49.34(3)

(3)

49.34

49.34 Purchase of care and services.

49.34(3)(c)

(c) For proprietary agencies, contracts may include a percentage add-on for profit according to rules promulgated by the department.

49.34(1)

(1) All services under this subchapter and ch. 48 purchased by the department or by a county department under § 46.215, 46.22, or 46.23 shall be authorized and contracted for under the standards established under this section. The department may require the county departments to submit the contracts to the department for review and approval. For purchases of $10,000 or less the requirement for a written contract may be waived by the department. No contract is required for care provided by foster homes that are required to be licensed under § 48.62. When the department directly contracts for services, it shall follow the procedures in this section in addition to meeting purchasing requirements established in § 16.75.

49.34(2)

(2) All services purchased under this subchapter and ch. 48 shall meet standards established by the department and other requirements specified by the purchaser in the contract. Based on these standards the department shall establish standards for cost accounting and management information systems that shall monitor the utilization of the services, and document the specific services in meeting the service plan for the client and the objective of the service.

49.34(3)(a)

(a) Purchase of service contracts shall be written in accordance with rules promulgated and procedures established by the department. Contracts for client services shall show the total dollar amount to be purchased and for each service the number of clients to be served, number of client service units, the unit rate per client service and the total dollar amount for each service.

49.34(3)(b)

(b) Payments under a contract may be made on the basis of actual allowable costs or on the basis of a unit rate per client service multiplied by the actual client units furnished each month. The contract may be renegotiated when units vary from the contracted number. The purchaser shall determine actual marginal costs for each service unit less than or in addition to the contracted number.

49.34(3)(d)

(d) Reimbursement to an agency may be based on total costs agreed to by the parties regardless of the actual number of service units to be furnished, when the agency is entering into a contract for a new or expanded service that the purchaser recognizes will require a start-up period not to exceed 180 days. This reimbursement applies only if identified client needs necessitate the establishment of a new service or expansion of an existing service.

49.34(3)(e)

(e) If the purchaser finds it necessary to terminate a contract prior to the contract expiration date for reasons other than nonperformance by the provider, the actual cost incurred by the provider may be reimbursed in an amount determined by mutual agreement of the parties.

49.34(3)(f)

(f) Advance payments of up to one-twelfth of an annual contract may be allowed under the contract. If the advance payment exceeds $10,000, the provider shall supply a surety bond in an amount equal to the amount of the advance payment applied for. No surety bond is required if the provider is a state agency. The cost of the surety bond shall be allowable as an expense.

49.34(4)

(4) For purposes of this section and as a condition of reimbursement, each provider under contract shall:

49.34(4)(a)

(a) Except as provided in this subsection, maintain a uniform double entry accounting system and a management information system which are compatible with cost accounting and control systems prescribed by the department. The department shall establish a simplified double-entry bookkeeping system for use by family-operated group homes. Each purchaser shall determine whether a family-operated group home from which it purchases services shall use the double-entry accounting system or the simplified system and shall include this determination in the purchase of service contract. In this paragraph, “family-operated group home” means a group home licensed under § 48.66 (1)(a) for which the licensee is one or more individuals who operate not more than one group home.

49.34(4)(b)

(b) Cooperate with the department and purchaser in establishing costs for reimbursement purposes.

49.34(4)(c)

(c) Unless waived by the department, biennially, or annually if required under federal law, provide the purchaser with a certified financial and compliance audit report if the care and services purchased exceed $25,000. The audit shall follow standards that the department prescribes. A purchaser may waive the requirements of this paragraph for any family-operated group home, as defined in para. (a), from which it purchases services.

49.34(4)(d)

(d) Transfer a client from one category of care or service to another only with the approval of the purchaser.

49.34(4)(e)

(e) Charge a uniform schedule of fees as specified under § 49.32 (1) unless waived by the purchaser with the approval of the department. Whenever providers recover funds attributed to the client, such funds shall offset the amount paid under the contract.

49.34(5)

(5) Except as provided in sub. (5m), the purchaser shall recover from provider agencies money paid in excess of the conditions of the contract from subsequent payments made to the provider.

49.34(5m)

(5m)

49.34(5m)(a)

(a) In this subsection:

49.34(5m)(a)2.

2. “Rate-based service” means a service or a group of services, as determined by the department, that is reimbursed through a prospectively set rate and that is distinguishable from other services or groups of services by the purpose for which funds are provided for that service or group of services and by the source of funding for that service or group of services.

49.34(5m)(b)

(b)

49.34(6)

(6) Contracts may be renegotiated by the purchaser under conditions specified in the contract.

49.34(5m)(a)1.

1. “Provider” means a nonstock corporation organized under ch. 181 that is a nonprofit corporation, as defined in § 181.0103 (17), and that contracts under this section to provide client services on the basis of a unit rate per client service or a county department under § 46.215, 46.22, 46.23, 51.42, or 51.437 that contracts under this section to provide client services on the basis of a unit rate per client service.

49.34(5m)(b)1.

1. Subject to subds. 2. and 3. and par. (em), if revenue under a contract for the provision of a rate-based service exceeds allowable costs incurred in the contract period, the provider may retain from the surplus generated by that rate-based service up to 5% of the contract amount. A provider that retains a surplus under this subdivision shall use that retained surplus to cover a deficit between revenue and allowable costs incurred in any preceding or future contract period for the same rate-based service that generated the surplus or to address the programmatic needs of clients served by the same rate-based service that generated the surplus. This subdivision does not apply to a child welfare agency that is authorized under § 48.61 (7) to license foster homes, a group home, as defined in § 48.02 (7), or a residential care center for children and youth, as defined in § 48.02 (15d).

49.34(5m)(b)3.

3. If on December 31, 1995, the amount accumulated by a provider from all contract periods ending on or before that date for all rate-based services provided by the provider exceeds 10% of the provider’s total contract amount for all rate-based services provided by the provider in 1995, the provider shall, at the request of a purchaser, return to that purchaser the purchaser’s proportional share of that excess.

49.34(5m)(f)

(f) All providers that are subject to this subsection shall comply with any financial reporting and auditing requirements that the department may prescribe. Those requirements shall include a requirement that a provider provide to any purchaser and the department any information that the department needs to claim federal reimbursement for the cost of any services purchased from the provider and a requirement that a provider provide audit reports to any purchaser and the department according to standards specified in the provider’s contract and any other standards that the department may prescribe.

49.34(5m)(b)2.

2. Subject to subd. 3. and par. (em), a provider may accumulate funds from more than one contract period under this paragraph, except that, if at the end of a contract period the amount accumulated from all contract periods for a rate-based service exceeds 10% of the amount of all current contracts for that rate-based service, the provider shall, at the request of a purchaser, return to that purchaser the purchaser’s proportional share of that excess and use any of that excess that is not returned to a purchaser to reduce the provider’s unit rate per client for that rate-based service in the next contract period. If a provider has held for 4 consecutive contract periods an accumulated reserve for a rate-based service that is equal to or exceeds 10% of the amount of all current contracts for that rate-based service, the provider shall apply 50% of that accumulated amount to reducing its unit rate per client for that rate-based service in the next contract period. The department may grant an exception to this subdivision upon request of a provider that is a child welfare agency that is authorized under § 48.61 (7) to license foster homes, a group home, as defined in § 48.02 (7), or a residential care center for children and youth, as defined in § 48.02 (15d).

49.34(5m)(em)

(em) Notwithstanding par. (b) 1. and 2., a county department under § 46.215, 51.42, or 51.437 providing client services in a county having a population of 500,000 or more or a nonstock, nonprofit corporation providing client services in such a county may not retain a surplus generated by a rate-based service or accumulate funds from more than one contract period for a rate-based service from revenues that are used to meet the maintenance-of-effort requirement under the federal temporary assistance for needy families program under 42 USC 601 to 619.

49.34(7)

(7) The service provider under this section may appeal decisions of the purchaser in accordance with terms and conditions of the contract and ch. 68 or 227.