Everything You Ever Wanted to Know about Time Studies

Everything You Ever Wanted to Know about Time Studies Presented on behalf of HSFO

October 22-24, 2019

Advanced Cost Allocation Training © 2019 Public Consulting Group, Inc.

Agenda• Time and Effort Reporting – the Basics• Methods of Administration • Random Moment Sampling• Application• Rosters• General and “All Other” Activities• Enhanced FFP Activity Claiming• Training Participants • Time and Effort Statements • Hot Topics • Common Pitfalls • Visual Examples

2


Time and Effort Reporting – the Basics • When staff work on multiple activities or programs, and another methodology is

not available, the required methodology for allocating costs is time and effort reporting.

• Time and effort reporting measures “level of effort,” or relative amount of time spent on one activity versus another.

• Time and effort reporting related to cost allocation does not measure staff productivity or resource allocation.

Time and effort reporting is used when staff perform multiple activities, funded by

different sources and/or reported differently

3


Time and Effort Reporting – the Basics (cont.) • Agencies must complete time and effort reporting for income maintenance staff, child welfare

staff, and staff who support various Medicaid administrative activities and/or perform direct services.

• Case workers usually support multiple programs and/or serve populations that are eligible for different programs.

• Staff may provide direct services and perform administrative activities (e.g., referrals, case planning, evaluations, therapeutic services, etc.) and thus the time study is used to identify costs for both administrative claims and carve out direct service costs.

• CMS often refers to “parallel coding”, meaning staff perform Medicaid and non-Medicaid allowable activities.

• Programmatic or administrative staff might work on multiple grants, programs, or administrative activities and benefit from time and effort reporting.

• Staff supporting Advance Planning Documents (APDs) may need to report time if they are working across APD activities or APD activities and other efforts.

4


Time and Effort Reporting – the Basics (cont.)• Time and effort methodologies should be determined by agency

management based on accuracy, ease of administration, and agency culture.

5

Forms of Time and Effort ReportingRandom Moment Time Studies (RMTS) /Random Moment Sampling (RMS)

Time Tracking or 100% Time Logging (may occur in Time and Attendance Systems (but ensure that the system can meet requirements)

Interval Reporting (less frequent periods)


Time and Effort Reporting – the Basics (cont.)Methodology Pros and Cons:• Random Moment Sampling (RMS)

• Pros - Staff may only need to respond a handful of times per claiming period.• Cons - Statistical validity varies based on many factors; must ensure “randomness”; must

ensure participants are sampled during their specific work hours; increased federal scrutiny on timeliness of responses; not feasible for a small group of staff.

• Time Tracking• Pros - Most accurate and acceptable methodology.• Cons - May be burdensome for participants; continual need for conducting trainings;

misperception exists that staff can complete 100% time reporting without recurring training.• Interval Reporting

• Pros - Administered infrequently and therefore not a constant process.• Cons - May not factor in all possible activities because of “seasonality”; may be difficult to

gain federal approval.

6


Methods of Administration • Time study tools include:

• Web-based tools• Time and attendance systems• Telephone surveys• Paper forms and log sheets

• Agencies may choose to design their time study to include a pick list or employ a decision tree structure.

• A case identification number or case-sensitive information may be required for client-specific activities.

• It is equally important to gain approval of both the activities and the method of administration.

7


Methods of Administration (cont.)• Automated time studies are more likely able to support a decision tree process where staff are

asked a series of questions that guide them to the appropriate answer and valid combinations of responses.

8


Random Moment Sampling• “For states, local governments and Indian tribes, substitute processes or systems for allocating salaries and

wages to Federal awards may be used in place of or in addition to the records described in paragraph (1) if approved by the cognizant agency for indirect cost. Such systems may include, but are not limited to, random moment sampling, “rolling” time studies, case counts, or other quantifiable measures of work performed.”

• “Substitute systems which use sampling methods (primarily for Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), Medicaid, and other public assistance programs) must meet acceptable statistical sampling standards including:• The sampling universe must include all of the employees whose salaries and wages are to be allocated

based on sample results except as provided in paragraph (i)(5)(iii) of this section;• The entire time period involved must be covered by the sample; and• The results must be statistically valid and applied to the period being sampled.”

-The Uniform Guidance

9


Random Moment Sampling• It is important to ensure statistical validity. The following equation is the only one published by CAS –

though other calculations may be approved:

N = P(1-P)SE 2

T

Where N = Sample SizeP = Anticipated Rate of Occurrence of the

Activities Being ObservedSE = Desired Sample Precision (e.g., .02, .03., .05, etc.)

T = Confidence Level Factor (1.96 for 95%)

10


Random Moment Sampling (cont.)• Regardless of the formula, CAS requires 2,000 minimum samples a quarter and CMS

usually requires 2,401 samples + a 15% oversample.• An over-sample must be included with any calculation.• Agencies need to pay careful attention to the response rate; a low response rate often

indicates a poorly run and inaccurate time study.• The formula does not consider the number of time study participants. • An RMS may not be appropriate for a small number of staff, or another calculation may

need to be negotiated.

Assigning a set amount of moments to each person each period is not random, nor is setting a time study to generate

surveys at set intervals (i.e., every five minutes)

11


Application• Current period time tracking/RMS must be applied to current period costs; any variation should

be approved by CAS (even though the Uniform Guidance now mentions “rolling time studies”). • CAS/CMS/ACF/USDA will want to know the following (among other things) about any

methodology.• RMS - Is there advance notification? (generally not allowed) • RMS - How long staff should have to respond to surveys

(e.g., 24, 48, 72 hours) • Time Tracking – How long do staff have to record time for a

period?• Who is included and why?• What quality control processes are in place?• How sample pools are updated?• What are the hours of operation?

12


Application (cont.)• A time tracking/RMS process must account for every single activity that someone could perform,

regardless of how often it is performed.• The more activities on a time study, the easier it is for staff to document time as they are

better able to place the activity performed into a specific category.• As much as possible, descriptions need to be written in a language that is familiar to participants

but is still clear to the reviewers.• Focus groups and interviews are key to ensure an appropriate time tracking/time study process

and to help gain buy-in.

13


Application (cont.)• Staff only working on one program should not participate in time tracking/RMS (directly charged

staff may need to complete attestations or another form of documentation).• The time tracking/RMS process must be approved by the cognizant agency(ies).• It is important to justify the time study/RMS process as a method of allocation if used for non-

participants (e.g., supervisors, support staff).• Other cost pools should not be allocated by time tracking/RMTS results if they are in no way

connected to the activities included on the time tracking/ time study (chances are that it will not maximize revenue, in addition to being potentially incorrect).

14


Rosters• It is critical to keep updated rosters of RMS participants and regularly review

who is time tracking.• For RMS rosters:

• Remove terminated staff at the end of the quarter.• Add new staff at the beginning of the quarter.• Establish a process where hours are collected for each participant.• Ensure that surveys are sent to workers during their specific working hours

(which may mean collecting unique schedules).• Establish processes for determining when staff are on extended leave and

how to remove and return them to samples.

15


General & “All Other” Activities • General administrative activities (e.g. general meetings, supervisory

tasks, etc.) must be included in time tracking/RMS activities. They may be reallocated to other tasks.

• Paid and unpaid time off (e.g., sick, vacation, lunch, breaks, etc.) should separate from general work activities.

• If sampling participants with different schedules, include a “Not Scheduled to Work” activity that allows staff to account for time they normally would not be at work.

• A good RMS system will allow participants to write in their schedule so it can be updated.

16


General & “All Other” Activities (cont.)• Time studies are required to have “Non-Work Related” or “Exception” activities. • Responses to these activities should be few, but it is important to carve out

unallowable costs.

• It is important to address seasonal or emergency situations such as snow days, disasters, etc. and provide instruction on how to record such time.

• Working on a statewide task force not related to an individual’s position

• Coaching football at a group home or school• Temporary assignment to another agency • Activation during an emergency in a different capacity

17


Enhanced FFP Activity Claiming • Medicaid and Title IV-E in particular have activities that may be claimed at

different FFP levels (i.e., 50%, 75%, and 90%). • Time tracking is often required to support claiming at enhanced levels.• These activities need to be clearly explained and staff need to be trained

on when to use them. • Activity codes should never list the FFP level - human nature will lead staff

to select the enhanced funding more often. • Examples include enhanced Medicaid funding for Skilled Professional

Medical Personnel (SPMP) (75% FFP) available for certain activities) and Medicaid Management Information System activities (75% and 90% FFP) and Title IV-E Training (75%).

18


Training Participants • At a minimum, two types of training should exist:

• Training for new participants (before they are added to the time study)• Annual training for ongoing participants

• Training may also be useful for supervisors and other staff that support the time study.• Training is important regardless of the type of process. Even time tracking participants require

regular training. • There is increased federal scrutiny regarding how often participants are trained and how well

they understand activities.

• How often are staff trained?• What types of tools and methodologies are used to train staff?• Are the training materials updated often and distributed to new

participants?• Any other training tips that have worked well?

19


Training Participants (cont.) • Participants should know that time studies are tied to federal funding to the

department so that they are taken seriously. However, they should not know which activities are reimbursable through federal programs and which are not.

• Participants should approach the time study as an objective tool that captures how their time is spent.

• The importance of training cannot be underestimated in the time study process. We have seen dramatic changes to the results following a comprehensive training

• General & Administrative activity hits generally rise dramatically the further training participants are removed from training

• Training is essential for those time studies that include positions with high turnover rates

20


Time and Effort Statements• The Uniform Guidance changed language pertaining to standards of

documentation for personnel expenses:• Moves away from prescriptive documentation requirements (semi-

annual attestation and personnel activity reports) towards an approach that relies more heavily on the non-federal entities system of internal control.

• The original intent of an attestation remains, even though the Guidance allows for more modernized documentation standards.

21


Time and Effort Statements (cont.)• The guidance lays out requirements for the record keeping used to support charges to federal

awards which include:• Be supported by a system of internal control that provides reasonable assurance that the

charges are accurate, allowable, and properly allocated.• Be incorporated into the official records of the non-federal entity.• Reasonably reflect the total activity for which the employee is compensated.• Support the distribution of the employee’s salary among both federally assisted and non-

federally assisted specific activities or cost objectives.• Budget estimates may be used for interim purposes but do not qualify as support for salaries

and wages.• Charges for salaries and wages are still required to be based on an after the fact distribution

of actual work performed by the employee but eliminates specific references to the personnel activity report.

22


Time and Effort Statements (cont.)The Uniform Guidance changes language pertaining to support for salaries and wages as follows (continued):• The guidance stipulates that where a non-federal entities records do not meet the standards

outlined in the guidance personnel activity reports, semi-annual attestations, or equivalent documentation may be required by the federal entity.

• It is not clear what the federal agencies and auditors will find acceptable documentation to meet the requirements.

Non-federal entities should not stop their current semi-annual attestation and personnel activity reporting practices until confident they are able to meet the standards without this documentation and have a strong internal control system in place. The internal control systems should be continuously monitored and tested to ensure they will stand up to close scrutiny by the federal agency and state auditors (again, the intent has not changed)

23


Hot Topics Validation

• CAS and other cognizant agencies, including CMS, usually require validation processes whereby a certain percentage of moments are validated by a third party.

• This process is discussed in the draft 1981 guide on cost allocation procedures (never published but circulating). This process describes validating 10% of the moments with very little further guidance on the issue. This percentage is also included in the PACAP Review Guide.

Time Studies That Are Not Really Time Studies• Some agencies allocate costs by staff estimating percentage of time on certain activities or grants.

Worse, some agencies have supervisors or others complete these estimations.• These are not real time studies; any allocation needs to be supported in fact.• Estimates are not time studies, regardless of whether they are before or after the fact.

24


Hot Topics (cont.) Narratives

• CAS requires separate sections in the CAP narrative that specifically describe all RMS processes. Previously, these procedures might be kept as part of a separate document.

• All time studies, including RMS processes for outside agencies such as Child Placing Agencies (CPAs), must be included if an agency is claiming administrative reimbursement for costs within the agency or by a sub-recipient.

• School-based Medicaid administrative claiming processes (which require time studies) must be included in state Medicaid agency plans or they are subject to disallowance, as noted in several recent OIG reports.

Time study processes must be outlined as part of the cost allocation plan narrative

25


Hot Topics (cont.) CMS Guidance

• CMS historically references the School Based Medicaid Claiming Guide as policy for supporting time study processes and requirements.

• CMS has recently cited several new policies that have not been published or put into regulation. • New CMS policy or regulation is likely on the horizon.

26


Common Pitfalls 1. Not training staff! Over time, staff will have different interpretations of activities,

despite how clear an agency thinks the activity descriptions are. 2. Not ensuring that staff have access to the activity descriptions. 3. Not reviewing the questions regularly to make sure that they still reflect the

activities being performed by staff. 4. Not stressing the importance of the time study, leading to a poor response rate.5. Not keeping participant lists up to date. 6. Allocating staff cost by percentage of time on a time study rather than a real

number, supported by fact.

27


Visual Example #1

28


Visual Example #2 – Time Study Activities Sample Time Study Activity Selections

Provision of Direct Medical and Behavioral Health Services*

Provision of Direct Non-Medical and Non-Behavioral Health Services*

Referral, Coordination, and Monitoring of Medical and Behavioral Health Services Covered by Medicaid*

Referral, Coordination, and Monitoring of Non-Medical and Non-Behavioral Health Services Not Covered by Medicaid*

Arranging for Client to Access Transportation or Translation Services for Medical/Behavioral Health Services Covered by Medicaid*

Arranging for Client to Access Transportation or Translation Services for Non-Medical/Behavioral Health Services Not Covered by Medicaid*

Outreach for Medicaid Services Outreach for Non-Medicaid Services

Facilitating an Application for the Medicaid Program Facilitating an Application for Non-Medicaid Programs

Program Planning, Policy Development, and Interagency Coordination Related to Medical and Behavioral Health Services Covered by Medicaid

Program Planning, Policy Development, and Interagency Coordination Related to Non-Medical and Non-Behavioral Health Services Not Covered by Medicaid

Miscellaneous Non-Medical Activities ---

Grant Related Activities ---

Paid Time Off Unpaid Time Off

Not Scheduled to Work ---

General Administration ---

Other Non-Agency Related Activities ---

29