Medicaid Report on Payables and Receivables

CENTERS for MEDICARE & MEDICAID SERVICES

CENTERS FOR MEDICARE & MEDICAID SERVICES (CMS)
INSTRUCTIONS FOR COMPLETING

MEDICAID REPORT ON PAYABLES AND RECEIVABLES

(FORM CMS-R199)

June 2005

Table of Content

Pulpose

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Background

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Due Date for Submission of the Fonn CMS-R199

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Certification

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Fonn CMS-R199 Line Item Descriptions

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Work Paper Standards

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Appendix (Fonn CMS-R199)

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I. Purpose

The purpose of this document is to identify reporting requirements by State Agencies for the
Medicaid Report on Payables and Receivables (Form CMS-R199), also known as the Medicaid
Incurred but Not Reported (IBNR) Survey.

II. Background
Medicaid
Established under Title XIX of the Social Security Act, Medicaid is the primary source of health
care for a large population of medically vulnerable Americans, including poor families, the
disabled, and persons with developmental disabilities requiring long-term care. The Medicaid
program is jointly funded by a cooperative venture between the Federal and State governments.
States set eligibility, coverage, and payment standards within broad statutory and regulatory
guidelines that include providing coverage to persons receiving Supplemental Security Income
(disabled and elderly population), low income families, the medically needy, pregnant women,
young children, low-income Medicare beneficiaries, and certain other groups, covering at least
ten services mandated by law, including hospital and physician services, laboratory tests, family
planning, nursing facility services, and health screening for children under the age of twenty-one.
State governments have a great deal of programmatic flexibility to tailor their Medicaid
programs to individual State circumstances and priorities. Accordingly, there is a wide variation
in the services offered by States.
Although the Medicaid programs are administered by the States, each State must operate its
program under a State Plan, submitted to and approved by CMS, detailing eligibility, benefits,
payment rates, and other program features. Under Medicaid, State payments for both medical
assistance (MA) and administrative (ADM) costs are matched with Federal funds. The Federal
government matches the state MAP expenditures using a rate called Federal medical assistance
percentage (FMAP). The FMAP rates are determined annually for each State by a formula based
upon the relationship ofthe State's average per capita income level to the national income level.
The FMAP is limited to a minimum of fifty percent and a maximum of eighty-three percent ­
with the exception of higher matching rates for MAP expenditures related to Indian Health
Facility (one hundred percent), family planning (ninety percent) services and enhanced FMAP
rates for breast and cervical cancer and for the State Children's Health Insurance Program
(SCHIP). The basic Federal matching rate for State Medicaid ADM expenditures is fifty
percent. Higher rates ranging from seventy-five percent to one hundred percent may apply to
certain other ADM costs such as Medicaid automated claims processing systems, skilled
professional medical personnel, family planning, and immigration status verification status
systems. The Federal share of State Medicaid expenditures for both MAP and ADM is referred
to as Federal Financial Participation (FFP).

Incurred but Not Reported (IBNR) Costs
IBNR costs result from Medicare or Medicaid medical services incurred but not paid as of
September 30, the Federal Government's fiscal year end. The Medicaid amount is the net of
unreported expenses incurred by the States less amounts owed to the States for overpayment of

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Medicaid funds to providers, anticipated rebates from drug manufactures, settlements of probate
and fraud and abuse cases, and anticipated recoveries from other liable parties such as other
health or liability insurance or via medical liability lawsuits (third party liabilities).
The Chief Financial Officer (CFO) Act of 1990, as amended by the Government Management
Reform Act (GMRA) of 1994, requires government agencies to produce auditable financial
statements. Because CMS fulfills its mission through its contractors and the States, these entities
are the primary source of information for the financial statements. There are three basic
categories of data: expenses, payables and receivables. The Form CMS-64 is used to collect data
on Medicaid expenses. The Form CMS-R199 is used to collect Medicaid payable and receivable
accounting data from the States.

III.

Due Date for Submission of the Form CMS-R199

The CMS requests that States complete and return the lBNR sUlvey by September 15 for the
current fiscal year.
Since most of the States and Territories operate on a June 30 fiscal year-end and the Fonn CMS­
R-199 is due before most State Comprehensive Annual Financial Reports (CAFRs) are audited,
States are instructed to submit their best estimate on the lBNR sUlvey. Based upon the need to
have the best estimate for the Medicaid IBNR, the CMS also requests that States submit updated

IBNR Surveys no later than April 30.
Note: If the September 15 and/or April 30 due dates occur on a holiday or a weekend, the report
is due the following Federal workday.

IV.

Certification

Certification of the Fonn CMS-R199 by the State Chief Financial Officer (CFO) or designee is
required. The CFO or designee certifies that the IBNR data submitted has been reviewed, is
based on or in agreement with the amounts verified by State auditors, and is the best available
estimate for the reporting period. The name of a contact person is also required in the event that
CMS has questions concerning the submitted data.

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v. Form CMS-R199 Line Item Descriptions
The Form CMS-R199 consists of three sections: Section I - Medicaid Accounts Payable; Section
II - Medicaid Accounts Receivable; and Section III - Average Days. Sections I and II require
that the States identify the CAFR period that the data is based upon. Sections I and II also
require that States report the latest CAFR data as well as CAFR data for the previous year. For
each reporting requirement in Sections I and II, States are required to enter total costs as well as
the portion known as Federal Financial Participation. Refer to the following formula when
reporting costs in Sections I and II:
Total =State Portion +Federal Financial Participation.

Medicaid Accounts Payable
Medicaid Accounts Payable represents amounts owed by the State to providers for services
rendered and for State and local administrative expenses as of the dates indicated below, but
excluding amounts paid and reported on the Quarterly Medicaid Statement of Expenditures,
(Form CMS-64) for the quarter ending as of the dates indicated on the survey.
Line 1, Total Medical Assistance Accounts Payable, equals claims that have been incurred by
providers but not yet submitted to the State; claims submitted by providers but not yet processed
or paid by the State; cost report settlements; and provider underpayments.
Line 2, Payments Owed by the Statefor Medicaid State and Local Administrative Expenses,
equals Medicaid State and local administrative expenses owed by the State.
Line 3, Other Accounts Payable, equals any payables that have not been captured in Lines lor 2.
If an amount is entered on Line 3, the State must identify the nature of the payable.

Medicaid Accounts Receivable
Medicaid Accounts Receivable represents amounts owed to the State form various sources
excluding the Federal Government and any amounts received and reported on the Form CMS­
64 for the quarter ending as of the dates indicated on the survey.
Line 1, Medical Assistance Accounts Receivable, consists ofthe following items:
Third Party Liabilities

Amounts billed and expected to be recovered from
other medical or liability insurance programs (including
Medicare) and amounts expected to be recovered
through medical liability lawsuits.

Probate Court Cases

Receivables resulting from cases involving wills and
estates. Probate court is a specialized court or division
of a state trial court that considers only cases
concerning the distribution of deceased persons' estate.

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Fraud and Abuse Cases

Receivables due because it has been detennined that
there was fraud and/or abuse on the part of a
physician/provider/supplier. Fraud is an intentional
misrepresentation or deception which could result in an
unauthorized benefit to a person or persons and usually
comes in the form of a false statement requesting
payment under the Medicare/Medicaid program. Abuse
usually involves payment for items or services where
there was no intent to deceive or misrepresent but the
outcome of poor inefficient methods results in
unnecessary costs to the Medicare/Medicaid program.

Provider Overpayments

Overpayments a provider has received in excess of
amounts due and payable under the statute and
regulations .

Audits of Annual Cost Reports

Receivables resulting from annual cost report audits.

Drug Rebates

States, CMS and drug manufacturers have an agreement
whereby if a State's Medicaid population (according to
data the States provide to the drug manufacturer) uses a
specific drug above a predetermined threshold, the drug
manufacturer will provide a rebate within 30 days to the
State.

Other

Any receivables not captured on the above lines.

Line 2, Allowance for Uncollectible Amount for Above Accounts, is an estimate of receivables
not likely to be collected.
Line 3, Total Net Accounts Receivable, is the sum of amount reported on Line 1 minus the
allowance amount on Line 2.
Line 4, Other Receivable not in CAFR, is used to record any receivables not captured or reported
in the Comprehensive Annual Financial Report. If an amount is entered on Line 4, the State
must identify the nature of the receivable.

Average Days
The CMS also uses an alternative methodology based on average days to calculate the IBNR
estimate. This methodology estimates the length of time from when services are provided to a
Medicaid beneficiary until reimbursement by the State to the provider is made. The average
days provided is multiplied by the average daily claims volume to arrive at a year-end payable
estimate. The result is compared to amounts reported in the IBNR survey for reasonableness.

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VI.

Work Paper Standards

States must document its process for identify ffiNR costs. Work: papers should be used to
document and support any decisions drawn relating to the process used and the costs reported on
the IBNR survey. Work papers should be prepared in a unifonn, clear and concise manner.
Work papers prepared by the States must be available upon request in the event that CMS
Regional Office staff, or other parties on behalf of CMS, comes onsite to review State Medicaid
ffiNR documentation.

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Appendix

(Medicaid IBNR Survey - Form CMS-R199)

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MEDICAID INCURRED BUT NOT REPORTED (IBNR) SURVEY
I. MEDICAID ACCOUNTS PAYABLE
Medicaid amounts owed by the State to providers for services rendered and for State and local administrative
expenses as of the dates indicated below. but excluding amounts paid and reported on the CMS-64 for quarter
ending as ofthe dates indicated below. (TOTAL =STATE +FEDERAL FINANCIAL PARTICIPATION (FFP))
Latest CAFR (9/301XX or
prior) as of
Total

FFP

Previous CAFR (9/301XX
or prior) as of
FFP

Total
(Whole dollars)

(Whole dollars)

1 - Total medical
assistance accounts
payable I
2 - Payments owed by th e
State for Medicaid State
and local administrative
expenses
3 - Other accounts
payable (define)
STATE
PHONE

CONTACT PERSON
FAX

_
_

ADDRESS

_

I hereby certify that I have examined the data reported for the periods ending as indicated above, and that to
the best of my knowledge and belief, it is based on and in agreement with, amounts verified by the State
Auditor.
Signature
Name (Printed)
Title

_
_
Date

_

Disclosure Statement: According to the Paperwork Reduction Act of 1995, no persons are required to respond to a
collection of information unless it displays a valid OMB control number. The valid OMB control number for this
information collection is 0938-0697. The time required to complete this information collection is estimated to
average 3 hours per response, including the time to review instructions, searching existing data resources, gather the
data needed, and complete and review the information collection. If you have any comments concerning the
accuracy of the time estimate(s) or suggestions for improving this form, please write to: CMS, P.O. Box 26684,
Baltimore, Maryland 21244 and to the Office of the Information and Regulatory Affairs, Office of Management and
Budget, Washington, D.e. 20503.

I Includes Claims incurred by Providers - not yet submitted to the State, Claims submitted by Providers - not yet
processed or paid by the State, Cost report settlements, and Provider underpayments

CMS-R199

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