Prairie State Wire

Illinois State Board of Education, Illinois Purchased Care Review Board met May 12.

Here are the minutes provided by the board:

Chairman Luke Corry called the meeting to order at 2:00 p.m. Roll call was taken, and a quorum was present.

PRESENT

Luke Corry, Chairman, Illinois State Board of Education, Finance Center

Marc Staley, Vice Chairman, Governor’s Office of Management and Budget

Justin Carlin, Department of Children and Family Services Office of Planning and Budget

Chris Dirks, Department of Healthcare and Family Services Bureau of Health Finance

Kristen Patton, Chaddock Attachment and Trauma Services, (non-voting member)

REMOTE

Mr. Staley motioned to approve remote participants. Mr. Carlin seconded the motion. The motion passed in a

unanimous vote, and the remote participants were approved.

Camille Hicks, Department of Public Health Office of Policy, Planning, and Statistics

Rahnee Patrick, Secretary, Department of Human Services Division of Rehabilitation

ABSENT

Vacant, Department of Human Services Division of Developmental Disabilities

STAFF

Andrew Krupin, Beatriz Martinez Escobedo, Christine McClintock, Seth Whitworth, and Patricia Peyton, Illinois

State Board of Education

MINUTES

None.

PUBLIC COMMENT

None.

CLOSED SESSION

None.

PROPOSED REVISIONS TO PART 900 RULES

Chairman Corry thanked the board for coming together on short notice. On Friday afternoon the board received notice of changes from the Joint Committee on Administrative Rules (JCAR) to the amended Part 900 rules. The purpose of today is to generate some discussion on those changes. Chairman Corry inquired of Andrew Krupin, in his review of the changes, was there anything that stood out.

Mr. Krupin went on to detail the changes that were proposed that would warrant further correction, adjustment, or perhaps would not be recommended by ISBE to be included in the revised Part 900 rules. One of the things that the professional staff recommended was defining a rate for a provider or public provider. There are a few parts of the definition proposed as it relates to net costs which would need to be adjusted. For example, the order of operations in the revised proposed rule is that net costs are equal to reasonable costs reported in the provider or public provider’s expenditure report plus an inflation adjustment factor minus non-allowable costs and revenue offsets. Whereas that is incorrect in terms of the actual order of operations, it would be subtracting of the non-allowable costs and revenue offsets before performing the inflation adjustment. He went on to say the definition of the word census in proposed M2, which states that a census is equal to the total number of enrollment days divided by the total number of school days in the previous fiscal year multiplied by the number of school days in the current fiscal year. That should read the number of school days in the current school year. Overall, the actual logic of calculating a rate is a four-page document of the steps to perform the electronic calculation that we perform before bringing rates to the board. It would be a challenge to accurately distill four pages into just a couple of definitions not being set in rule. He would recommend that these definitions not be set to rule because we have not had an issue with these definitions not being set in rule previously. He spoke that there are a few areas where the language is being tightened up in a way that is somewhat inconsistent with how we treat the non-public facilities. The feedback has been that they are a little too permissive. A lot of flexibilities that have been built in are being rolled back. In the proposal, eliminating the possibility that this board may review a rate calculation without a corresponding audit or report. Where it does create a bit of inconsistency, is the suggestion number 13, that lines 214-215, delete “unless prior arrangements are made with the board.” That is consistent as proposed with language that is already existing, which states financial data for providers must be reported using the accrual basis accounting unless prior arrangements are made with the board. The proposed revision would eliminate the end of the sentence and it would read financial data for public providers must be reported consistently with the method of accounting in the last submitted annual financial report or audit, striking unless prior arrangements are made with the board, which exists for non-public providers.

He had one other item to bring to the board’s attention and that is the adjustment number 18, which states in line 450, delete “may” and add “will”. This is in relation to waiving the offset associated with the excess fees captured by a nonpublic facility. The proposed revision would strike the word “may” to be replaced with “will”. Chairman Corry opened the floor to board members on any questions or thoughts they have about the revisions. Mr. Staley inquired about the definition of rate because technically, the board reviews and approves costs, then the costs are then translated into a rate. And that rate would change based on enrollment or a change in calendar days. It could change the per diem rate. The board reviews and approves costs, that then, through a mathematical function, is interpreted as a rate. He suggested that it says, it’s a calculation based on the allowable cost.

Mr. Dirks mentioned that he can remember that the board is here to review costs only, not set the rate. Mr. Staley agrees that a lot of this is technical cleanup and clarification. His specific concerns are with items seven, thirteen and eighteen.

Mr. Carlin had concerns with seven and thirteen the most, he suggested to take out the whole last sentence where it says unless alternative arrangements are made, put in submit to the board for purposes to determine allowable costs for providers to keep.

There was discussion on audit requirements for public providers not submitting information to the Auditor General in a timely manner. If a provider is not submitting their information to the board, one of two things happen, if they miss the median calculations that could impact them. Two, we could implement a dollar a day rate. Mr. Carlin said that it should have identical language.

Chairman Corry added that another piece of this is an annual financial report which is the same as a certified audit. Mr. Carlin inquired that the public providers will be completing cost reports just like the private providers. Mr. Krupin assured that they will be submitting a cost report, that the way it was written was to specifically spell out that we will do a comparison against the annual financial report of the public body, which is a little bit different from the certified audit provided from the non-public providers. That what JCAR is recommending is striking the permissiveness for the board to consider the allowable costs with the absence of an audit or financial report.

Ms. Patton asked if a public school does not submit their annual financial report, are they under the proposed rules with the amendment that is recommended, that the board would have no ability to set a rate for public providers absent the report? Or if it is an ROE, the audit?

Mr. Krupin agreed that the board would have no ability to set the rate but just like non-public, the door would not be shut until the July meeting.

Mr. Staley asked if on M. 7 (i), discussing net costs, should “equal to reasonable cost” be “allowable costs”? To take out “non-allowable costs”? He believes it should read allowable cost.

Ms. Patton mentioned that in the next part, 903.15 talks about the effectiveness of all rate determination. Mr. Staley clarified that the board determines an allowable cost, which then allows a rate to be set because students cannot be placed unless there is an approved rate. The rate translates to what the approved cost is going to be. He believed that there is benefit in clarifying the purpose of this board is to review allowable and approved costs which then later translate to a rate. Ms. Patton inquired about the internal document that ISBE uses, will it be the same for the non-publics. Mr. Krupin said yes, it is ultimately going to be the same in terms of how we calculate the public rates.

Mr. Carlin offered that if we just change net cost to allowable cost then there wouldn’t be a need to provide a definition below it. Chairman Corry read Section 330, only reasonable costs that are necessary for the accomplishment if program goals and objectives shall be allowable. He states that the change makes sense. Mr. Staley confirmed with the board members, in Section M, the second sentence, providers net cost, to be replaced with allowable costs. Mr. Carlin agreed, since they are interchangeable, to take out subset (i.) since it is not needed.

Mr. Staley asked a question regarding if there was anything else in our rules that we discuss how we arrive at allowable costs. Ms. Patton stated that in 900.321, it talks about all the non-allowable costs. Chairman Corry stated that, not so succinctly, but they are there in the rules. Mr. Staley went over that in 900.330, it walks through, first the reasonable costs, then the medians and adjustments and then updated for inflation. We have already discussed the non-allowable, which includes the revenues and the offsets that must happen. Mr. Staley spoke that the board is not objecting to the inclusion of M but would like to see some clarification of M and its parts. Order of preference would be to reject M entirely, if it can’t be rejected then it needs to be cleaned up. Chairman Corry asked if there were any other points for discussion on the revision. Hearing none, moving on to the next item on the agenda.

PROPOSED EXTENSION OF PART 900 RULES HEARING DATES

Chairman Corry stated that it is his understanding that this is a matter of preserving some flexibility for Mr. Krupin to speak on this item. Mr. Krupin the purpose as it relates to bringing these rules in front of the actual joint committee, based upon the timeline to get it passed and if it can’t, then he is looking for authorization from the board to agree to an extension which would kick the rule into the June JCAR meeting. Chairman Corry stated that the aim is to try to finalize this on that timeline should that not be possible. Mr. Staley asked if this goes into June, is this going to affect our timeline? Mr. Krupin stated that if this gets into June, this will affect our timeline and other changes will have to be made to basically execute this for the current school year. The full listing of what needs to be changed and how it would change would be determined. Ms. Patton asked if it would be helpful to run some of the rates to see if there would be any changes to the rules? Mr. Krupin feels that at this point he is comfortable with the system that has been designed and how it proposed to be executed to the Part 900 rules. The formula needs to be the same for the non-publics, which is what has been done. Designed with execution pending the adoption of the rules formally. As far as the rules themselves, we went through the process in first talking about it in the December board meeting, reviewing the rule changes in January and ultimately approving their transmittal in February. Ms. Patton asked where there will be differences and what will they be, to which Mr. Krupin replied, that the extent of the differences is spelled out in the amendments of Part 900 that we are reviewing today. Mr. Carlin said that they are closely aligned with the private schools, realizes that there are different things since this is a public situation. Are there any significant differences between the calculations? Chairman Corry responded that he feels like that question was addressed and the second notice materials and ISBE’s response to those procedures as well. The question here is about the timeline and being able to operate within that timeline. Mr. Carlin mentioned that ultimately the board has the final say. Mr. Krupin is looking for the ability if getting it done tomorrow is not an option, to getting an extension with the joint committee, which we need the authority from the board. Chairman Corry also believes that this addressing a gap in procedure, that the board could have this kind of authority maybe a bit earlier in the process. Mr. Staley made a motion to approve ISBE staff to act on behalf of IPCRB regarding Rule 900 rulemaking if we need to do an extension. Mr. Carlin seconded the motion. The motion passed in a unanimous vote and the authorization for ISBE staff to act on behalf of IPCRB for the purpose of an extension passed.

AUTHORIZATION FOR ISBE STAFF TO ACT ON BEHALF OF IPCRB REGARDING PART 900 RULE MAKING Mr. Staley made a motion to authorize ISBE staff to act on behalf of IPCRB regarding Part 900 rule making. Mr. Carlin added if there are no substantial changes. Mr. Staley agreed, as long as it is dealing with technical and not substantive changes. Mr. Carlin seconded the motion. The motion passed in a unanimous vote and the authorization for ISBE staff to act on behalf of IPCRB Part 900 rule making passed.

OLD BUSINESS

None.

NEW BUSINESS

None.

ADJOURNMENT

Chairman Corry asked if there was any additional business for the board’s consideration. Hearing none, he asked for a motion to adjourn. Mr. Carlin made a motion to adjourn the meeting; Mr. Dirks seconded the motion. The motion passed in a unanimous vote. The meeting adjourned at 3:01 p.m.

https://www.isbe.net/Documents_IPCRB/051225-Special-Minutes.pdf