The anticipated annual program costs in the Program Budget shall be developed using the UCC’s Maximum Capacity. The Program Budget shall reflect all direct and indirect costs needed to appropriately cover peak service times. Contractor is required to make every attempt to stay within the approved initial amount. To the extent possible, contractor shall, in preparing the Program Budget, account for possible price fluctuations and build in reasonable contingencies to prevent exceeding the approved Program Budget. Further, Los Angeles County Department of Mental Health (DMH) may assess financial consequences when contractor, as instructed by DMH Program Staff, does not take reasonable steps to ensure program costs are minimized when the UCC is not able to operate at maximum capacity for extended periods of time.
 

It is the contractor’s responsibility to ensure it maintains policies and procedures to monitor its Program Budget and spending to effectively operate the UCC. If at any point during the FY, contractor discovers that ongoing FY costs shall exceed the total for either the direct or indirect categories of the approved Program Budget, contractor shall immediately submit a written notice to the DMH Program Manager about the potential to exceed the approved Program Budget.
 

The notice must provide a revised Program Budget, cost analysis, and justification for the anticipated increase in the approved Program Budget and explain the steps taken to mitigate the increase in cost, including an explanation as to why an increase is unavoidable and whether contractor anticipates that the increase shall carry on into future FYs or is considered a one-time incident. Contractor must also explain the extent to which it is possible to reduce the unavoidable costs. DMH Program Manager shall review the notice upon receipt. If the costs are deemed unavoidable and justified, the DMH Program Manager shall make a recommendation to DMH executive management that the revised program budget be approved. Contractor shall be notified in writing within five (5) business days of executive management’s approval or rejection of the revised Program Budget.
 

DMH shall not be responsible for the payment of costs that exceeds the amount in an approved revised Program Budget which is adopted by DMH after following the procedures in Section A2. In the event that the revised Program Budget is not approved, DMH shall not reimburse amounts that exceed the original approved Program Budget. Furthermore, DMH shall not pay particular costs which are not reasonable and not allowable under Medi-Cal or other funding source rules irrespective of whether such costs are within the aggregated approved or revised Program Budget amount.
 

In some instances, such as where a third party is providing funding, a contractor may need to incur costs up front and seek reimbursement through a third party source. Contractor shall follow the procedures and guidelines established by the third party source or DMH to obtain such reimbursement.
 

To avoid delays in payment, contractors shall ensure invoices are accurate and submitted in a timely manner. Submissions provided beyond the 15th of the month require a justification that shall be reviewed by DMH Program Staff for payment.
 

It is contractor’s responsibility to ensure all invoices contain the required information as set forth in the authorized invoice document to ensure payment. Invoices that do not contain all required information may result in delayed processing and payment of the invoice(s). Contractor shall record “N/A” for categories that do not apply.
 

Type of Cost	Supporting Documentation
Direct Cost - Program Staffing	Timesheets, certified statement of hours worked, or check stubs.
Direct Cost - Services and Supplies	Copies of receipts, invoices, or contracts.
Indirect and Administrative Costs	Methodology (provided one time, unless changed).

 

DMH shall provide a schedule of payment as noted in the LE Contract, Financial Exhibit A, Reimbursement Basis.
 

Contractor shall submit a Provisional Rate Request for Mode 10, SFC 25 services to DMH pursuant to DMH Policy 800.08.
 

To ensure contractor’s crisis stabilization services are processed appropriately in DMH’s claims processing information system and to ensure compliance with the certified public expenditure process, i.e., to ensure cost-based payment to contractor is equal to or greater than the claim cost, DMH shall reduce the approved provisional rate specified in Procedures section B3a by 25 percent (i.e., at 75 percent of the approved rate) when such rate is set up in DMH’s claims processing information system. Any variance between the provisional payment from the State and the actual, allowable expenditure incurred by DMH shall be reconciled through the Short-Doyle/Medi-Cal (SD/MC) cost settlement process.
 

Accordingly, in lieu of actual damages for non-compliance with LE Contract, Financial Exhibit A, liquidated damages may, at DMH’s sole discretion, be assessed and recovered by DMH from contractor, in the event of repeated occurrences of noncompliance with the timely and proper reporting of service information into DMH’s claims processing information system, where such information is reported in time for DMH to submit a timely claim or reprocess a claim to Medi-Cal or Medicaid Children’s Health Insurance Program (MCHIP).
 

Actual damages may be assessed in the event that complete and accurate service information is not reported in time for DMH to submit a timely claim or reprocess a defective claim for a covered service to an eligible Medi-Cal or MCHIP beneficiary. No liquidated or other damages shall be assessed if the contractor has good cause for the untimely submission, and actual damages shall not be assessed if the payment for the services is denied due to lack of beneficiary eligibility or lack of coverage. Actual damages may be assessed where coverage is denied due to lack of documentation.
 

For each month an invoice is submitted, DMH program staff shall, within 10 business days of the end of the contractual reporting deadline as described in LE Contract, Financial Exhibit A, Paragraph C (BILLING PROCEDURES), reconcile data provided by contractor, the DMH claims processing information system, including IBHIS data, contractor’s monthly invoice and monthly census reports/client lists and the unbilled Medi-Cal Report, to determine whether contractor has adhered to reporting responsibilities as set forth in LE Contract, Financial Exhibit A, Billing Procedures.
 

If it is determined that timely reporting was not done, DMH program staff shall submit an initial written notice to contractor within five (5) business days of the reconciliation process to inform contractor of its failure to meet contractual obligations. Such notice shall also serve to inform contractor that any repeated occurrence or failure to remedy the initial non-compliance issue shall automatically result in the assessment of liquidated damages. The amount of such liquidated damage as set forth below shall be deducted from payment of the following month’s invoice. Such notice shall further advise contractor that continued failure to report data necessary to timely claim for services to Medi-Cal and MCHIP beneficiaries shall result in assessment of actual damages.
 

If contractor continues to demonstrate poor compliance with LE Contract, Financial Exhibit A, Billing Procedures, the County may pursue additional remedies up to and including termination of the contract.
 

Contractor may meet with DMH within five (5) days of the date of the notice and demonstrate why good cause exists not to assess liquidated or actual damages.
 

Such liquidated damages are intended to represent estimated actual damages and are not intended as a penalty, but rather a reasonable measure of damages, based upon DMH’s experience and the nature of the loss that may result from non-compliance.
 

Requests for delays in claims submissions due to good cause justification or no fault on the part of the contractor or due to County issues that prevent the entry by contractor of Units of Service (UOS) data shall be handled in accordance with LE Contract, Financial Exhibit A, Billing Procedures.
 

Liquidated Damages	Assessed Amount
Contractor Invoicing	$100 for each invoice that is late.
Submission of Client Data	If at the time of the DMH program staff review described in Section C of this policy client data is shown to be between 1-5 days late, an amount of $10 per client shall be assessed. If at the time of the DMH program staff review described in Section C of this policy client data is shown to be between 6-10 days late, an amount of $15 per client shall be assessed. If at the time of the DMH program staff review described in Section C of this policy client data is shown to be over 10 days late, an amount of $20 per client shall be assessed.
Designation of Funding Sources	$10 for each client incorrectly claimed on an invoice.
Default: Non-compliance with this DMH Policy 801.10	$100 per occurrence.
Default: Non-compliance with financial guidelines that govern particular funding sources	$100 per occurrence in a monthly invoice.
Default: Untimely submission of Schedule 4-A of the SDP as described in Section A.	$100 per day for each day the contractor fails to submit Schedule 4-A of the SDP timely.
Actual Damages	Assessed Amount
Submission of Medi-Cal or MCHIP Data	Actual amount of revenue expected to be generated by DMH when data is not submitted in sufficient time to allow billing to Medi-Cal of MCHIP.
Lack of Documentation	Actual amount of revenue expected to be generated by DMH when documentation does not meet minimum federal, state and County written standards.

 

A summary of expenses for the entire FY broken down by monthly direct and indirect expenses;
 

Actual, allowable UCC expenses not captured during the FY. Contractor shall report all expenses that may have not been previously captured in monthly invoices and shall clearly delineate when and why a particular expense was not captured, and shall provide supporting documents to validate the expense;
 

Remove expenses not attributable to the UCC. Contractor shall clearly delineate when and where an expense not attributable to the UCC was incurred. Revisions shall be reflected in subtotals of the AER; and
 

Ensure all expenses attributed to the UCC are recognized in accordance with generally accepted accounting principles.