465 IAC 2-16-20 Allowable costs in the base rate and other cost based rates approved by the department; cost report required

Sec. 20. (a) Each residential treatment services provider shall submit to the department a cost report on an annual basis at the time and in the form required by the department. Failure to submit the cost report timely may result in delay in payment or nonpayment by the department for costs incurred or services rendered by the residential treatment services provider. (b) Any payments made to a residential treatment services provider will be made pursuant to a written agreement that is in a form specified by the department and executed by the parties. (c) The department will review each cost report for reasonableness and eligibility under Title IV-E, OMB circulars and the applicable CFR provisions described in section 12 of this rule. The department may, in its discretion, adjust historical costs to reflect current costs by applying a cost of living adjustment. Based on that review, the department will submit to the residential treatment services provider a final approved cost report that the department will use in calculating the applicable rates. (d) To be allowable, a cost must relate to one (1) or more of the categories described in section 4 of this rule. The cost must also generally satisfy the following criteria: (1) The cost is reasonable, necessary, and related to the care of children. (2) The cost is related to goods or services actually provided by the residential treatment services provider. (e) The department will mail to the residential treatment services provider a letter (rate letter) stating the base rate and other cost based rates that the department agrees to pay, for each applicable program for children whom the department has placed or may place with the residential treatment services provider. The rate letter will include the effective date of the new approved base rate and other cost based rates as approved by the department. The effective date will be not less than forty-five (45) days after the date of the letter. (f) If the residential treatment services provider accepts the rate offered by the department in the rate letter, such rate shall amend any agreement containing payment rates for placements currently in effect between the residential treatment services provider and the department. (g) Each cost report submitted under subsection (a) is subject to further review or audit by the department. Such a review or audit may result in a request for a rate adjustment as specified in a new rate letter issued and mailed to the residential treatment services provider. (h) If the residential treatment services provider has not been licensed, or operated a program for which a base rate or other cost based rate is required, for a period of at least twelve (12) months before the cost report is due to the department, the residential treatment services provider shall submit a cost report utilizing a comprehensive twelve (12) month operating budget for the new program at least ninety (90) days before the start of the program. The department will utilize its rate setting methodology as provided herein to establish a rate for the new program. The cost report shall be in the form specified or approved by the department. (i) The department will make payments to each residential treatment services provider for reasonable costs of the residential treatment services provider, based on the base rate and other cost based rates approved by the department for that residential treatment services provider.