ADMINISTRATIVE ACTIVITIES (SMAA) PROGRAM
On June 26, 2012, the Centers for Medicare & Medicaid Services (CMS) informed the California Department of Health Care Services (DHCS) that the SMAA program is on deferral, because implementation of DHCS’s approved SMAA claiming plan does not comply with the requirements detailed in the Office of Management and Budget (OMB) Circular A-87, including the time study, which is used as a basis for developing invoices. OMB Circular A-87 requires that any costs claimed be limited to those that are reasonable and necessary for the proper and efficient administration of the Medi-Cal program. Exceptions to the deferral include Los Angeles Unified School District, which uses a CMS-approved Random Moment Time Study (RMTS) system and the Santa Barbara County Education Office – Special Education, which was found to be compliant with OMB Circular A-87 by CMS.
The deferral applies retroactively to claims submitted on the CMS-64 SFY 2011-12 Quarter 2 invoice through June 30, 2012. To lift the deferral, CMS is requiring DHCS to implement a revised claiming plan that is in compliance with OMB Circular A-87.
Any invoices submitted for quarters after July 1, 2012, using the currently approved methodology, may be subject to deferral.
Claiming for SFY 2012-13 and SFY 2013-14
DHCS received CMS approval for interim claiming under the previously approved claiming plan in SFY 2012-13 until a revised claiming plan and new time study methodology is approved.
On March 18, 2013, DHCS submitted a request to CMS to continue using an interim claiming process for SFY 2013-14.
DHCS submitted the request again in August 2013. The request is currently under review by CMS.
Revised Statewide Claiming Plan and New Time Study Methodology
DHCS submitted a SFY 2012-13 revised statewide claiming plan and new time study methodology in October 2012, which resulted in extensive questions and comments by CMS and has not yet been approved.
CMS required DHCS to develop a deferral certification process that required the submission of additional documentation from school claiming units to support reimbursement for deferred invoices. Once the supporting documentation was submitted and approved by CMS, the claims would be reimbursed. In August 2012, California developed and implemented the certification process. However, CMS suspended approval of reimbursement under this process in January 2013 and on May 7, 2013, directed California to develop a reasonableness test to assist them in the review and approval of the deferral certification submissions.
DHCS submitted two reasonableness tests to CMS on August 15, 2013 and is working collaboratively with CMS to answer their questions and agree to implement one of the tests.
DHCS is currently developing a progress report of all the deferral certification and supporting documentation submittals received from each of the school claiming units since August 2012. This report will detail the name of the school claiming unit, the date received, the date reviewed and approved by DHCS, the date submitted to CMS, and approval from the deferral certification process. DHCS will provide this report to the LEC and LGA Co-Chairs by September 20, 2013. This report will be shared with the LEAs through their assigned LEC and LGA Coordinator, and LEAs may also request their specific information from DHCS.
Before approving interim claiming for SFY 2013-14, CMS has requested that DHCS develop milestones to ensure progress is made toward moving to RMTS and releasing the deferrals. The milestones are:
- Develop a reasonableness test to be applied to deferred invoices;
- Develop a revised statewide claiming plan and new time study methodology based on RMTS. For dates of service beginning July 1, 2014, DHCS will revise the statewide claiming plan to require the use of a statewide Random Moment Time Study (RMTS) for the purpose of calculating the costs of SMAA performed by California schools. Worker logs will be eliminated as a method of time study;
- Develop a back casting methodology from data collected through the statewide RMTS to reconcile claiming for FY 2012-13 and FY 2013-14.
DHCS submitted the milestones document to CMS on August 15, 2013 and is meeting frequently with CMS to answer questions and resolve outstanding issues.
DHCS will continue to provide deferral updates as information becomes available. LEAs may contact their LEC/LGA with questions or email at
DHCS will also develop a Q&A document based on inquiries received through the mailbox. This document will be made public through the SMAA web page and will be updated periodically.