NYSED has released the rate setting methodology for both preschool and school-age programs. In separate memos, the following is explained:
Preschool (Centerbased and SEIT): There appears to be no change in the methodology with a zero growth factor. The rates will continue for this year to be reconciled.
School-age: There are several important revisions to the methodology for School-age providers to include a 3.8% trend factor adjustment for 2014/15 on total costs.
The following are excerpts from the NYSED Methodology Page.
The 2014-15 tuition rate setting methodology provides a 3.8 percent trend factor for the 2014-15 school year and includes a number of modifications to enhance funding stability for school-age providers serving students with disabilities. These reforms are based on recommendations of the Special Education Financial Advisory workgroup and were approved by both the Board of Regents and the Division of the Budget for the 2014-15 school year. The changes are intended to assist school-age providers by mitigating the impact of significant enrollment changes on per diem rates/tuition revenue and by streamlining the process of issuing final rate reconciliations, in cases where the fiscal impact is minimal. Specifically, the following three reforms are applied to the 2014-15 tuition methodology for school-age program providers:
1.To reduce the impact of enrollment declines, an enrollment adjustment factor will be applied as part of the rate reconciliation process in order to stabilize tuition revenue on a time-limited basis. When an unexpected, substantial enrollment decline occurs, it may be difficult for providers to immediately adjust staffing patterns and spending commensurate with the loss in enrollment. This enrollment adjustment factor will give such providers more time to make necessary changes to either increase enrollment or restructure programs.
2.Short-term growth in enrollment can result in a lower tuition rate – one that future rates are based upon even when enrollment returns to prior levels. To reduce the impact of a short-term increase or spike in enrollment on future tuition rates for providers, the rate methodology has been revised to utilize the higher of two rates from different points in time (adjusted for approved trend factors) as the basis of the total cost screen calculation when such circumstance occurs. This measure will serve to stabilize tuition revenue from year-to- year.
3.To streamline the current rate reconciliation process, the methodology has been modified to eliminate final rate reconciliations where providers would experience less than a one percent change in the per-student reimbursement rate. This reform intends to eliminate the administrative work for approved providers associated with rate reconciliation in cases where the fiscal impact is minimal.
The intent of the first reform is to mitigate the impact of the total cost screen following a significant enrollment decrease. Specifically, the 2014-15 reconciliation rate calculation will employ the lesser of the three year average enrollment-to-capacity percent or 90 percent of the reported enrollment capacity in the calculation of the adjusted per diem used in the total cost screen calculation if a program’s 2014-15 enrollment-to-capacity percent decreases by 10 percentage points or more from its prior three year average enrollment-to-capacity percent. Please refer to the glossary of this memorandum for a definition of enrollment-to-capacity percent and its components. If the enrollment-to-capacity percent does not decrease by 10 percentage points or more from its prior three year average, the adjusted per diem in the total cost screen calculation will be based on actual care days in the same manner as the 2013-14 rate setting methodology. For 2014-15 prospective rates, the adjusted per diem used in the total cost screen will be calculated using 2012-13 actual adjusted care days for all providers whose 2014-15 prospective rates are based on 2012-13 actual data. It is important to note that the reform described in this paragraph will be applied to rate-setting for approved private schools educating students with disabilities (otherwise known as 853 schools) and Special Act School Districts. This change to the methodology will not be applicable to tuition rates for Extended School Year (July/August) Special Education Programs operated by public school districts or BOCES (also known as “summer only programs”).
The second reform intends to address the impact on tuition rates of an enrollment increase causing a prior year’s tuition rate decline by expanding the prior period per diem used in the calculation of the total cost screen to two options. This reform will be introduced beginning with the 2014-15 reconciliation rate calculation where, in most cases, the prior period per diem used in the total cost screen calculation will be the greater of the 2014-15 prospective per diem rate or the 2013-14 reconciliation per diem rate plus the approved trend factor. Beginning in 2015-16, this approach will also be applied to the prospective rates where, for the 2015-16 prospective rate, the prior period per diem used in the total cost screen calculation will be the greater of the 2014-15 prospective per diem rate plus any applicable trend factor approved for 2015-16, or the 2013-14 reconciliation per diem rate plus the 2014-15 approved trend factor and any applicable trend factor approved for 2015-16.
It is important to note that this option is intended to address ongoing operational expenses, and is not available in circumstances where the higher per diem rate is a prospective per diem rate (for the 2014-15 reconciliation rate this would be the 2014-15 prospective per diem rate) that includes expenses for capital, interest or depreciation added via a waiver to the approved tuition methodology for the current or prior year’s tuition rate, or in cases where the rate has not been appropriately adjusted to reflect an audit that has been issued. The Department also reserves the right to not apply this change to the methodology where the prospective rate includes one-time costs, is based on a budget, or if its application would result in an inappropriate benefit. Furthermore, this option will be applied to rate-setting for 853 schools and Special Act School Districts and would not apply to summer only programs.
Also, this second reform measure will be calculated without factoring a change in rate that may occur as a result of the first reform measure. For example, the 2014-15 reconciliation per diem to be used in the calculation of the 2015-16 reconciliation and 2016-17 prospective tuition rates will be exclusive of the amount added back to the 2014-15 reconciliation rate due to the first reform (an enrollment-to-capacity percent decline of 10 percentage points or greater) as described above. Please also note that the two reform measures described above will not result in reimbursement to providers above total allowable costs.
The third reform intends to eliminate rate reconciliation in cases where the fiscal impact is minimal. Specifically, reconciliation tuition rates/tuition adjustment factors will not be issued if the reconciliation per diem rate differs from the prospective per diem rate by less than 1 percent. If the 2014-15 reconciliation per diem differs from the 2014-15 prospective per diem rate by less than 1% then the 2014-15 prospective rate will become the final rate subject to audit; this final rate subject to audit will be the basis for the 2016-17 prospective rate. This change will no longer require providers to resubmit bills for reconciliation rate changes that would result in small adjustments to reimbursements based on final actual data.