Is RMTS allowing school districts to overclaim for Medicaid services?

April 14, 2016

Massachusetts Direct Service RMTS audit confirms that accurate documentation of all Medicaid services is the only way maintain compliance  

The use of random moment time studies (RMTS) to estimate costs related to Medicaid school-based health services has become standard in many school districts across the country but a recent report indicates that it may be leading to significant overpayment in Medicaid reimbursement with little documentation to support it.

The methodology, long used in the public sector for estimating labor distribution and now increasingly common in school districts, involves polling employees participating in a school-based health program at periodic intervals throughout the year to determine the amount of time personnel are spending on Medicaid reimbursable activities and then estimating costs for claiming federal Medicaid reimbursement. RMTS has become popular for a number of reasons, mainly because it is seen as an efficient and time-saving alternative to determining Medicaid costs. But according to a review of the state of Massachusetts’ Medicaid claiming practices released by the Office of Inspector General (OIG), it might not be the most accurate means of doing so and may be discouraging districts from properly documenting services, which can have repercussions beyond Medicaid reimbursement.

The report found that while Massachusetts is generally complying with Medicaid requirements, the use of the RMTS and errors in accurately reporting costs may have lead to overpayments to school districts within the state in excess of $700,000.

The overpayments were in part attributed to clerical errors made in preparing the cost reports, but also to the RMTS methodology in general, which allowed states to claim personnel costs for as many as 61 administrators as both direct and indirect costs, in direct violation of CMS guidelines. In addition to these findings, the auditors also found that because of software limitations, the State’s RMTS sample moments cannot be reproduced to test for statistical validity.

Furthermore, in an alarming majority of cases, school districts could not support sample moments coded as Medicaid-eligible direct services with documentation (therapists’ schedules, treatment notes, and student IEPs, etc.).  Out of the 200 random moments selected as a statistical sample, school districts could not provide support for 121 of these.  OIG estimates that 60.5% of RMTS moments do not have supporting documentation.

As is, districts are required to pay back any money received through interim payments throughout the year if the cost reconciliation process (relying on RMTS) shows that their actual costs were less than that received in interim payments. However, districts are currently not being held accountable for paying back funds for which they do not provide adequate documentation, as in the case of the 121 moments identified in Massachusetts for which no supporting documentation could be produced.

As OIG continues to conduct similar audits of states and runs into similar findings revealing overpayment due to RMTS, districts may be be required to produce such documentation and could be penalized for not being able to do so. And while proper documentation of services for the purposes of Medicaid reimbursement will likely become increasingly important for districts, such documentation is in their best interest for other reasons: namely, that maintaining accurate documentation of all services delivered is one of the most significant steps districts can take toward protecting themselves from due process claims and ensuring that IEP services are being delivered.

To find out more about Accelify’s leading service tracking software, visit https://www.accelify.com/products/accelitrack/. Accelify also provides school districts with expert cost reporting consulting services in states including, VA, LA, WI, and IL, and has a proven track record helping client districts optimize their cost reports to ensure they claim all allowable costs and maintain program compliance.