Overview of the Claims Processing Unit
The VR reimbursement program came into being on October 1, 1981. The program is designed to reimburse State VR agencies for money that they spent rehabilitating Social Security disability beneficiaries and/or recipients.
There are 3 types of expenses that we can reimburse for. These are:
Direct costs—costs that are purchased by the State VR agency from outside sources.
Administrative, counseling, and placement (ACP) costs—these are indirect services such as overhead and services provided by State VR employees. These costs are a monthly amount that is approved by Social Security.
Tracking costs—these costs are payable up to 9 months after VR closes the case, as long as these costs are within the payment period. These costs are also a monthly amount that is approved by Social Security.
A State VR agency may receive reimbursement for services as long as:
Their client is a social security disability beneficiary and/or recipient during the time that the VR was provided; and
They must complete a continuous period of substantial gainful activity (SGA) for a period of 9 months in a 12 month period; and
Their claim is filed timely.
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SSA-199 Claim Form
The VRA must submit an SSA-199 claim form (copy attached) or an approved facsimile to claim reimbursement. The claim form must be completely filled out, and a breakdown of direct costs services is also required, along with a type of service code. The DOT (Dictionary of Occupational Titles) code is also required.
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Counting ACP Months and Determining Proper Cost Formula to Use
1. ACP months are counted from the date of VR entry to the date of VR closure inclusive. For example, if a client entered VR in 2/00 and closed 12/00, ACP months claimed should be 11, not 10. 2/00 is counted as month #1.
2. You should use the cost formula that coincides with the month of VR closure, not the month/year that you are filing the claim. For example, if your claim closed in 12/00, you would use FY 01 cost formulas no matter when you filed the claim. Cost formulas are based on the federal fiscal year, which runs from 10/1 to 9/30.
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Postemployment Costs
Postemployment services are purchased services (direct costs) that are incurred after VR closure, not the date employment began.
Postemployment services must always be claimed on line 14 (Other) on the SSA-199. They must also be broken down and listed on the direct costs breakdown on the back of the SSA-199.
If postemployment services are not requested on line 14 of the SSA-199, you will not be paid for them.
All postemployment costs must be within the established payment period to be reimbursed.
Postemployment can ONLY be claimed for months when direct costs services are purchased. SSA will then pay a month of ACP for every month where there were purchased services, and take away a month of tracking for every month of ACP that is paid.
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Determining a Continuous Period of SGA (CP)
The continuous period of SGA may be for 9 continuous months, 9 out of 10 months, 9 out of 11 months, or 9 out of 12 months. A 1 month break in SGA (9 out of 10) is not investigated. If the CP of SGA is 9 out of 11 or 9 out of 12 months, the break in SGA must not be due to the person’s disabling impairment. For purposes of VR reimbursement, title II trial work period months are counted as long as the wages are at the SGA level. Also for VR reimbursement purposes, an SGA decision must be made in title XVI cases. Unlike the milestone provision of ticket to work, IRWE’s and subsidies are deducted out of wages before an SGA decision is made.
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Wage Documentation
There are various methods that we use to certify that 9 months of SGA in a 12-month period has been met:
o Wages Submitted by the State VR agency—these are quarterly wages, usually from the State’s Unemployment Compensation Records. This method is very important because it will speed up the time that it takes to process a reimbursement claim.
o In title XVI cases, the SSR—we use wages found in the ENIH field of the SSR as long as these wages are verified. We can also pick up IRWE’s and blind exclusions from the SSR.
o The DEQY and OCSE (Office of Child Support Enforcement) records—The DEQY shows yearly wages and the OCSE shows quarterly wages. In claims where the VRA does not send in any proof of earnings and the DEQY (IRS records) are our only means of establishing SGA, a wage holding file is established. These claims are kept in the file until the IRS records are updated. This is usually by August of the year following the work start date shown on the SSA-199 claim form. This method can take up to 18 months for us to certify SGA.
o Development by a SSA field office—this method is used when the technician is unable to certify a continuous period of SGA from the above sources. An SSA-289 (exhibit 2) is sent to the field requesting that they develop SGA for us. This can also be a very time-consuming method.
If a continuous period of SGA is not found, the claim for reimbursement is denied based on noncompletion of SGA.
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Tolerance Procedure
In order to expedite the processing of claims, the Claims Unit follows a tolerance procedure. $200 per month is added to the monthly SGA amount for nonblind beneficiaries and $100 per month is added to the monthly SGA for blind beneficiaries. This additional amount takes into consideration any impairment related work expenses or subsidies that the beneficiary may have. If a State VR agency submits evidence of wages that reach this tolerance level, the claim will not be sent out for an SGA determination. Instead, it will be worked by a technician in the Claims Unit. Following this tolerance procedure is the most expeditious way to have a claim processed. That does not mean that you should not submit claims that meet SGA but do not meet tolerance.
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Timely Filing of a Reimbursement Claim
For claims based on the beneficiary’s completion of a continuous period of SGA, a VR agency has 12 months after the 9th month of SGA to file the claim with SSA.
The filing deadline may be waived if “good cause” for late filing is established (for example, loss of records due to storm damage or other unforeseen or uncontrollable circumstances. If the filing deadline is not met and cannot be waived for “good cause”, SSA will deny the claim.
For claims based on VR medical cessation (section 301 claims), the timeframe for filing depends on whether SSA sent the provider a written notice requesting that it file a claim. In most cases, SSA will identify section 301 cases that meet the requirements for payment will send a notice to the provider to file a claim. In this case, the provider must file a claim within 90 days of the date of the written notice requesting that a claim be filed. However, if a VR provider identifies a potential 301 claim through its own monitoring of its SSA beneficiary caseload and has not received a written notice from SSA, the provider must file a section 301 claim within 12 months after the month in which VR services ended. 301 claims will be discussed more fully this afternoon.
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Withdrawing a Claim for Reimbursement
If a State identifies a claim that they think will not result in a payment, they are encouraged to withdraw that claim. Withdrawing a claim does not have a negative effect on your allowance rate. Withdrawing claims that would have resulted in denials increases your overall allowance rate.
To withdraw a claim:
Contact Lorry Nines at (410)965-9182 for a pending claims list if necessary. The pending claims list will be sent by surface mail or fax, whichever method is preferable.
To withdraw a claim, send a written request by surface mail or fax (410)966-3280 to Lorry Nines. Telephone requests will not be accepted.
Your claim(s) will be withdrawn from the VR reimbursement system using payment code 760. An individual notice will be included with the end of month material on each withdrawal that was processed.
No withdrawn claims or any other material will be returned.
If a final decision is reached before a request for withdrawal is received, that decision will remain. Please do not request us to look at a claim to decide for you if it should be withdrawn.
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Determining the Payment Period of a VR Reimbursement Claim (see attachment)
The payment period for a VR claim begins with either the date the client entered VR or the date that entitlement or eligibility began, whichever is later.
The payment period for a VR claim ends with either the completion of the continuous period of SGA or the end of entitlement or eligibility, whichever is earlier.
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Paying the VR Reimbursement Claims
When it is determined that this person is a disability beneficiary/recipient and has completed a continuous period of SGA, the claim may be paid as follows:
· All direct costs that are within the payment period and on or before VR closure;
· ACP costs that are provided from the VR Enter date through the VR closure date inclusive, as long as they are within the established payment period.
Tracking costs that are provided for up to 9 months after the VR closure date, as long as they are within the established payment period.
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Savings to the Trust Fund
A savings to the trust fund calculation is done on all claims by the VRRMS system. This is a formula provided to us by the Office of the Actuary. We cannot reimburse for amounts higher than what the savings to the trust fund would be.
Savings to the Trust Fund
SSA’s policy of the total reimbursement payable to a State vocational rehabilitation (VR) agency under the cost reimbursement system is limited to the estimated savings to the trust funds and general revenues which will result from the rehabilitated beneficiary leaving the beneficiary rolls. SSA’s VR regulation results in a “cap” of the amount which may be reimbursed in any individual claim. The “cap” is set by a formula developed by the Office of the Actuary. This formula, known as the trust fund savings formula, insures that reimbursement for any claim cannot be more than the estimated savings to the trust funds or general revenues which result from the rehabilitated beneficiary going off the benefit rolls.
The savings formula is based upon the use of three factors which determine the savings to the trust fund or the general revenue fund. Each of the factors was developed by the Office of the Actuary and is based upon an individual’s age and sex. Included in the calculated expected present values are future cash benefits to the worker during disability, increased case benefits to the worker after age 65 and administrative expenses.
The ratio of projected savings to expenditures for FY 03 is $5.00 savings for every $1.00 spent. The ratio of projected savings to expenditures for the first half of FY 04 is $6.00 savings for every $1.00 spent.
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Priority Claims Processing
Early in FY 97, OESP, CSAVR and RSA entered into a joint agreement to find new ways for improving the claims payment process. A work group consisting of representatives from each agency proposed a Priority Processing Demonstration Project, which the Claims Unit began implementing in January 1998.
Under this demonstration project, State VRA’s that had a claims allowance rate of 80% or greater at the end of FY 97 were given priority claim processing consideration. This priority processing serves as a reward for State agencies that historically provide well documented allowable claims and serves as an inducement to other States to improve performance. Priority processing considerations means that the Claims Unit assures that all pending claims from these agencies are processed first and that all newly received claims are processed on an ongoing basis. Pending claims from remaining State VRA’s are processed in a descending order of allowance rate and newly receipted claims from these agencies are held until the full cycle of backlog claims are completed. To increase their allowance rates, non-priority State agencies are encouraged to review the claims they have pending and either withdraw claims that do not meet the payment requirements or provide supplemental proofs to support an allowance decision. The claims allowance rate for each VRA is calculated at the end of each cycle of the processing. New ranking is established based on the cumulative allowance rate attained during the prior cycle. Each VRA can either achieve priority status or fall to the descending order of processing depending on their cumulative allowance rate for the cycle. We’ve had great success with this method of processing claims, and have seen many VRA’s “cross over” from the descending order to priority status.
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Prepayment Validation Reviews
To insure accuracy and the integrity of the program, Congress has granted us the authority to conduct prepayment validation reviews (PVR’s). The claims for payment are chosen randomly by VRRMS based on a formula of how many payments were processed by a particular VRA for the previous year. The amount of PVR’s conducted for a particular VRA can be modified based on any inconsistencies or irregularities that we may find. For example, if inadequate documentation appears frequently while reviewing claims submitted by a provider, an additional volume of claims may be added to the originally planned sample size and reviewed on a pre or postpayment basis. On the other hand, if a provider consistently provides adequate documentation that verifies reimbursement amounts requested, fewer claims may be selected for review than was originally planned for that provider.
When a claim is chosen for a PVR, the State is notified via letter that their claim has been approved for payment, but before the payment can be processed a validation review must be conducted.
For each claim selected, SSA will request proofs to support the request for costs being claimed. The required proofs are:
A copy of the IWRP/IEP/IPE, as appropriate, that list service(s) to be purchased;
Copies of pertinent progress notes; and
A copy of the intake and closure statement, as appropriate.
Proof of payment can include the types of documentation listed below:
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copies of all direct cost invoices that show date of service, type of service rendered, cost of service, proof of payment, name and address of payee, etc. Authorizations will not be accepted.
copies of bills, invoices and receipts under the vendor’s letterhead.
copies of signed and dated certification that the services were provided.
computerized electronic bills may be acceptable only on a cost-by-cost basis and only if the information contained is sufficient to verify the expenditure and create an audit (such as a warrant number or check number).
When submitting documentation for validation review, the provider must submit documentation in the exact order and sequence as found on form SSA-199, in items 17a, 17b, and 17c. Each document must be numbered in the upper right hand corner to correspond with the SSA-199. For example, all documentation pertaining to item 17a in item #1 should be marked “17a #1” on each document validating that item and so forth. Each page of validation review documentation must also show the client’s social security number in the upper right hand corner. The PVR cover sheet must be placed on top of the material. It is extremely important to include this cover sheet because it enables the control clerks to differentiate between a PVR and an initial claim. The material should be mailed, not faxed. If we require additional evidence from you, you can fax it at our request.
Once the validation review is complete, the payment will be released immediately.
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VR Medical Cessation Claims (Section 301) Claims
There is a situation in which VR providers can file a claim for reimbursement for the costs of their services which do not require that the disability beneficiary complete a continuous period of 9 months of SGA.
To be reimbursable, the services must have been provided during the payment period that we discussed earlier. The start of the payment period for these claims is determined in the same manner as for other claims. However, the end of the payment period is determined differently.
A VR medical cessation claim is a claim for payment for services provided to individuals who continue to receive disability benefits because they are actively participating in an approved VR program after their disability has ceased and the VR program is likely to lead to a permanent removal from the benefit rolls.
It is important to remember the following about 301 claims:
Completion of a 9 month period of SGA is not required for reimbursement;
A provider cannot be paid for a section 301 claim and a continuous period of SGA claim for the same individual for the same period of VR;
A provider cannot be paid unless the individual’s benefit payments have been terminated.
The payment period for 301 claims ends the month before benefit entitlement or eligibility terminates.
Benefit entitlement or eligibility terminates with whichever one of the following events is earliest:
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- The beneficiary completes the VR program;
- The beneficiary stops participating in the VR program; or
- SSA determines that the individual’s continued participation in the VR program will not increase the likelihood of the individual’s permanent removal from the benefit rolls.
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VR Coordinator Training
We offer a training program in POT for any State VRA that is interested. We plan an itinerary based on that particular State’s needs. We cover everything from processing of claims to cost
formulas, 301, and ticket activity. The training usually runs for 1 full day, but we’ve had instances where the training ran for 2 days. The State is responsible for paying all travel expenses.
