MAC Compliance Requirements 101

Tools for a Successful Quarterly Cost Reporting

Compliance Review

www.pcgeducation.com

Agenda

• Program Overview

• MAC Compliance Overview

• Training Objectives

• Compliance Review Process

• Common Findings

• Resources

• Questions

2

Program Overview

• The Medicaid Administrative Claiming (MAC) program is a federally funded

program that allows Local Education Agencies (LEAs) to be reimbursed for

a portion of their costs associated with the provision/performance of

Medicaid Administrative and Outreach activities, which are not claimable

under the Medicaid Direct Service Claiming (DSC) program

• One of the requirements for participation in the MAC program is that LEAs

agree to periodic compliance reviews at minimum once every three years to

ensure LEAs are maintaining all the necessary supporting documentation to

claim Medicaid reimbursement under both the DSC and MAC programs

3

MAC Compliance Overview

• Certified quarterly financials are reviewed for each LEA that participates in

the MSBC program at least once every three year phase

• Each LEA supplies PCG with documentation to support costs certified in the

quarter being reviewed

• Costs from that documentation are used to re-create that LEA’s quarterly

claim

• The results of that claim are compared to that of the originally submitted

claim

• Variances identified are resolved via prior period adjustment to a future

quarterly claim

4

Training Objectives

• Objectives include:

• Overview of quarterly cost reporting compliance review process

• Spotlight particular areas where PCG has identified common findings

• Identify resources available to LEAs to prepare for a quarterly cost reporting

compliance review

5

Compliance Review Process • Thirty days prior to review date the LEA is contacted via engagement letter

as well as by telephone as notification that they have been selected for a

quarterly cost reporting compliance review

• Engagement letter identifies requirements of the compliance review and

contains:

• Quarter being reviewed

• Date of review

• Required documentation and due date

• FY12 cost reporting was accrual-based and as such, any review of a quarter

in this fiscal year should include all cost allocation tools used to report

accrual-based costs

6

Compliance Review Process • An entrance meeting with the LEA is scheduled to take place on the day of

the review to establish points of contact during review, and to discuss any

issues with the supplied documentation

• Documentation for review must be received no later than one day prior to

start date of review

• If documentation has not been received by date of review, it is written up to

reflect zero as actual cost data for the quarter, and the 20-day period to refute

the findings begins that day

7

Compliance Review Process

• Cost reporting compliance reviews focus on certified quarterly financials and

require LEAs to provide PCG with documentation that supports the costs

reported in the quarter reviewed, including:

• System generated reports that display salaries and benefits for full/part time

employees

• Invoices for Purchased Professional Services (PPS, i.e. contractors)

• A copy of the MAC check for the quarter reviewed

• A copy of the latest single financial audit from the LEA’s CPA firm

8

Compliance Review Process

• The salary and benefit documentation, as well as PPS invoices should

display the full account codes, and clearly identify each participant’s name

as it exists on the roster

9

Compliance Review Process

• During the entrance meeting the LEA is briefed on review process:

• LEA supplied documentation is reviewed for completeness

• Additional supporting documentation is requested if necessary

• A point of contact is established for the duration of the review

• A tentative exit meeting is scheduled

10

Compliance Review Process

• Allowable cost data as supported by supplied documentation is entered into

the review tool and a claim for the quarter being reviewed is re-created

• Review tool includes both original cost data and cost data from documentation

supplied for the review

• Claim is re-created using same method and calculator used in submission of

original claim

11

Compliance Review Process

• Exit meeting is held with LEA to explain preliminary findings of the MAC

compliance review and to outline LEA’s next steps

• Variances identified during review are outlined in the exit report and sent via e-

mail to the LEA for reference during the exit meeting

• The exit report must be signed and returned to PCG

• Signature does not state LEA agrees or disagrees with findings, only that

they have been reviewed and the LEA understands them

12

Compliance Review Process

• Following the compliance review, PCG has twenty working days to provide

the LEA with a draft compliance review report outlining the review findings

• PCG also submits to the LEA the review tool used during the compliance review

• The LEA then has twenty days from the date of receipt of the draft

compliance review report to refute the findings

• If additional documentation is received within the time permitted, PCG then has

fifteen days from the day of receipt of the additional documentation to provide a

final compliance review report to the LEA

• If no additional documentation is received, the draft report becomes final

13

Compliance Review Process

• If an underpayment is identified, the LEA has the opportunity to request that

the quarter under review be corrected

• Adjusted financials must be entered into the MCRCS system and re-certified

• A prior period adjustment will be made to a future MAC claim

• All overpayment variances identified as a result of compliance review are

resolved via prior period adjustment made to a future claim submission

14

Common Findings

• PPS invoices do not list participants by name

• Make sure all PPS/Private Placement Provider invoices clearly identify the

participant by name as it exists on the roster

• Inconsistent reporting of Federal and non-Federal revenue

• Funds 100-399 are Federal

• With the exception of 290 and related subaccounts

• Functions 2330, 2500, 2600, and 2840 are non allowable

• This includes sub-functions (i.e., 2501-2599, 2601-2699, and 2841-2849)

• There are no sub-functions for 2330

15

Resources

• MCRCS Dashboard contains links to various resources, including the cost

reporting guide, and the Chart of Accounts:

• MCRCS: https://costreporting.pcgus.com/default.aspx

16

Questions

17

Public Consulting Group, Inc.

101 N. 1st Ave., Suite 1800, Phoenix, Arizona 85003

(602) 324-5090, www.publicconsultinggroup.com