)

· Speech and language pathology and audiology

· Mental health services

· Nursing services

· Personal care assistance services

· Interpreter services

Rates are based on the information districts provide to MDE’s Electronic Data Reporting System (EDRS), UFARS and MARSS, as well as the school data submitted to DHS through the IEP Annual Data Report form.

· Supervision and direction are included in the unrestricted indirect cost percentage.

· Supervision costs are not included in the costs reported to DHS by MDE.

The following steps determine the cost-based methodology for the services listed as other health-related services for IEP.

1. Divide the total salaries plus benefits by the total employment hours. This number is the average cost providing the IEP service.

2. Multiply the average cost (determined in step 1) by the direct MA service hours. This number is the total MA cost for IEP service

3. Divide the total MA cost (determined in step 2) by MA encounters. This number is the MA rate.

4. Multiply the MA rate (determined in step 3) by the district’s unrestricted indirect cost percentage. This number is the indirect cost add-on.

5. Add the MA rate (determined in step 3) and the indirect cost add-on (determined in step 4). This number is the IEP MA rate.

Interim Rates and Final Rates

· Districts are initially paid an interim rate, which is calculated using data from a previous year that are provided by MDE and districts.

· MHCP settle-ups with school districts with final rates after all cost data is reported, audited and submitted to MHCP and the billing window of one year from each date of service closes.

· Final rates are calculated using indirect cost percentage provided by MDE and the actual cost data reported by the districts to MDE and MHCP.

· Final rates are used to settle with districts on actual costs. Claims initially paid at the interim rate are reprocessed and paid at the final rate.

· Final rates become the new interim rates of the current school year. For example, final rates for fiscal year (FY) 2015-2016 were the interim rates for FY 2017-2018.

· Final rates are calculated after June 30 of the year following the school year in which services are provided. For example, final rates for FY 2016-2017 were completed fall 2018, since the billing window of one year from each date of service closed on June 30, 2018.

· Districts must bill, receive payment and report all accurate costs for final rates to be calculated. Final rates and new interim rates are set to $0 if any required data element is not reported.

· MHCP drops final and interim rate worksheets in the school district’s MN–ITS mailbox miscellaneous folder under file type IEP.

· DHS notifies school districts by email if new rate worksheets are dropped in the school district’s MN–ITS mailboxes.

· Final and interim rate worksheets are available 90 days from the date the worksheets are placed in the MN–ITS mailbox miscellaneous folder.

· IEP final and interim rate worksheets are identified by the IEP Rate File Name.

· The IEP final and interim rate file name includes the school district’s NPI number, the word IEP, the date when rates are placed in the MN–ITS mailboxes, the school district number, the type of IEP rate set and the covered fiscal year.

Appeal Final Rates

DHS notifies the districts of final rates by email. Review all of the submitted data and the final rates within 60 days.

To dispute the final rates:

· File a written appeal within 60 days from the date the notice was dropped in the school district’s MN–ITS mailboxes.

· List the disputed items, reasons for the disputes and the name and address of the contact person for the appeal.

Send the appeal to:
Minnesota Department of Human Services
IEP Services Rates Specialist
MN Department of Human Services
P. O. Box 64984
St. Paul, MN 55164-0984

· MHCP reprocesses claims with the correct adjusted rate when an appeal is resolved.

· DHS cannot accept appeals filed after 60 days.

· Claims are reprocessed with the final rates and will not be adjusted if no appeal is filed within 60 days.

Reconciling Final Rates – Results

Underpayments – Districts are underpaid when the final rate calculated is higher than the interim rate paid.

· Claims are reprocessed and paid at the final rate.

· Reprocessed claims and the underpayment amount are included on the remittance advice (RA).

· MHCP issues a warrant for the amount due to the school district.

Overpayments – Districts are overpaid when the final rate calculated is lower than the interim rate paid.

· Claims are reprocessed and paid at the final rate.

· Reprocessed claims and total overpayment amount are listed on the RA as a credit balance.

· Overpayments are recovered from school district’s future payments.

· Payments are deducted from the district’s credit balance until entire amount is repaid; no interest is charged.

· Credit balances must be repaid within one year through the claims process or MHCP will request immediate repayment.

Reporting Cost Data – District Responsibilities

The providing district must report data to DHS and MDE for IEP services rates according to the following:

· Only costs reported through the data system designated by MDE are included in the cost-based rates for covered IEP services.

· Costs must be reported in the distinct categories for covered IEP services: physical therapy, nursing, interpreter services, etc.

Districts are responsible for all required costs reported to DHS and MDE, including data prepared by billing agents or others.

· Review all data for accuracy before submitting it.

· Review data and final rates during data review periods provided by MDE and DHS to avoid costly monetary recoveries.

· Report encounter and time data for direct services to DHS using the Individualized Education Program (IEP) Services Annual Data Report Form (DHS-5052). Note: This is an online form and must be submitted electronically.

· Complete and submit to DHS the IEP Services Annual Data Report Form by July 5, one year after the school year during which the services were provided.

· The special education director or administrator who signs the form is certifying the accuracy of the data submitted on this form.

· Track and record actual encounters and direct service hours throughout the school year and keep this documentation for five years.

· Effective February 1, 2018, school districts are required to document start and end times for each IEP or IFSP health-related service covered under Medical Assistance, including covered initial evaluations, reevaluations and assessments. This requirement is necessary to accurately reflect the actual amount of face-to-face time the service provider spends with the child.

· Direct service time is face-to-face services, covered IEP initial evaluations, reevaluations and health-related assessments, IEP or continued IEP services, and covered face-to-face mental health services to families.

· When more than one service provider provides the same service (for example, PT) at the same time, each service provider must record the face-to-face service time. Combine the direct service time of each service provider; however, the school district can only count this event as one encounter per child per day.

· When more than one service (for example, PT and OT) is provided at the same time by two service providers, each service provider must record the face-to-face service time and encounter.

· When a child’s plan of care indicates more than one person is required to provide PCA services to the child at the same time, the second, or assisting PCA reports only the face-to-face time he or she spent working with the child to complete the service. The primary PCA reports the total time it took to complete the entire service, not just a portion of time as the assisting PCA will do. Do not double the time for the service.

· Encounter is one encounter per day, per child, per service.

Review the information provided in the IEP Services Manual under Covered and Noncovered Health-Related Services in the MCHP Provider Manual.

Payments

Medical Assistance’s (Minnesota’s Medicaid program) federal share is 50 percent. School districts are responsible for the non-federal share of the Medical Assistance payments, also 50 percent.

MHCP deducts the non-federal share from the total payment at the end of the RA.

Administration Fee

At the end of each school year, each district that has received payment for IEP services will receive an invoice from DHS for the district’s share of the costs to administer the program. DHS will no longer deduct a percentage from the federal share to cover the administration costs. Administration fees charged to each district are prorated based on each district’s payments for covered IEP services for the school year.

Payments for administration fees cannot be made from future IEP services payments. Instructions for payments will be included on the invoice. Unpaid administrative fee bills will be turned over to the Department of Revenue for collection.

Remittance Advice (RA)

RAs provide detailed payment information about health care claims and, if applicable, describe why the total original charges are not paid in full. The X12 835 is a financial transaction designed to automatically balance financial accounts. The 835 transaction standards and HIPAA-related adjustment code lists are available through the Washington Publishing Company (WPC).

MHCP enrolled providers receive their RAs in one of the following formats:

· A readable PDF file dropped in the provider MN–ITS mailbox

· An X12 835 electronic batch file dropped in the provider MN–ITS mailbox

For reading the PDF RA information, review How to Read Your PDF RA and the Remittance Advice (RA) Guide Chart (DHS-7400) PDF.

The last page of the RA is a summary page for the warrant cycle. This page will show the amount(s) adjusted from the submitted charge. The Provider Adjustment ID code 571 represents the adjustment of the non-federal portion of the paid claims. At times the summary page will have two 571 adjustments. One line will display the adjustment amounts for MA funds.

The Provider Adjustment ID code 502 displays when final rates are calculated and an overpayment was made. That is the credit amount the school was overpaid. The Provider Adjustment ID code 503 will display showing the credit amount brought forward from the last payment cycle if the total credit amount cannot be recovered in one payment cycle.

RAs are stored in the MN–ITS mailbox and available for 12 months; they can be saved electronically or printed. Call the MHCP Provider Resource Center at 651-431-2700 or 800-366-5411 to request lost or deleted RAs.

Legal References

Minnesota Statutes, 256B.0625, subdivision 26(e, f) (Covered Services, Special education services)
Minnesota Statutes, 295.53, subdivision 1(a)(4) (Exemptions; Special Rules) educational institutions tax exempt