PDD-43-12-00007-A Financial Reporting for Providers of OPWDD Services

1/30/13 N.Y. St. Reg. PDD-43-12-00007-A

NEW YORK STATE REGISTER

VOLUME XXXV, ISSUE 5

January 30, 2013

RULE MAKING ACTIVITIES

OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES

NOTICE OF ADOPTION

 

I.D No. PDD-43-12-00007-A

Filing No. 56

Filing Date. Jan. 15, 2013

Effective Date. Feb. 01, 2013

Financial Reporting for Providers of OPWDD Services

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Action taken:

Amendment of Subpart 635-4 and sections 679.6, 686.13 and 690.7 of Title 14 NYCRR.

Statutory authority:

Mental Hygiene Law, sections 13.09(b) and 43.02

Subject:

Financial Reporting for Providers of OPWDD Services.

Purpose:

To expand the applicability of reporting requirements and to revise the sanctions for failure to report.

Substance of final rule:

Financial Reporting for Providers of OPWDD Services

Effective Date: February 1, 2013

The final regulations amend pre-existing OPWDD regulations concerning financial reporting, record keeping and audit requirements.

Pre-existing OPWDD regulations in 14 NYCRR Subpart 635-4 applied to facilities certified as Individualized Residential Alternatives, Community Residences, Day Treatment Facilities and ICF/DDs. The final amendments expand the applicability of this Subpart to include Medicaid Service Coordination, clinic treatment facilities (“Article 16 Clinics”) and all Home and Community Based Waiver Services. All of the requirements in Subpart 635-4 now apply to the additional services except that the requirement for submission of budget information apply only to providers which are applying for an operating certificate.

The pre-existing regulations provided for two 30 day extensions of the cost report filing deadlines. The final regulations allow only one 30 day extension.

For providers which fail to file their cost reports by the reporting deadline, prior regulations allowed for the imposition of a 5 percent reduction in the operating portion of the rates, fees or prices. In lieu of this, the final regulations require that for the period of time during which a provider’s cost report is outstanding, providers shall be subject to a reduction in reimbursement in an amount equal to 2 percent. For a provider subject to this sanction, the 2 percent reduction shall apply to reimbursements for the following: ICF/DD services (Intermediate Care Facilities for Persons with Developmental Disabilities), Medicaid service coordination, day treatment services, clinic services, and the following HCBS waiver services: residential habilitation services (community residential habilitation in a community residence, residential habilitation in an IRA, and residential habilitation in family care), community habilitation services, day habilitation services, prevocational services, supported employment services, respite services, plan of care support services, and family education and training services. This penalty will not be restored once a provider’s cost report is received. Providers will also be subject to this sanction if they fail to meet deadlines for revised cost reports or other requested information.

As is the case with the pre-existing regulations, a penalty applies if a provider does not submit a cost report by the due date and also if OPWDD determines that a cost report must be revised and the provider does not submit a revised cost report within 30 days. The final regulations require OPWDD to give the provider written notice that it missed the cost report deadline or that it must submit a revised cost report. The OPWDD notice will give the provider a final opportunity to submit the cost report (15 days for an initial cost report and 30 days for a revised cost report) or explain that it cannot submit the cost report in that time period because of unforeseeable factors beyond its control. If the provider submits the cost report or shows that there were unforeseeable factors beyond its control that prevented it from submitting on time, it will avoid the penalty. However, the penalty will be imposed if the provider submits an explanation of the unforeseeable factors and OPWDD sets a new deadline for the cost report, but the provider misses this new deadline.

The final regulations change the procedures in cases where it is the provider that discovers that a cost report is incomplete, inaccurate or incorrect, and where the provider makes this discovery before receiving its new base period rate, fee or price. The final regulations eliminate the pre-existing requirement that the provider first give OPWDD notice and then follow up with a revised cost report within 30 days. Instead, the final regulations simply require the provider to submit a revised cost report. Also, the final regulations eliminate the pre-existing penalty in this situation, but keep the provision that allows, rather than requires, that OPWDD revise the rate, fee or price based on the revised cost data, and then only if and when OPWDD receives the revised cost report.

The final regulations apply the provisions in section 635-4.6 to HCBS Waiver services and MSC. Section 635-4.6 states that provider records, reports and information are subject to audit for six years and contains procedures for review of audit findings. However, the law already subjects providers of these services to audit and record retention requirements.

The final regulations make several clarifications to requirements for the records that providers must keep. First, the regulations clarify that service-specific records of expenditures and revenues shall be accounted for on either a program type or a site specific basis. Second, the regulations state that providers must maintain underlying records which formed the basis for or which support the cost, budget and other reports and data submitted to OPWDD. Third, the regulations clarify that reports and records that were not used to establish a rate, price or fee must be kept until the later of six years from the due date or date of submission, and that reports and records that were used to establish a rate, price or fee must be kept for six years after the rate, price or fee was set.

The final regulations change pre-existing regulations in sections 679.6, 686.13 and 690.7, concerning clinic treatment facilities (“Article 16 clinics”), residential habilitation services and day treatment services respectively, to conform to the new language in Subpart 635-4 and/or to refer to Subpart 635-4.

The final regulations also make non-substantive changes to pre-existing language to enhance clarity and comprehension.

Final rule as compared with last published rule:

Nonsubstantive changes were made in section 635-4.5(a).

Text of rule and any required statements and analyses may be obtained from:

Barbara Brundage, Director, Regulatory Affairs Unit, OPWDD, 44 Holland Avenue, Albany, NY 12229, [phone], email: [e-mail]

Additional matter required by statute:

Pursuant to the requirements of the State Environmental Quality Review Act, OPWDD, as lead agency, has determined that the action described herein will have no effect on the environment, and an E.I.S. is not needed.

Revised Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

Minor changes were made to the proposed regulation in response to a public comment which requested clarification of a specific requirement. The revised language clarifies that service-specific financial records shall be accounted for on either a program type or a site specific basis.

These changes do not necessitate revisions to the previously published Regulatory Impact Statement, Regulatory Flexibility Analysis for Small Business and Local Governments, Rural Area Flexibility Analysis or Job Impact Statement.

Assessment of Public Comment

A provider association submitted one comment which contained a suggestion to clarify one aspect of the regulations.

Comment: A provider association commented that, as currently written, the second sentence in subdivision 635-4.5(a): “These service-specific financial records shall be maintained at either the program or site level. . .” is easily misinterpreted to mean that the records must be physically kept at the program site. The provider association recommended that OPWDD reword the sentence in question to clarify the requirement. The provider association recommended the following language: “Providers must utilize unique cost identifiers that will allow expenses to be clearly attributable to specific programs/sites. . . .”

Response: OPWDD appreciates the provider association’s recommendation and agrees that the sentence could be reworded to provide clarification about the requirement. OPWDD took the suggested language into consideration and decided to reword the second sentence in subdivision 635-4.5(a) to read as follows: “These service-specific financial records shall be accounted for on either a program type or a site specific basis in order to correspond with the cost report form and format specified by OPWDD.” OPWDD considers that this language provides the necessary clarification and is consistent with the intent of the requirement.