(g) For payment rates in effect for state fiscal year
(SFY) 2002 and 2003, a rate-setting model is applied to child-placing
agencies' and residential care facilities' cost report information
included within the rate-setting population defined in subsection
(f) of this section. Three allocation methodologies are used in the
rate-setting model to allocate allowable costs among the levels of
care of children that are served. The methodologies are explained
below and are applied as follows:
(1) The first methodology is a staffing model, validated
by a statistically valid foster care time study, driven by the number
of direct care and treatment coordination staff assigned to a child-placing
agency or residential care facility to care for the children at different
levels of care. The staffing model produces a staffing complement
that is applied to direct care costs to allocate the costs among the
levels of care.
(A) Staff positions reported on the direct care labor
area of the cost report are grouped into the following categories
to more clearly define the staffing complement required at each level
of care:
(i) case management;
(ii) treatment coordination;
(iii) direct care;
(iv) direct care administration; and
(v) medical.
(B) A categorized staffing complement for each Level
of Care 1 through 6 is derived as follows:
(i) A 14-day foster care time study is applied to a
representative sample of residential care facilities and child-placing
agencies that completed a cost report.
(ii) Contracted staff, or employees, within the sampled
facilities complete a foster care time study daily activity log that
assigns half-hour units of each employee's time to the individual
child(ren) with whom the employee is engaged during the time period.
By correlating the distribution of the employee's time with the level
of care assigned to each child, the employee's time is distributed
across the Levels of Care 1 through 6.
(iii) The foster care time study daily activity log
also captures the type of activity performed. The total amount of
time spent in each of these activities is a component in determining
the number of staff needed in each of the categories included in the
staffing complement. The activities performed include:
(I) care and supervision;
(II) treatment planning and coordination;
(III) medical treatment and dental care; and
(IV) other (administrative, managerial, training functions,
or personal time).
(iv) An analysis of the cumulative frequency distribution
of these time units by level of care of all children served in the
sample population, by category of staff performing the activity, and
by type of activity, establishes appropriate staffing complements
for each level of care in child-placing agencies and in residential
care facilities. These time units by level of care are reported as
values that represent the equivalent of a full-time employee. The
results are reported in the following chart for incorporation into
the rate-setting model:
Attached Graphic
(v) The foster care time study should be conducted
every other biennium, or as needed, if service levels substantially
change.
(C) Staff position salaries and contracted fees are
reported as direct care labor costs on the cost reports. Each staff
position is categorized according to the staffing complement outlined
for the time study. The salaries and contracted fees for these positions
are grouped into the staffing complement categories and are averaged
for child-placing agencies and residential care facilities included
in the rate-setting population. This results in an average salary
for each staffing complement category (case management, treatment
coordination, direct care, direct care administration, and medical).
(D) The staffing complement values, as outlined in
the chart at paragraph (1)(B)(iv) of this subsection, are multiplied
by the appropriate average salary for each staffing complement category.
The products for all of the staffing complement categories are summed
for a total for each level of care for both child-placing agencies
and residential care facilities. The total by level of care is multiplied
by the number of days of service in each level of care, and this product
is used as the primary allocation statistic for assigning each provider's
direct care costs to the various levels of care.
(E) Direct care costs include the following areas from
the cost reports:
(i) direct care labor;
(ii) total payroll taxes/workers compensation; and
(iii) direct care non-labor for supervision/recreation,
direct services, and other direct care (not CPAs).
(2) The second methodology allocates the following
costs by dividing the total costs by the total number of days of care
for an even distribution by day regardless of level of care. This
amount is multiplied by the number of days served in each level:
(A) direct care non-labor for dietary/kitchen;
(B) building and equipment;
(C) transportation;
(D) tax expense; and
(E) net educational and vocational service costs.
(3) The third methodology allocates the following administrative
costs among the levels of care by totaling the results of the previous
two allocation methods, determining a percent of total among the levels
of care, and applying those percentages:
(A) administrative wages/benefits;
(B) administration (non-salary);
(C) central office overhead; and
(D) foster family development.
(4) The allocation methods described in paragraphs
(1) - (3) of this subsection are applied to each child-placing agency
and residential care facility in the rate-setting population, and
separate rates are calculated for each level of care served. Rate
information is included in the population to set the level of care
rate if the following criteria are met:
(A) Providers must have at least 30% of their service
days within Levels of Care 3 through 6 for residential settings. For
example, for the provider's cost report data to be included for calculating
the Level of Care 3 rate, a provider must provide Level of Care 3
services for at least 30% of their service days.
(B) For Levels of Care 5 and 6, a contracted provider
could provide up to 60% of "private days" services to be included
in the rate-setting population. They must provide at least 40% state-placed
services.
(5) Considering the criteria in paragraph (4) of this
subsection, the rate-setting population is fully defined for each
level of care. Based on this universe, each level of care rate will
be established by the group's central point or central tendency. The
measure of central tendency is defined as the mean, or average, of
the population after applying two standard deviations above and below
the mean of the total population.
(6) The total cost per day for each child-placing agency
and residential care facility is projected using the IPD-PCE Index
from the period covered in the cost report to September 1 of the second
year of the biennium, which is the middle of the biennium that the
rate period covers. Information on inflation factors is specified
in subsection (h) of this section.
(h) For payment rates in effect for state fiscal year
(SFY) 2002 and 2003, DFPS uses the Implicit Price Deflator - Personal
Consumption Expenditures (IPD-PCE) Index, which is a general cost
inflation index, to calculate projected allowable expenses. The IPD-PCE
Index is a nationally recognized measure of inflation published by
the Bureau of Economic Analysis of the United States Department of
Commerce. DFPS uses the lowest feasible IPD-PCE Index forecast consistent
with the forecasts of nationally recognized sources available to DFPS
when the rates are prepared. Upon written request, DFPS will provide
inflation factor amounts used to determine rates.
(i) All reimbursement rates will be equitably adjusted
to the level of appropriations authorized by the Legislature.
(j) There will be a transition period for the fiscal
year 2002-2003 biennium. During this period current rates will not
be reduced, and any increased funding will be applied to those levels
of care that are less adequately reimbursed according to the methodology.
Since increased funding was appropriated at a different percentage
for each year of the 2002-2003 biennium, the rates will be set separately
for each year instead of setting a biennial rate, and inflation factors
will be applied to the middle of each year of the biennium.
Cont'd... |