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House of Representatives
Session of 2015 - 2016 Regular Session


Posted: May 28, 2015 09:09 AM
From: Representative Kerry A. Benninghoff
To: All House members
Subject: Rate Methodology Task Force (Act 55 of 2013)
As required by statute (Act 55 of 2013), the Pennsylvania Department of Human Services (the Department) was directed to convene a Task Force comprised on state, county, and provider representatives charged with the development of a Rate Methodology Process for purchased services.

In the near future, I plan on introducing legislation to implement the recommendations of this Task Force. In particular, the legislation will have the following provisions:
  • The Rate Methodology established under this process includes application of a Rate Adjustment Factor to be published annually by the Department. A Rate Adjustment Factor is to be included in the calculation of total costs, Act 148 costs, Title IV-E costs, and the county share of costs for the upcoming year as part of contract negotiations.
  • Private Providers of Children and Youth Services must submit complete Cost Reports and supportive documentation on an annual basis. The Cost Report will be completed for the period of July 1 through June 30 and for each annual reporting period thereafter. The Department’s Office of Children, Youth, and Families (OCYF) will provide state level oversight to ensure accuracy, transparency, proper allocations and allowability.
  • Providers may apply for a one month extension to the determined due date.
  • The Department may consider provider applications for a two-year rate consideration; however, the provider retains the right to submit annually.
  • Providers retain the ability to submit additional information in the event of significant changes affecting costs incurred occurring after the reported year.
  • The State Review Process will be completed in no more than 120 days from the receipt of a complete provider submission. The approved Cost Report will be shared with counties and the provider within five days of completion of the review to facilitate the county-provider contract rate negotiations.
  • Any provider that does not meet the deadline (or extended deadline with approval) will receive an automatic continuation of the previous year’s state determined allowable calculations for federal/state level of participation as the basis for county negotiations. This continuation of allowable cost determinations will only be valid for one year. The county(ies) will make efforts to ensure the provider complies with the rate methodology requirements for the next contracting period.
  • If a provider fails to comply with the Department rate methodology after the one year extension, the provider will no longer be eligible for federal/state dollars. The county may still contract with the provider utilizing 100% county funds.
  • Counties must provide written confirmation of the total federal dollars paid to each provider for purchased services by October 31 of each year. This information is critical to providers being able to complete their independent audits in a timely manner.
  • The Department shall have the authority to conduct enhanced provider reviews on a regular basis as continued validation of the rate methodology and review of the details used by CPAs for submission.
  • The Department has the authority to require provider submission of time study information (or other approved methodology data) to support claiming for activities allowable for federal Title IV-E funding.
  • The Department will develop, in conjunction with providers and counties, a dispute resolution process to address areas of disagreement with the State Review Process findings.
  • Funds necessary to address the development and implementation costs of a time study process for providers will be calculated and included in the Department’s annual funding request submission. This investment will support improved accuracy and timeliness related to submission of claims for federal funds and elevated accountability for use of state dollars.
  • The Department will support development and delivery of a training curriculum for CPAs, provider and county staff to ensure complete and accurate completion of the required AUP process.
  • The Department will convene a Review Committee comprised of county, state and provider agency representatives on a regular basis (annually for the first three years of implementation than biannually thereafter) to review the Rate Methodology Process and make recommendations for improvements.
For further information, please contact my office 717-783-1918.

Thank you for your consideration!

Introduced as HB1534