Strategic Considerations National Resource Center for - - PowerPoint PPT Presentation
Starting Financial Management Services in CLP & VD-HCBS: Strategic Considerations National Resource Center for Participant-Directed Services 6/3/10 Mollie Murphy Today FMS: What is it? Why have it? Models of FMS: Which is right
National Resource Center for Participant-Directed Services 6/3/10 Mollie Murphy
2
FMS: What is it? Why have it? Models of FMS: Which is right for you? Providing FMS: Approaches
Piggybacking on an existing in-state program Procuring services from a qualified provider “In-house” at the AAA or SUA
Pure Do-it-yourself A hybrid model
3
FMS is Financial Management Services FMS is a participant-directed support; FMS supplements a
Successful FMS ensures the following:
Participants act as employers or co-employers in compliance with
federal, state and local laws
Employment taxes, workers’ compensation and other insurances
are managed and paid in compliance with relevant laws
Payments are made in accordance with program rules and
participant budgets
4
Directing and controlling one’s service and individual
Early research in the Cash & Counseling program showed
Robust FMS allows participants to focus on directing and
5
Enrollment
Employer enrollment Worker enrollment Vendor enrollment
Budget Management Payments Taxes and Insurance Reporting Communication
6
Fiscal/Employer Agent
Government Fiscal/Employer Agent Vendor Fiscal/Employer Agent
Agency with Choice
7
Participant (or his/her representative) is common law
Participant/representative employer designates the FMS
As agent, the F/EA has joint tax liability and manages all
IRS has specific procedures outlining the relationship
8
The duties of these models of Fiscal/Employer Agent are the same
(aside from how IRS Form 2678 is filed on behalf of each employer)
The difference is what kind of entity acts as the F/EA Government Fiscal/Employer Agent: government entity is agent and
takes on joint tax liability with the employer
Government entity is responsible for performing F/EA duties OR Government entity can contract with a sub-agent
Sub-agent can be a vendor and the sub-agent ALSO takes on
joint liability for federal taxes
Vendor Fiscal/Employer Agent: a non-government entity (vendor) is
agent and takes on joint tax liability with the employer
Non-government entity is responsible for performing F/EA duties Government entity contracts with vendor; government entity takes
9
Agency (not participant) is common law employer Participant or representative may act as co-
Participant or representative can identify workers
In general, Agency with Choice is considered a less
10
Who is the employer? The agency, but participants can refer workers to the agency The participant Who pays workers and manages taxes and insurance? The Agency with Choice The F/EA Who has liability for taxes? The Agency with Choice The F/EA has joint liability with the participant
11
Who trains workers? The agency has ultimate responsibility for this, but significant input can come from the participant The participant, but a counselor can help Who makes decisions about hiring workers? The participant refers workers to the agency, but the agency makes the final decision about hiring workers The participant, but the program may have rules about worker qualifications In whose name is the workers’ compensation policy? The Agency with Choice The participant, but the F/EA procures and manages the policy
12
Who sets the rate of pay for workers? The agency has ultimate responsibility for this, but significant input can come from the participant; the agency must maintain equity across employees per state & federal law The participant, but a program may have a set rate range
Who determines whether a worker’s criminal background disqualifies the worker from being hired?
The Agency with Choice The participant, but the program can set parameters What is the cost of these services? Usually between $65 and $125 per participant, per month Usually between $65 and $125 per participant, per month
13
F/EA supports “pure” participant direction: the
Agency with Choice can be easier to establish
See the handout: FMS Model Quiz
14
Identify other, established participant direction programs in
The cost of FMS is influenced heavily by economies of
15
The performance of the FMS provider will be known by the
program you are piggybacking on
An RFP may not be necessary since the FMS provider is already
The FMS provider may be able to launch services very rapidly
since it is already operational in the state
The FMS provider should already be familiar with participant
direction and the culture of your state
FMS providers may be apprehensive about investing in serving a
program that can only commit to 1-2 years of operation; by piggybacking, you may be able to get a competitive rate because the provider has another long-term contract in the state
16
All participant-directed programs are not alike and
The VD-HCBS program is a pure “Cash and Counseling”
This means that the duties of the FMS provider in an
Therefore, the FMS provider’s capabilities may not fit what
17
Get in-depth information from other programs in your state that use the
FMS provider about the provider’s performance
Develop a comprehensive list of what you need the FMS provider to do
in your CLP/VD-HCBS program (contact NRCPDS for help developing this list; there are many different ways to structure what the AAA/SUA does and what the FMS provider does)
Get complete information from other programs in your state and/or the
FMS provider on the duties and responsibilities of the FMS provider in the existing program
Find out from the FMS provider if they have the capability to perform the
duties your program requires
Find out what the FMS provider’s fees would be to serve your program
Is there a standard monthly or transaction fee? What is it? Are there any “start-up” or other fees?
18
VD HCBS & CLP program used an F/EA provider already
The existing Medicaid program did not have budget
The VD HCBS program planned full budget authority,
The AAA and F/EA had to develop many aspects of the
19
VD HCBS & CLP program used an F/EA provider already serving
a Medicaid Cash and Counseling program serving 3500 participants
The AAA and SUA were able to use almost an exact program
structure as was being used for the Cash and Counseling program
Because the programs were so similar, Policy and Procedure
manuals, forms, and processes could be shared and re-used across the programs
The F/EA provider was able to launch operations for the VD
HCBS program very quickly because very few changes had to be made to existing operations
By increasing the number of participants served by the F/EA
provider, a very competitive per participant fee was negotiated
20
Go through a procurement process to select the
Go through a competitive process to get
21
An RFP process can be labor-intensive and slow going Providers may be apprehensive about investing in a
If you are considering this option, contact NRCPDS to get
Review the handout called Pre-procurement Tip Sheet
22
AAA or SUA performs all functions as the Financial Management
Services provider (either Agency with Choice or F/EA) Pros
Counseling, administrative oversight and FMS can all be tightly
integrated at the AAA/SUA
AAA/SUA can develop expertise in FMS; can serve as FMS
provider in future and for other programs in the state
AAA/SUA can maintain more of the VD HCBS oversight fee
“in-house”; can be a way to utilize existing AAA/SUA staff
AAA/SUA staff have expertise in working with participants and
this can be very beneficial in supporting participants to navigate the financial aspect of their programs
23
FMS is complex and the learning curve is steep; taking on
FMS can require a significant upfront investment in tools
When the AAA or SUA is an FMS provider, they take on a
Performing FMS in-house can take away from areas where
FMS is still a relatively young industry, so tools and
24
Consider a hybrid approach
Carve out the tasks that the AAA or SUA is well-positioned to perform
(e.g. enrolling participants as employers, managing individual budgets, verifying timesheets)
Contract with a reporting agent that is experienced with participant
direction programs and payroll to manage payments, taxes, and insurance
A reporting agent is a specific type of agent, per IRS rules. Unlike a
Fiscal/Employer Agent, a reporting agent does not take on joint liability with an employer. Therefore, in this hybrid approach, the AAA/SUA would have the joint liability with the employer.
If the AAA/SUA does not want joint liability, then a contract should be
executed with an experienced F/EA. The AAA/SUA can still carve out certain tasks and will likely therefore pay a lower rate to the F/EA than if the F/EA performed all tasks.
Review handout called In-house AAA FMS
25
The National Resource Center for Participant-Directed
We recognize that programs are unique and face unique
We are available to provide one-on-one help or direct you
There is only so much that can fit into a large webinar; but
Please contact us as you consider implementing FMS
26