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COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE APPENDIX H AGREED-UPON PROCEDURES FOR FEE-FOR-SERVICE PROGRAMS I. These procedures are to be performed for the period July 1, 2010 – June 30, 2011, regardless of the provider’s actual fiscal year-end. Level I Procedures: II. Units of Service 1. Obtain a list of all fee-for-service claims paid by the Pennsylvania Department of Public Welfare (DPW) and/or the counties/Administrative Entities from the Provider during the period of these procedures. 2. Reconcile the Provider’s list of paid claims to the Provider’s cash receipts journal and note any reconciling items and/or differences. 3. Select a random sample of 60 of the paid claims described in Procedure II,1, above. 4. For each of the sample of paid claims described in Procedure II,3, above: a. Obtain supporting documentation from the Provider. b. Inspect the supporting documentation described in Procedure II,4,a, above, as follows: 1. Verify that the supporting documentation includes evidence that the services were authorized. Include in the report a description of the Provider’s methodology of documenting this authorization. i. If there are 2 or more exceptions noted in the sample of 60 that indicate that the services were not authorized, proceed to Level II Procedures, below. 2. Verify that the supporting documentation includes evidence that the services were provided. Include in the report a description of the Provider’s methodology of documenting this existence/occurrence. i. If there are 2 or more exceptions noted in the sample of 60 that indicate that the services were not provided, proceed to Level II Procedures, below. III. Cost Allocation Plan: 1. Inquire if the Provider has a written cost allocation plan. If so, obtain the Provider’s cost allocation plan and include a copy in the report. If not, obtain an understanding of the Provider’s cost allocation plan, document that understanding, and include that documentation in the report. 1 COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE APPENDIX H AGREED-UPON PROCEDURES FOR FEE-FOR-SERVICE PROGRAMS IV. Direct and Indirect/Administrative Costs: 1. Select a random sample of 60 cash disbursements from a Provider-prepared list. This list should include both direct and indirect/administrative costs. 2. Vouch each of the 60 cash disbursements described in Procedure IV,1, above, to supporting documentation (invoices, etc.) and verify that the date paid, amount, and description included in the Provider-prepared list of disbursements agrees to the supporting documentation. a. If there are 2 or more exceptions noted in the sample of 60 that indicate a problem with the records not agreeing to the supporting documentation, proceed to Level II Procedures, below. 3. For any indirect/administrative costs included in the sample described in Procedure IV, 2 above, verify that each of these costs are allocated in accordance with the cost allocation plan. Note the total number of indirect/administrative costs tested and the number of exceptions. a. If there are 2 or more exceptions noted in the sample of 60 that indicate a problem with costs are not allocated in accordance with the cost allocation plan, proceed to Level II Procedures, below. V. Cost of Services Provided: 1. 2. 3. 4. 5. Obtain a schedule from the Provider of the total costs incurred for each service code that was paid by DPW and/or the counties / Administrative Entities during the period of these procedures. This schedule should also include the total units provided for each service code. In addition, this schedule should include the rates paid to the Provider for each service code. Compare the total units of service for each service code provided, as obtained in Procedure V,1, above to the list obtained from the Provider in Procedure II,1, above and note any differences. Obtain the data used to prepare the schedule in Procedure V,1, above, and trace each of the 60 cash disbursements described in Procedure IV,2, above, to this data and verify that these costs are included and that indirect/administrative costs are charged in accordance with the Provider’s cost allocation plan, described in Procedure III,1, above. Include in the report a copy of the schedule obtained in Procedure V,1, above. Calculate the excess (deficiency) of each rate over costs for each service code, both in terms of dollars per unit and a percentage. Included these calculations in the report. 2 COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE APPENDIX H AGREED-UPON PROCEDURES FOR FEE-FOR-SERVICE PROGRAMS VI. Other: 1. Include in the report any other information that comes to the attention of the accountant, in accordance with the American Institute of Certified Public Accountants’ Statements on Standards for Attestation Engagements Section 201, Agreed-Upon Procedures Engagements (AT§201.40). Level II Procedures: PLEASE NOTE THAT LEVEL II PROCEDURES ARE TO BE PERFORMED ONLY IF REFERRED TO IN LEVEL I PROCEDURE II 4 b 1 i, II 4 b 2 i, IV 2 a, OR IV 3 a, ABOVE, AND THEN ONLY AFTER DISCUSSING WITH AND OBTAINING PRIOR APPROVAL FROM DPW TO PROCEED TO LEVEL II. I. Units of Service 1. Select a statistically valid random sample based on a 90% Confidence Level of the paid claims described in Level I, Procedure II,1, above. a. Obtain supporting documentation from the Provider. b. Inspect the supporting documentation described in Level II, Procedure I,1,a, above, as follows: 1. Verify that the supporting documentation includes evidence that the services were authorized. 2. Project any exceptions to the population 3. Verify that the supporting documentation includes evidence that the services were provided. Include in the report a description of the Provider’s methodology of documenting this existence/occurrence. 4. Project any exceptions to the population II. Direct and Indirect/Administrative Costs: 1. Select a statistically valid random sample based on a 90% Confidence Level of the cash disbursements described in Level I, Procedure IV, 1, above. 2. Vouch each of the cash disbursements described in Level II, Procedure II,1, above, to supporting documentation (invoices, etc.) and verify that the date paid, amount, and description included in the Provider-prepared list of disbursements agrees to the supporting documentation. 3. Project any exceptions to the population 4. For any indirect/administrative costs included in the sample described in Level II, Procedure II, 2 above, verify that each of these costs are allocated in accordance with the cost allocation plan. Note the total number of indirect/administrative costs tested and the number of exceptions. 5. Project any exceptions to the population 3