Cost Settlement & Random Moment in Time Study


Cost settlement methodology generates reimbursement for services based on both claim payments for services rendered (interim payments), and a settlement of the costs associated with the provision of services.

One such method is a statistically valid process called the Random Moment in Time Study (RMTS), which can provide a sampling of time spent delivering eligible services provided in schools. The Centers for Medicare & Medicaid Services (CMS) has increasingly been interested in the use of RMTS for school-based Medicaid programs, and many states are adopting this model.

RMTS consists of a statewide sample of providers delivering direct and administrative services to determine the percentage of time spent delivering services or conducting outreach and administrative activities associated with the school-based Medicaid program.

Providers are asked to report how they spent their time at a specific moment in a day (e.g., Tuesday, March 1, at 12 p.m.). They do that by answering a series of questions related to the nature of the activity performed at the designated moment. These questions are used to determine whether the activity was Medicaid-eligible. Providers are grouped into “pools,” in which like providers are sampled together to ensure the most accurate representation of their time is reflected in the statewide sample.

Samples are drawn quarterly and are designed to reflect the entire universe of moments in time when providers in schools may be present and engaged in a Medicaid-eligible activity. All time is accounted for, including non-Medicaid allowable time, using CMS-approved codes that are designed to create buckets to describe how time is spent.

At the end of the year, the state uses the data associated with time spent, the costs provided by school districts, or local education agencies (LEAs), and a record of the interim payments already received by the LEA to calculate a final settlement amount. An additional cost settlement to correct an over- or under-payment may be necessary between the LEA and the state.

The RMTS brings some unique challenges that states and LEAs must address:

  • Participation is crucial to the accuracy of the RMTS results. CMS requires a minimum of 85 percent of all moments sampled to be considered valid (i.e., completed by the appropriate staff, etc.). Failure to complete sampled moments could affect the time study results and reduce the amount of reimbursement available to those participating in the program.
  • When considering a state plan amendment (SPA) that may result in CMS requesting modifications to the RMTS methodology, one of the key questions that comes up is how much notice the state will give the LEA about when their “moment” is. LEAs prefer as much lead-time as possible in order to prepare providers and staff for the increased paperwork.
  • Similarly, the state will define the amount of time providers have to complete and submit their paperwork documenting what they were doing at the “moment.” Given that school-based providers spend a vast amount of their time with students, rather than in front of a computer, and that schools are closed on weekends and holidays, LEAs would like as many school days as possible in order to maximize provider participation.

Opportunities exist to streamline and implement policies that support the success of LEAs and school-based claiming. For example, designing state policy around RMTS notice and response time is a critical element. Providing training and support to LEAs and to providers is also critical. States can play a role by funding training and resources for LEAs, provider trade groups and others. Clear state guidance and claiming manuals are also important.