RCPA - Rehabilitation and Community Providers Association


MR Update #05-18: OMR Work Groups Address Rate Setting and Provider Qualifications
September 2, 2005

Rate Setting
The Office of Mental Retardation (OMR) has established a work group addressing statewide rate setting as requested by the Centers for Medicare and Medicaid Services (CMS) review of the state’s Consolidated Mental Retardation Waiver. PCPA’s representative on this work group is Susan Blue, CEO, Community Services Group.

The work group presented the following options to Deputy Secretary Casey on
September 1. Casey will make the final decision on this issue.

  • Approve the cost-based methodology of rate setting using historical costs.
  • OMR needs to re-evaluate the methodologies after developing a rate history based on consistently applied standard service definitions.
  • Continue to use this work group to fully develop this approach.
  • Distribute a draft rate setting bulletin for public comment.
  • Provide regional training sessions for counties and providers.
  • Begin transition of counties and providers by February 1, 2006.
  • FY 2006/07 will have counties and providers using the standard methodology to gain experience and provide OMR with feedback on its use; but Chapter 4300 regulations and cost settlement will continue.
  • FY 2007/08 will be the first year that all counties and providers use the standard rate setting methodology.
  • The work group plans to continue to meet to develop criteria for the methodology.

Provider Qualifications
Four areas were agreed to at the July meeting of OMR’s Provider Qualifications Work Group addressing CMS issues with the consolidated waiver:

1. licensing and accreditation and approval status,
2. proof of financial viability,
3. training plan specific to services and individuals, and
4. a quality management plan.

OMR may decide to use the numerous recommendations from the initial Provider Qualifications Subcommittee of the Planning Advisory Committee as an information bulletin about what self-advocates and families believe are critical aspects for providers.

At the August work group meeting, further discussion provided clarification regarding the criteria.


  • Licensing pertains to agencies providing services which require licensing and regulations (governed by Chapters 2380, 2390, 6400, 6500, and 6600, Title 55, Pennsylvania Code) and means they must continue to be licensed.
  • There was much discussion and disagreement regarding accreditation and it was decided that this would be a positive for an agency, but not a requirement for provider qualification.
  • The approval process would be that as required by CMS to be a Medicaid approved provider (staff background checks, ages, etc.).

Financial viability means a provider, depending on whether an agency provider or an individual provider, has available:

• Financial reports, i.e., balance sheet, income statement, auditor’s letter, management letter, schedules, and cash flow statement;
• Providers not required to have an audit would be required to have an unaudited schedule;
• Individual providers need to be linked to an intermediary service organization (ISO) for fiscal accountability.

Quality management plan needs to include the following components:

  • seven CMS focus areas (access, person-centered services, system capacity, safeguards, outcomes/satisfaction, rights/responsibilities, and system performance);
  • mission statement;
  • value statement;
  • ongoing review process and development of revised outcomes; and
  • for ISOs, quality management issues will relate more to the contract/agreement between the ISO and consumer when families/consumers hire their own staff.

Disqualification of a provider would occur when a provider could no longer meet qualifications or there were health and safety issues. The disqualification process would include:

  • notification of disqualification by OMR,
  • face-to-face interview with OMR,
  • timelines for corrective action to become re-qualified,
  • dispute resolution procedures, and
  • provisional licensing (where applicable) until corrections are made.

The work group meets again September 7– 8. PCPA is represented by Policy Specialist Linda Drummond.

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