Annual Cost Reporting: Transparency and Accountability in Service Provider Programs

ANNUAL COST REPORT TRAINING ANNUAL COST REPORT TRAINING DDA RESIDENTIAL SUPPORT PROGRAMS Reporting Year 2015 Reporting Year 2019 DDA RESIDENTIAL SUPPORT PROGRAMS MANAGEMENT SERVICES DIVISION OFFICE OF RATES MANAGEMENT MANAGEMENT SERVICES DIVISION OFFICE OF RATES MANAGEMENT 1

PURPOSE OF COST REPORTING Provides accountability and transparency for the use of public tax dollars; Provides program cost data to regional managers and residential providers; Provides information to reconcile payments and/or allocate appropriated funds; Determines settlement for the ISS staff cost centers; Provides information to department leadership for budget development and policy decisions. 2

2019 COST REPORT SCHEDULES Number of Schedules Reduced to 7 & 2 Optional Schedules Schedule A General Information & Certification Schedule B ISS Payroll Expenses (used to be Schedule B-1 & E) Schedule C Non ISS Expenses (used to be Schedule B, C, & E) Schedule D Revenue (used to be Schedule H) Schedule E - Residential Staffing (used to be Schedule O) Schedule F Healthcare Expenses (used to be Schedule P) Schedule G ISS Settlement (used to be Schedule J Summary & J Detail) Schedule H (Optional) Rate History (used to be Schedule J Detail by Client) Schedule I (Optional) Allocations (New) No longer allocating expenses in cost report 3

SCHEDULE A GENERAL INFORMATION PART A PROVIDER IDENTIFYING INFORMATION This schedule is used to provide basic information about the agency and the report preparer contact information. Item 1 Provider will select from a drop down list. Item 1 Select the correct agency name & region ID as some agencies are listed in two or more regions. Items 2 and 8 will auto-fill once the correct provider name is selected for item 1. 4

SCHEDULE A GENERAL INFORMATION PART B PROVIDER CERTIFICATION Service Provider is a person or entity contracted to provide residential services under Chapter 388-101 and 388-101D WAC. The service provider as authorized in 71A RCW must certify under penalty of perjury that the cost report or an amendment to it is a true, correct, and complete representation of actual costs related to patient care prepared in accordance with applicable instructions provided by the department in its policy, identified through 388- 825 WAC, and chapter 71A RCW. 5

SCHEDULE A GENERAL INFORMATION PART B PROVIDER CERTIFICATION Single owner providers the owner or administrator may sign Legal entity providers Corporations an officer (i.e. CEO, CFO, or COO) needs to sign Partnerships one of the partners needs to sign Non-profits the person who signs the federal tax return needs to sign Subsidiary of a larger corporation an officer of the larger corporation may sign Schedule A will need to be recertified each time a cost report is submitted. 6

SCHEDULE A GENERAL INFORMATION PART B PROVIDER CERTIFICATION Enter the signer s title and the date signed Scan and email, fax or mail the original signed Schedule A directly to your resource manager and/or rates analyst 7

Schedule B ISS Payroll Expenses Reporting ISS Payroll Expenses Do s & Don ts Do not report payroll expenses for Staff who only perform Administrative work Staff who do not perform contracted ISS Administrator s that do not perform ISS Administrator s not eligible to claim ISS payroll expenses Supported living and combined agencies with 20 or moreISS FTE s are not eligible 8

Schedule B ISS Payroll Expenses Reporting ISS Payroll Expenses Do s & Don ts Do report payroll expenses for Employees that perform only contracted ISS Employees that perform contracted ISS and also perform non- ISS/Administrative or non-contracted work Administrator s that perform ISS and wish to claim wages as ISS Applies only to agency s with 20 or fewer ISS FTE s for supported living and combined programs 9

Schedule B ISS Payroll Expenses Reporting ISS Payroll Expenses Accrual basis ISS payroll expenses paid in January 2020 for work performed in 2019 are included ISS payroll paid in January 2019 for work performed in December 2018 are not included Payroll Reporting Period Monthly or Quarterly (March, June, September, and December) Data is not submitted to department until Cost Reports are due Administrative/non-ISS payroll data is reported on Schedule C Schedule A must be completed for formulas to work 10

Schedule B ISS Payroll Expenses Reporting ISS Payroll Expenses, con t Four options to report employee payroll by position & duties performed Option 1 ISS & Professional Service Staff Staff that perform ISS duties only Option 2 ISS & Administrative or Non-contracted Staff Staff that perform ISS duties and Administrative and/or Non-contracted Option 3 GH/GTH Only Administrator Payroll (single employee) Option 4 SL or Combined SL/GH/GTH Administrator Payroll (single employee) Agencies with 20 or fewer ISS FTE s (Full-Time Equivalent) are eligible Schedule B calculates FTE s and determines maximum allowable amount of Administrator s compensation that can be claimed as ISS Maximum allowable ISS compensation is based on a regression table 11

Schedule B ISS Payroll Expenses Reporting ISS Payroll Expenses, con t Employee s working both ISS & non-ISS (Administrative and/or non- contracted business) report all payroll data (ISS & non-ISS) for allocating purposes Paid time off, other compensation and employer paid taxes & benefits are allocated based on gross wages reported as ISS, Administrative, and/or Non- contracted business A job description outlining the employee s ISS and non-ISS duties must be available upon the department s request Employees that perform non-contracted work are only reported if they also perform contracted ISS 12

Schedule B ISS Payroll Expenses Reporting ISS Payroll Expenses, con t For each reporting period record the following: Column D ISS GROSS PAYROLL FOR STAFF (REGULAR PAY) Column E ISS GROSS PAYROLL FOR STAFF (OVERTIME PAY) Column G ADMINISTRATIVE/ NON-ISS GROSS PAYROLL FOR STAFF (REGULAR PAY) Column H ADMINISTRATIVE/ NON-ISS GROSS PAYROLL FOR STAFF (OVERTIME PAY) Column J GROSS PAYROLL FOR NON-CONTRACTED BUSINESS (REGULAR & OVERTIME) Column L GROSS PAYROLL FOR PAID TIME OFF (HOLIDAYS, VACATION, & SICK LEAVE) Column M GROSS PAYROLL OTHER COMPENSATION Column O TOTAL EMPLOYER PAID PAYROLL TAXES (SOCIAL SECURITY & MEDICARE, FUTA, SUTA, L&I, etc.) & ISS PORTION OF B&O TAXES Column P TOTAL EMPLOYER PAID TAXABLE & NON-TAXABLE FRINGE BENEFITS (AS DESCRIBED BY THE IRS) 13

Schedule B ADMINISTRATOR REGRESSION TABLE Calculates the maximum allowable ISS payroll costs an Administrator can claim towards settlement for performing work in an ISS capacity. Only agencies with 20 or fewer ISS FTE s are eligible to claim Administrator payroll costs as ISS expenses. Agencies with 21 or more ISS FTE s would report their Administrator s payroll costs on Schedule C Non-ISS Expenses, line 1. Maximums are reduced 5% for every ISS FTE until the agency reaches 21 ISS FTE s, at which time the agency will no longer be eligible to claim Administrator payroll costs as ISS for settlement purposes. Maximums are based on working in an ISS capacity fulltime and are adjusted for Administrator s that work ISS less than fulltime. 14

Schedule B ADMINISTRATOR REGRESSION TABLE Beginning maximums are 100% higher than FY2019 Benchmarks 2019 ISS FTE ADMINISTRATOR REGRESSION TABLE NUMBER OF ISS FTE's MSA/ NON-MSA KING MSA NON-MSA $81,244.80 $78,748.80 $78,104.00 $77,459.20 1 MSA/ NON-MSA $77,182.56 $74,811.36 $74,198.80 $73,586.24 2 KING MSA NON-MSA $73,120.32 $69,058.08 $70,873.92 $66,936.48 $70,293.60 $66,388.40 $69,713.28 $65,840.32 3 4 $ 19.53 $ 18.93 $ 18.78 $ 18.62 FY2019 Benchmark $64,995.84 $60,933.60 $62,999.04 $59,061.60 $62,483.20 $58,578.00 $61,967.36 $58,094.40 5 6 $ 19.53 $ 18.93 $ 18.78 $ 18.62 100% Increase Administrator ISS Regression Hrly Rate $56,871.36 $52,809.12 $48,746.88 $44,684.64 $40,622.40 $36,560.16 $32,497.92 $28,435.68 $24,373.44 $20,311.20 $16,248.96 $12,186.72 $8,124.48 $4,062.24 $55,124.16 $51,186.72 $47,249.28 $43,311.84 $39,374.40 $35,436.96 $31,499.52 $27,562.08 $23,624.64 $19,687.20 $15,749.76 $11,812.32 $7,874.88 $3,937.44 $54,672.80 $50,767.60 $46,862.40 $42,957.20 $39,052.00 $35,146.80 $31,241.60 $27,336.40 $23,431.20 $19,526.00 $15,620.80 $11,715.60 $7,810.40 $3,905.20 $54,221.44 $50,348.48 $46,475.52 $42,602.56 $38,729.60 $34,856.64 $30,983.68 $27,110.72 $23,237.76 $19,364.80 $15,491.84 $11,618.88 $7,745.92 $3,872.96 7 8 9 10 11 12 13 14 15 16 17 18 19 20 $ 39.06 $ 37.86 $ 37.55 $ 37.24 The number of FTE s are calculated by dividing the ISS Staff total Gross Payroll for Regular Time by the wages listed below. Schedule B automatically calculates the number of FTE s and the allowable Administrator ISS expenses 2080 2080 2080 2080 ISS FTE Annual Hours Annual ISS FTE Wages $ 40,622.40 $ 39,374.40 $ 39,052.00 $ 38,729.60 Compensation maximums will increase over time at the same percentage as ISS tiered rates increase $0.00 $0.00 $0.00 $0.00 21 15

Schedule B ISS Payroll Expenses Reporting ISS Payroll Expenses, con t Retain ISS payroll records and other supporting documentation Supporting documentation may be requested upon submitting the cost report Records must be by employee and job titles and descriptions Easily tied to ISS payroll reported Payroll records for employees performing ISS & non-ISS must be clearly illustrated Payroll tax & fringe benefit expenses reported as ISS can be requested for verification All ISS expenses reported are subject to the departments review 16

Schedule C PROGRAM INFORMATION SECTION Schedule C Business & Program Information Line 1: Indicate if you provide or purchase professional services. This would include medical personnel such as nurses and doctors on staff or contracted. Line 2: Allocation of Shared Costs Indicate if your agency operates multiple programs Indicate if you allocate program costs Indicate the method used to allocate costs Schedule C no longer provides a way for allocating costs (use Schedule I) 17

Schedule C ADMINISTRATIVE & OPERATING COSTS (NON-ISS) Schedule C is used to report non-ISS/Administrative expenses (Select program type Col A-C) Non-Client Related Expenses Administrative/Non-ISS Payroll Expenses Program Operations Expenses Capital & Property Expenses Interest & Tax Expenses Client Related Expenses Maintenance/Laundry/Housekeeping/Dietary Expenses (GH & GTH only) Transportation Expenses Other Non-ISS Client Related Expenses Expense descriptions are listed on the schedule & on the cost report instructions Additional Resources: DDA Chart of Accounts & DDA Policy 6.04 Schedule C no longer provides a way for allocating costs (use Schedule I) 18

Schedule C Allocating Costs Schedule I Allocations Schedule I Non-ISS Expenses tab Columns A-G select a program type from the drop down list Line 1 enter the basis to be used for allocating costs (SS Direct Care, Revenues, etc.) Allocated & Non-allocated Sections: For sections labeled Allocated enter amounts in the Expense Total column. The allocated amount for each program will auto-fill based on the percentages on row 2. (Expenses listed here must apply to all programs selected on Line 1, otherwise use the non-allocated sections) For sections labeled Non-Allocated enter program specific/non-shared expenses in columns A-G. The Expense Total column will auto-fill the sum of each row of data. Schedule I Totals to Schedule C tab This tab summarizes all the amounts entered on the Non-ISS expenses tab Easily transfer all columns of data for GH, GTH, and/or SL to the related Schedule C, Columns A-C, Lines 1-7 19

Schedule C Allocating Costs Schedule I Allocations Transfer Group Home, Group Training Home, and Supported Living program amounts from Schedule I Summary tab columns (below) to the relative column on Schedule C (left) 20

SCHEDULE D PROGRAM REVENUES REVENUE RECEIVED OR EARNED DURING THE REPORT PERIOD (The revenue for residential services must be reported on an accrual basis) Amounts reported in the Revenue for Services section must be received or earned during the reporting year regardless of when the payments were actually received (accrual basis - include revenues earned in 2019 but not reimbursed until 2020 and do not include revenues reimbursed in 2019 for services provided in 2018 and prior) Revenue for Services includes total ISS & Non-ISS reimbursements (Total Daily Rate) Revenues reported in the Other Operating Revenue and Non-Operating Revenue sections may be reported on an accrual or cash basis 21

Schedule E Community Residential Staffing Information The Residential Survey is now Schedule E, Community Residential Staffing Information. The reporting period is a calendar year instead of a fiscal year (January 2019 December 2019). The schedule must be completed and submitted with your cost report due March 31, 2020. The link below is for the 2018 Residential Survey Results: https://www.dshs.wa.gov/dda/counties-and-providers/residential- provider-resources 22

Schedule E Community Residential Staffing Information Complete one schedule for each provider service location & for each program type, for example: Multiple programs (SL/GH) in different communities/counties One Schedule for GH Clark One Schedule for SL Clark One Schedule for GH Mason One Schedule for SL Mason Same location with 2 program types (SL/GH) One Schedule for GH One Schedule for SL A drop down menu has been added for the Program Type Section 7 - 1A instructions are located in comment boxes in the header for each column. They are also available in the Cost Report Instructions word document. 23

Schedule E Community Residential Staffing Information Em For each schedule enter the following: 1) Agency Information - Program Type, Name, City, County 2) Contact Information - Person completing the form 3) Board of Directors Information ****Non-Profit Agencies - only complete if organization has a Board of Directors or governing board 4) Client Information - Monthly average number of clients 5) Employee Benefits - Mark X for all that apply 6) Recruiting - Mark X for level of difficulty to recruit new staff 24

Schedule E Community Residential Staffing Information Em For each schedule enter the following: (continued) 7) Staffing Information Section 1A For each Position Type (see comment boxes in header) Column 1 Number of staff January 1, 20xx Column 2 Number of staff on December 31, 20xx Column 3 Number of staff needed for full employment December 31, 20xx Column 4 Number of ISS staff hired during the calendar year Column 5b Number of ISS staff who left or were terminated Jan 1 June 30 Column 5d Number of ISS staff who left or were terminated within 90 days of hiring date Column 8 Average number of days to fill vacant positions 25

Schedule E Community Residential Staffing Information Em For each schedule enter the following: (continued) 7) Staffing Information Section 1B Lines 6-10 1st Column Enter the starting wage for the position type 2nd Column Enter the average wage for the position after 2 years of employment (hourly rate) Section 1C Using the total ISS staff in Section 1A, Column 2 (yellow total box) enter the number of staff for each length of time on lines 7-9 for both columns 26

Schedule F Affordable Care Act Information Schedule F is used to report Healthcare expenses The reporting period is December 1, 2019 December 31, 2019. The schedule must be completed and submitted with your cost report due March 31, 2020. All program types & locations are reported on a single Schedule. 27

Schedule F Affordable Care Act Information Enter the following: Provider Information (Number, Program Name, City & County) Contact Information (Person completing the form) Health Insurance Information: 1) Total number of employees 2) Number of employees from #1 averaging 29 or fewer hours per week 3) Number of employees from #1 averaging 30-39 hours per week 4) Number of employees from #1 averaging 40 or more hours per week *The sum of question #2, 3, & 4 must equal the total number of employee s reported on question #1 5) Number of ISS staff with company provided health insurance? 6) Number of ISS hours per week for an employee to receive health insurance 7) Amount per employee the agency pays for health insurance 8) Number of staff not eligible for health insurance but work 30+ hours per week 9) Number of employees that waived company provided health insurance 28

Schedule F Affordable Care Act Information Health Insurance Information (continued) 10) Considering the responses to #4, 7 & 8, enter the estimated number of employees enrolling in 2020 to comply with ACA (Total amount anticipated to be on the company health insurance plan). 11) Percentage change in cost per employee five year period for health Insurance 12) For same five years were benefits reduced to decrease the cost per employee 13) Number of clients served 29

Schedule G ISS Settlement Schedule H - Rate History For cost report training purposes Schedule H Rate History will be used to complete Schedule G Settlement, lines 1-22. Schedule H can be used to record the tier level and daily rates associated with each client. The rates and number of days for each client are constructed using contract Exhibit C and COCA information received throughout the year. This is an optional form and is intended for provider use only. Do not submit this form with your cost report, it will contain client names and ID numbers. As an alternative, billing and payment remittance documentation can also be used to complete Schedule G. Providers that choose to use this schedule will need to compile the information (Exhibit C s & COCA s) and fill out the form using the template available on the web. 30

Schedule G ISS Settlement Schedule H Rate History Although Schedule H Rate History is optional there are benefits to using it: Provides program reimbursement data such as: Individual client rate history Individualized rate components ISS, admin & total daily rates Professional services Resident days paid Annualized amounts Allows providers, at any point in time during the year, to compare or reconcile ISS payroll expenses (Schedule B) to total ISS reimbursements (Schedule G, lines 1-22). This would allow providers to monitor throughout the year whether they have overspent or unspent ISS reimbursements (Schedule G, line 30). For training purposes Schedule G will refer to the Schedule H Rate History for information to complete settlement. Providers have the option of using other sources or processes to obtain the necessary data. 31

Schedule G ISS Settlement Program Settlement Schedule G is used to determine settlement for SL, GH, GTH, & Combined programs that are subject to the settlement process as explained in DDA policy 6.04, Section VI. Settlement compares the actual ISS staff payroll expenses paid by the provider (Line 29) to the ISS staff reimbursements (Line 23) paid by the department, for the reporting period. If reimbursements (Line 23) is greater than provider payroll expenses (Line 29), the difference will produce a Settlement (Line 30). Reimbursement Summary section (Lines 1-22) Used to report total ISS reimbursements paid by DSHS Reported on an accrual basis (report reimbursements earned in 2019 but not paid until 2020 & deduct reimbursements paid in 2019 but earned in previous years) Settlement Section (Lines 23-30) Auto-fills total allowable ISS staff payroll expenses Add Purchased/Contracted Professional Services, if any Determines preliminary settlement 32

Schedule G ISS Settlement Reimbursement Summary Tiered ISS by Program Type Reimbursements (Lines 1-4) Manual Calculation Multiply client days by the ISS portion of the clients daily rate - - Client C is 365 days x $232.57 = $84,888.05 Client H is 243 days x $376.03 = $91,375.29 plus 122 days x $454.70 = $55,473.40 Sum the individual client calculations for each program type (GH Group Home) and enter the amount on Schedule G on lines 1-3 33

Schedule G ISS Settlement Reimbursement Summary Tiered ISS by Program Type Reimbursements (Lines 1-4) Schedule H Calculation Use Year End Schedule H - - Must be complete and all formulas working properly Verify column E has the appropriate program selected from the drop down list (GH Group Home, GTH Group Training Home, or SL Supported Living) Select a program type from the drop down list in cell AN1 Record the amount in cell AO1 on Schedule G, Lines 1-3 34

Schedule G ISS Settlement Reimbursement Summary Nurse Delegation, Staff Add On & COCA s Reimbursed (Lines 5-14) Nurse Delegation 9 hour & 3 hour, 1 time training allowing a nurse to delegate to staff Staff Add On & Nurse Delegation tracking & reporting (use 1 source) Provider One payment report (service code) Documentation provided by RM Billing & payment remittance documentation COCA tracking & reporting (use 1 source) Schedule H COCA s are entered as received & reported on Schedule G, Lines 1-3 Schedule I COCA s are entered as received & reported on Schedule G, Lines 11-13 Documentation provided by RM reported on Schedule G, Lines 11-13 35

Schedule G ISS Settlement Schedule I Schedule I - COCA Tracking COCA tracking & reporting Schedule I COCA s are entered as received & reported on Schedule G, Lines 11-13 36

Schedule G ISS Settlement Reimbursement Summary Staff & Purchased Professional Services Reimbursed (Lines 15-21) Manual Calculation Multiply each professional service hourly rate in columns O & Q by the hourly percentage in columns N & P and then by the number of client days in column J - Client 4 is $26.50 x .35 x 306 = $2,838.15 - Client 10 is $26.50 x .35 x 365 = $3,385.38 - Client 16 is $26.50 x .25 x 365 = $2,418.13 Sum the individual client calculations for each service rate and enter the amount on Schedule G, lines 15-20, selecting the appropriate program type and service from the drop down list 37

Schedule G ISS Settlement Reimbursement Summary Professional Services (Lines 15-21) Schedule H Calculation Use Year End Schedule H Must be complete and all formulas working Verify the correct program type is selected from the drop down list in column E Enter each professional service rate listed in columns O & Q in cell AU1 Record the amount in cell AW1 on Schedule G, Lines 15-20 Select the appropriate program type and service from the drop down list 38

Schedule G ISS Settlement Settlement Settlement Section (Lines 23-30) Line 23 (auto-filled) is the total reimbursements carried forward from lines 1-22 Line 24-25 auto-fills total allowable ISS staff payroll expenses from Schedule B Schedule B, cell R65 less cell E65 automatically posts to Line 24 Schedule B, cell E65 automatically posts to Line 25 Lines 26-28 add authorized purchased (non-staff) Professional Services, if any Record any professional services purchased through an outside source Select the appropriate program type from the drop down list Must be authorized by DDA/client assessment Professional services performed by staff are reported on Schedule B Line 29 subtotals lines 24-28 Line 30 preliminary settlement Line 30 displays a preliminary settlement amount due if line 23 (total reimbursements) is more than line 29 (total ISS payroll expenses) 39

Miscellaneous Information 2020 Cost Report Template and related materials available on the web in late December 2019 Ability to enter payroll data throughout the year Ability to compare ISS payroll expenses with ISS reimbursements throughout the year Regression table maximums and FTE calculation wages will increase by 13.5% effective 1/1/2020 Cost Report Training will be provided prior to 2020 yearend Any cost report template functionality/calculation questions please contact the rates department 40

Cost Report Resources Ken Callaghan, DDA Rates Manager Phone: (360)725-3206 kenneth.callaghan@dshs.wa.gov 2019 Cost Report - Template 2019 Schedule H Rate History - Template 2019 Schedule I Allocations - Template Serena Clark, DDA Rates Program Manager Phone: (360)725-2476 serena.clark@dshs.wa.gov 2019 ABC Sample - Cost Report 2019 ABC Sample - Schedule H Rate History 2019 ABC Sample - Schedule I Allocations Tod Johnson, Analyst, Region 1 & SOLA Phone: (360)725-2347 tod.johnson@dshs.wa.gov 2019 PowerPoint Presentation 2019 Cost Report Instructions 2019 Schedule H Rate History - Training Chart of Accounts DDA Policy 6.04 Samantha Everett, Analyst, LSR & Regions 2 & 3 Phone: (360)725-2441 samantha.everett@dshs.wa.gov All the resources above can be found at: Tammy Paulk, Analyst, RHC & ICF/ID Phone: (360)725-2498 tammy.paulk@dshs.wa.gov https://www.dshs.wa.gov/dda/counties-and- providers/residential-provider-resources 41