| I. PURPOSE
| | To provide guidelines, standards, and controls for the establishment of provisional rates for the billing and payment of mental health services provided in the Los Angeles County Department of Mental Health (DMH/Department) Legal Entity Agreements.
| | II. DEFINITIONS
| | Actual Allowable Costs: Actual allowable costs include only those reasonable, necessary, and proper actual expenses, subject to limitations specified in the DMH Legal Entity Agreement.
Control Rates: Actual cost per unit amounts by Service Function Code (SFC) Range as reported in the most recently filed Annual Cost Report that are used to support the Provisional Rate development per this policy.
Cost Reimbursed Contracts: Mental health services contracts that reimburse contractors based on the lower of actual costs, published charges (unless a nominal charge provider), or County Maximum Allowances (CMA).
Cost Report: The Annual Cost Report that is required by the State. Such Cost Report contains actual cost, revenue, and statistical information that are used to determine reimbursement for Legal Entity (LE) mental health services providers.
County Maximum Allowances (CMA): Also known as Exhibit C, they are the maximum allowable reimbursement rates that are established by the DMH.
Provisional Rates: Interim rates that are established for billing and payment purposes and are subject to change upon request and approval. The goal of the provisional rates is to closely approximate final actual cost reimbursement rates to equitably enable ongoing payments for services rendered and billed.
Provisional Rate Calculation Worksheet: Also known as Exhibit B, it is an alternative worksheet to be used by contractors that do not have a cost reporting history with DMH or any other means of developing provisional rates.
Provisional Rate Request/Approval Form: Also known as Exhibit A, it is the formal document used by Legal Entity Contractors to request new provisional rates based on specified operating conditions and expenditure levels.
Rate Table: A financial table associated with each legal entity/provider number that contains a list of provisional billing rates by fiscal year and SFC. The Rate Table is used for calculating claimed services including Medi-Cal services billed to the State.
| | III. POLICY
| | All Provisional Rate Requests, including new fiscal year rates as well as mid-year rate changes, will be submitted utilizing the Provisional Rate Request/Approval form (see Exhibit A).
Provisional rates are to closely approximate final actual cost per unit rates for allowable costs as reported in the year-end cost report.
Provisional payments for mental health services are to closely approximate final payments to ensure that neither the County nor a contractor have large sums due or owed at cost report settlement.
All approved provisional rates, including new fiscal year rates and mid-year rate changes, will only be effective prospectively from the time the approved Provisional Rates are entered into the rate table of the County’s claiming system.
Within 30 calendar days of approving the Provisional Rates, DMH Chief Information Office Bureau (CIOB) shall update the Provisional Rates within the rate table in the County’s claiming system. The date the rate table is updated will be considered the effective date of the rate change.
Provisional rate approvals are subject to the CMA that is in effect at the time the Provisional Rate Request is received by DMH. (See Exhibit C for the current CMA schedule).
| | IV. PROCEDURES
| | | | V. AUTHORITIES
| State Plan Under Title XIX of the Social Security Act Medical Assistance Program, TN No. 93-009
The County Performance Contract with the State of California
California Welfare and Institutions Code Division 5 Part 1 § 5651(a)(4), 5664(a), 5709, 5718(c), and 5720
California Code of Regulations Title 9 §§ 524, 571, 573, 1820.110(4)(c), 1820.115(a)(3), and 1830.105
Centers for Medicare and Medicaid Services (CMS) Publications #15-1, The Provider Reimbursement Manual Part I, and #15-2, The Provider Reimbursement Manual Part 2
Office of Management and Budget (OMB) Circular A-122 | | VI. ATTACHMENTS
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