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Mental Health Cost Report Questions & Answers


General Questions


Who has to file a Mental Health Cost Report (MHCR)?

Answer: All providers who direct bill mental/behavioral health, CAP-MR/DD and residential services are required to file a cost report unless they qualify for an exemption. A full list of exemptions, will be coming soon for 2008 and be located under the 2008 Cost Reporting Link.


If a provider only provides CAP-MR/DD or residential services, do they have to file a MHCR?

Answer: Yes, per the Implementation Update #42 memo released on April 7, 2008 by the Division of Mental Health, Developmental Disabilities and Substance Abuse Services (DMH) and Division of Medical Assistance (DMA), CAP-MR/DD and residential treatment providers will begin filing the Mental Health Cost Report. This is an effort to consolidate and decrease the number of cost reports required of a single provide.


If a CAP-MR/DD or residential provider has never filed a cost report before because they always fell under the revenue exemptions, when is a Mental Health Cost Report due?

Answer: Providers who have never filed a cost report before will need to begin gathering the needed data at the beginning of their next accounting year and turn in their first cost report 5 months after that year ends. For example if your accounting year starts 7/1/08, then start collecting cost report data on 7/1/08 though 6/30/09 and file a cost report on 11/30/09.


CAP-MR/DD providers were exempt if they received less than $500,000 in Medicaid revenues. Residential providers were exempt if they received less than $230,000 in Medicaid revenues. Are these exemptions still valid?

Answer: The only exemptions are those already talked about, for those CAP ONLY and residential ONLY providers who have never filed a cost report because they fell under the exemptions. They will need to start collecting their cost report data at the beginning of their next fiscal year. After that, there are no longer are any exemptions granted based on the amount of Medicaid revenue received. If you directly bill mental/behavioral health, residential or CAP services a Mental Health Cost Report is required.


What if a CAP-MR/DD provider has filed DMA’s Excel version of a cost report because they received more than the revenue exemption amounts?

Answer: Providers who have filed DMA’s Excel CAP-MR/DD Cost Report and have a calendar year end (12/31/07) have the option of filing either the 2007 Closeout Cost Report or the Mental Health Cost Report. The provider has to submit one of these cost reports to the Controller’s Office by 9/30/08. The 2007 Closeout Cost Report (using Excel) is available now on DMA’s web site. These providers will have to file Mental Health Cost Report for their 2008 data. Those Providers with a state fiscal year of 7/1/07 through 6/30/08 will have to use the Mental Health Cost report and it will be due five months later on 11/30/08.


What if a residential treatment provider has filed DMA’s Excel version of a cost report because they received more than the revenue exemption amounts?

Answer: The last Excel version of the Residential Cost Report was due to DMA on 5/31/08. After that all residential treatment providers have to use the Mental Health Cost Report and it should be turned into the Controller’s Office 5 months after their accounting year end.


When is the Mental Health Cost Report due?

Answer: The MHCR is due five (5) months after the accounting year end of the provider. So if a provider has a year end of 12/31 then the cost report is due on 5/31. If a provider has a year end of 6/30 then the cost report is due on 11/30. If a provider has a year end of 9/30 then the cost report is due on 2/28. If a provider has a year end of 3/31 then the cost report is due on 8/31. The only exception to that (for this year only) is for those CAP ONLY providers, who have filed the CAP-MR/DD Cost report before and have a 12/31/07 year end and are filing the MHCR or the 2007 Closeout Cost Report that is due on 9/30/08.


If a provider only provides and bills CPT codes and does not bill Medicaid for any of the enhanced services, do they have to file a Mental Health Cost Report?

Answer: First please check the service objective list (Appendix M of the 2007 Users Manual Appendices, look under the 2007 Cost Reporting link) to see if any of the services listed there are billed. If the provider direct bills for any of the services on that list, a Mental Health Cost Report is due. If a provider ONLY provides and bills CPT or IPRS codes services and no other service on the list, then the provider does not have to file a Mental Health Cost Report. They just need to file the Exemption form.


If a provider has more than one location and/or Medicaid provider numbers, do they have to file separate cost reports for each location or provider number?

Answer: No. Only one Mental Health Cost Report is expected per Federal Tax ID number. A provider can have multiple locations and Medicaid provider numbers. As long as the locations and provider numbers all roll up under one Federal Tax ID number with a set of financial statements then only one cost report is due.


What kind of information do providers need to accumulate during the year to be able to file a cost report?

Answer: To file the Mental Health Cost Report, there are two main pieces that providers need to accumulate during the year. One piece is units (see a below) and the second is personnel data (see b below).

(a) Providers need to provide a detail list of events by individuals to support the actual units in the cost report. This should be provided in an electronic format and submitted with the cost report. A cost report is not considered complete without this information. The information providers need to keep up with are: Client ID or Name, Medicaid ID, date of service, procedure code (your internal code), procedure description, CPT code, HCPCS code (with modifier if applicable), unit rate, units of service, total amount billed, payer/fund source, amount received, staff ID (who performed the service) and staff name (who performed the service).

(b) The next pieces of information to be captured are the hours worked by employees by service code and other direct services. Below is a picture of what the Personnel screen looks like.



The “Name” column can be the actual name of an employee or an employee number if you don’t wish to list your employee names. However the provider needs to be able to identify to an auditor who the person in the cost report is if audited.

The “Title” column needs to be the job title of the employee and is a required field.

A new column is being added to this screen that will probably called “License”. It will have a drop down box to choose the License the employee has. The list will include AP, LP, QP-L, QP-non/L and NA.

The “Cost Center” column refers to the department or cost center the employee works in. Entering the name of the department/cost center is done in another part of the program but is completely user defined. You can call your department/cost center anything you like, however it usually works best if you use the same names that are used on your audit or financial statements. If an employee works in more than one department/cost center, then the employee needs to be put in multiple times. Once for each department/cost center they work in and for each service they provide.

The “Service” column is the service the employee provided. This is a drop down box and can only pick from the list of services available. The example above is showing the name of the service code. The final version has a combination of the service code and name. Again, if an employee provided more than one service, they will need to be entered once for each service they provided.

The “Hours Worked” column is the annual hours the employee worked providing the service shown in the “Service” column. When hours are entered, the FTE will automatically calculate for you and the “FTE” column will be unavailable to enter data.

The “FTEs” column can be either a calculating or input field. FTE stands for Full Time Equivalent. This is what the cost report program uses to allocate cost to services. As a calculating field, it takes the number entered in the “Hours Worked” column and divides it by 2080 for the percentage of the employee’s time they provided the service in the “Service” column. In the example shown above, this column was used as an input field. Nothing is in the “Hours Worked” column and the user keys in a percentage (up to 3 decimal places).

The “Total Wages” column is where the employee’s actual paid wages are put. If an employee is entered multiple times because they work in more than one department and/or provided more than one service, wages do not have to be split up. The program will do that for you using the FTE that was calculated or keyed. For part-time employees, their actual paid wages need to be entered and again their FTE will be calculated automatically.

The “Benefit %” column can be used or left zero. This column is used in case the benefits paid to employees are based on a percentage of their salary. If a percentage is keyed in, that percentage will be multiplied by what is in the “Pay” column and the amount (to the nearest dollar) will be put into the “Benefits” column.

The “Benefits” column can be calculated or keyed. The calculation part is explained above with the “Benefit %”. If you know what benefits for each employee are then that can be keyed into this column.

The “Travel Hours” column shows the total time traveled during the year to provide the service shown. This time is part of the “Hours Worked” column. This time should not be broken out. This is for informational purposes and will show no reflection on rates in this program.

The “Training Hours” column shows the total time spent training during the year to provide the service shown. This time is part of the “Hours Worked” column. This time should not be broken out. This is informational purposes and will show no reflection on rates in this program.


What does “other direct support” mean?

Answer: “Other direct support” means the time when an employee is not working directly with a client, but is supporting a service. Look at the chart of accounts on the Controller’s Office website called “Guidelines to distinguish between Admin and Direct Care Costs – spreadsheet”. This file shows where different expense lines on your audit (or financial statements) would fall into 1xx-8xx categories. Starting on page 11 of 13, it also gives a number of personnel positions and indicates whether the position is 100% “other direct”, “administrative” or could be a percentage of both. This positions list is not all inclusive. It might be a little easier to understand by giving some examples:
In the spreadsheet referenced above, a medical records position is listed as 100% Direct Cost of Care column. While this position doesn’t directly work with clients they direct support the service. If the expense for this position can be directly tied to one cost center, then assign the position to the cost center and the service would be assigned to “other direct support”. This will spread the cost of this position to all services within the cost center it is assigned.

Lets take this same medical records position, but this time lets say there is no way to pin their time to only one cost center because they work in multiple cost centers. Then this time they would need to be assigned to the “General Support” and the expense would be assigned to all services. There isn’t a big difference between what is meant by “General Support” and “other direct support” except for how it is allocated in the cost report program. “Other direct support” only allocates to the one cost center it is assigned to. “General support” allocated to all services provided by the organization.

Let’s say an employee does some direct care services with clients, but also supervises 5 direct care providers under them. The time this employee spends providing services needs to be assigned to the services they provide, including any documentation time or travel time associated with the service provided. The time spent supervising the 5 direct care providers under him would be assigned to “other direct support”. However if the 5 direct care providers being supervised only do one service, the assign the time to the service being supervised.

Let’s take an administrative assistance position. Let say this person sits at the front desk and the job duties include making appointments for the clients, taking payments from the client and filing or pulling client charts. These job duties would fall under “other direct support”. Lets say some other job duties of this same position also include logging the money received into the organizations computer system and making the deposit to the bank. These duties would fall under “administration”.
These are just a few examples of what is considered “other direct support”. If you are not sure please ask or put a note on the Notes supplemental worksheet (Form 10 of Appendix L of the Users Manual) supplied with the cost report program on what the position title is and the job description


What goes into 1xx-8xx lines?

Answer: There is no way the Controller’s Office can put into a program all the line item expenses that all providers in North Carolina use. Because there is no way to do that, summary expense line times called 1xx through 8xx are used and should match up with a provider’s financial statements and/or audit. The Controller’s Office does not need to see the detail of your expenses in the cost report because the summarized numbers are verified during the review process against the provider’s financial statements or audit. A number of examples of what goes into each of these expense lines is available on the Controller’s Office website in a file called “Guidelines to distinguish between Admin and Direct Care Costs – spreadsheet”.


Do financial statements or audits have to be set up to follow the 1xx-8xx set up?

Answer: No. If a provider chooses not to show expenses using the 1xx-8xx set up, that is fine but a crosswalk will need to be provided to show how expenses were mapped into the cost report.


What is a crosswalk?

Answer: A crosswalk is a spreadsheet used to explain the differences between how expenses are shown on a providers audit or financial statements and how they were entered on the cost report. A crosswalk would be needed if their audit/financial statement did not organize costs in the manner needed to complete the cost report. The crosswalk should indicate where each amount originated on the audit/financial statement, where it was moved to on the cost report, why it was moved and the grand total has to tie back to audit/financial statement. The example shown below is from a provider with one department/cost center.

Audit Line Item                
Outpatient Treatment 1xx 2xx 3xx 4xx 5xx 6xx 8xx  
Salaries 1,367,003              
Benefits 140,309              
Payroll taxes 128,903              
Contract services           102,284    
Office Supplies   39,366            
Medical Supplies   28,970            
Rent       176,206        
Training     10,570          
Maintenance     13,383          
Telephone     6,300          
Utilities     13,213          
Due & Subscriptions     2,563          
Travel     2,914          
Depreciation       38,536        
Total 1,636,215 68,336 48,943 214,742     102,284     2,070,520

The first column lists the different line items shown on the provider’s audit. Across the top are the expense lines in the cost report. This shows the costs in the audit and how it was mapped into the cost report. The total for the Outpatient Treatment department/cost center would be 2,070,520. The total for the 1xx expense summary line would be 1,636,215. For 2xx it would be 68,336 and so on. Again, this is just an example of what a crosswalk could look like, not how it has to be done, but it does need to give the same type of information.


Does a provider have to get an audit done and submit it with their cost report?

Answer: No. Providers at this time are not required to have an audit done. If the provider already has their books audited, then please submit a copy of the final audit with the cost report. If the provider does not have their books audited then send in the unaudited financial statements. Meaning a copy of the Trial Balance (or Balance Sheet) AND the Profit/Loss Statement (or Income Statement).


What are Agreed upon Procedures and what are they for?

Answer: Agreed upon Procedures (or AUPs) are a list of procedures or tests that either a CPA or independent accountant must perform. AUPs are used as an attempt to minimize the audit cost incurred by a provider and at the same time help ensure the accuracy of the financial statements and cost reports. At this time AUPs are not required and can not the found on our web site. It is only being mentioned at this time because this may become part of the cost report requirements at some point in the future.


For the actual units data that has to be provided by the provider who uses the EDS on-line billing, is there a way to capture this data so it doesn’t have to be keyed twice, once for billing EDS and again for cost report purposes?

Answer: Yes. EDS offers mental health providers the Medicaid claims payment data necessary to complete their cost reports. In order to request the data, complete the Provider Mental Health Claims Data Request Form shown on the web site link below:

http://www.ncdhhs.gov/dma/cost/mhclaimsdata.htm

The fee is $300 for each NPI number. EDS will be able to generate the data for each unique Medicaid provider number for claims adjudicated within the past 24 months. For those services billed through the LME, EDS will not be able to extract the data based upon the attending provider number. The provider will need to contact the LME for their claims data report.

This report only shows units adjudicated, not true units performed. Therefore, some real costs may be understated in the cost report, due to not documenting un-billed units, pro bono units, volunteer units, and/or units of service denied and not re-billed, etc.

This data is offered through EDS. For further questions or additional information or support on the claims data or data file, please contact EDS or the Division of Medical Assistance.


Does the provider have to include all fixed and moveable asset depreciation in the cost report even if the services provided are a very small part of the organization?

Answer: If that depreciation expense for the whole organization is included in the total expenditures on the audit or financial statements then the answer to this question is yes. The cost report must match the total expenditures of the audit or financial statements.


If an LP license person gets a QP license during the year, does the time need to be tracked separately and put onto the Personnel screen on two lines showing the two difference license types?

Answer: Yes. The reason is because new tier rates are coming for several services based on license types.



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Last updated July 17, 2013