Section 465IAC2-17-21. Allowable costs in the administrative payment; cost report required

   (a) The department will make payments to each CPA for reasonable costs related to administration of the CPA, based on the administrative payment approved by the department for that CPA.

  (b) Any payments made to a CPA will be made pursuant to a written agreement that is in a form specified by the department and executed by the parties.

  (c) The department will maintain and publish a list of all CPA administrative payments.

  (d) Each CPA shall submit to the department a cost report on an annual basis at the time and in the form required by the department. Failure to submit the cost report timely may result in delay in payment or nonpayment by the department for administrative costs incurred or services rendered by the CPA.

  (e) The department will review each cost report for reasonableness and eligibility under Title IV-E, OMB circulars, and the applicable CFR provisions described in section 16 of this rule. The department may, in its discretion, adjust historical costs to reflect current costs by applying a cost of living adjustment. For costs that are not eligible under Title IV-E, the department will review the cost report for allowability as determined by the department. Based on that review, the department will submit to the CPA a final approved cost report that the department will use in calculating the applicable rates.

  (f) To be allowable, a cost must relate to one (1) or more of the categories described in section 3 of this rule. The cost must also generally satisfy the following criteria:

(1) The cost is reasonable, necessary, and related to the care of children.

(2) The cost is related to goods or services actually provided by the CPA.

  (g) The department will mail to the CPA a letter (notice letter) stating the administrative payment or payments that the department agrees to pay, for each applicable program for children whom the department has placed or may place with the CPA. The notice letter will include the effective date of the new approved administrative payment or payments as approved by the department. The effective date will be not less than forty-five (45) days after the date of the letter.

  (h) If the CPA accepts the administrative payment offered by the department in the notice letter, such administrative payment shall amend any agreement containing payment rates that include administrative costs for placements currently in effect between the CPA and the department.

  (i) Each cost report submitted under subsection (d) is subject to further review or audit by the department. Such a review or audit may result in an administrative payment adjustment as specified in a new administrative payment notice letter issued and mailed to the CPA.

  (j) If the CPA has not been licensed, or operated a program for which an administrative payment is required, for a period of at least twelve (12) months before the cost report is due to the department, the CPA shall submit a cost report utilizing a comprehensive twelve (12) month operating budget for the new program at least ninety (90) days before the start of the program. The department will utilize its rate setting methodology as provided herein to establish an administrative payment for the new program. The cost report shall be in the form specified or approved by the department. (Department of Child Services; 465 IAC 2-17-21; filed May 25, 2011, 1:33 p.m.: 20110622-IR-465100417FRA)