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What vendors want: Other factors that influence vendors when considering responding to a request for services

By: Julie Allen, Marnie Hudson,

Mary Corley has worked with Medicaid fiscal agent services for almost 30 years as a claims supervisor, documentation specialist, business analyst, and contract compliance analyst. She has more than 25 years of experience in all aspects of the RFP process including go/no-go analysis, content development, including managing all written content  from multiple team members and compiling into one document, proofreading, formatting, and production/delivery.

Mary Corley,

Misha Mosher is an experienced legal professional with proven project management, research, and analysis skills. She brings knowledge of the legal industry, trade publications, government regulations, procurement, intellectual property, technology licensing, privacy and security, and risk management.

Misha Mosher
10.21.20

Read this if your agency is planning to procure a services vendor.

In our previous article, we looked at three primary areas we, or a potential vendor, consider when responding to a request for services. In this follow-up, we look at additional factors that influence the decision-making process on whether a potential vendor decides to respond to a request for services.

  • Relationship with this state/entity―Is this a state or client that we have worked with before? Do we understand their business and their needs?

    A continuing relationship allows us to understand the client’s culture and enables us to perform effectively and efficiently. By establishing a good relationship, we can assure the client that we can perform the services as outlined and at a fair cost.
  • Terms and conditions, performance bonds, or service level agreements―Are any of these items unacceptable? If there are concerns, can we request exceptions or negotiate with the state?

    When we review a request for services our legal and executive teams assess the risk of agreeing to the state’s terms and compare them against our existing contract language. States might consider requesting vendors provide exceptions to terms and conditions in their bid response to open the door for negotiations. Not allowing exceptions can result in vendors assuming that all terms are non-negotiable and may limit the amount of vendor bid responses received or increase the cost of the proposal.

    The inclusion of well-defined service level agreements (SLAs) in requests for proposals (RFPs) can be an effective way to manage resulting contracts. However, SLAs with undefined or punitive performance standards, compliance calculations, and remedies can also cause a vendor to consider whether to submit a bid response.

    RFPs for states that require performance bonds may result in significantly fewer proposals submitted, as the cost of a performance bond may make the total cost of the project too high to be successfully completed. If not required by law that vendors obtain performance bonds, states may want to explore other effective contractual protections that are more impactful than performance bonds, such as SLAs, warranties, and acceptance criteria.
  • Mandatory requirements―Are we able to meet the mandatory requirements? Does the cost of meeting these requirements keep us in a competitive range?

    Understanding the dichotomy between mandatory requirements and terms and conditions can be challenging, because in essence, mandatory requirements are non-negotiable terms and conditions. A state may consider organizing mandatory requirements into categories (e.g., system requirements, project requirements, state and federal regulations). This can help potential vendors determine whether all of the mandatory requirements are truly non-negotiable. Typically, vendors are prepared to meet all regulatory requirements, but not necessarily all project requirements.
  • Onsite/offsite requirements―Can we meet the onsite/offsite requirements? Do we already have nearby resources available? Are any location requirements negotiable?

    Onsite/offsite requirements have a direct impact on the project cost. Factors include accessibility of the onsite location, frequency of required onsite participation, and what positions/roles are required to be onsite or local. These requirements can make the resource pool much smaller when RFPs require staff to be located in the state office or require full-time onsite presence. And as a result, we may decide not to respond to the RFP.

    If the state specifies an onsite presence for general positions (e.g., project managers and business analysts), but is more flexible on onsite requirements for technical niche roles, the state may receive more responses to their request for services and/or more qualified consultants.
  • Due date of the proposal―Do we have the available proposal staff and subject matter experts to complete a quality proposal in the time given?

    We consider several factors when looking at the due date, including scope, the amount of work necessary to complete a quality response, and the proposal’s due date. A proposal with a very short due date that requires significant work presents a challenge and may result in less quality responses received.
  • Vendor available staffing―Do we have qualified staff available for this project? Do we need to work with subcontractors to get a complete team?

    We evaluate when the work is scheduled to begin to ensure we have the ability to provide qualified staff and obtain agreements with subcontractors. Overly strict qualifications that narrow the pool of qualified staff can affect whether we are able to respond. A state might consider whether key staff really needs a specific certification or skill or, instead, the proven ability to do the required work.

    For example, technical staff may not have worked on this particular type of project, but on a similar one with easily transferable skills. We have several long-term relationships with our subcontractors and find they can be an integral part of the services we propose. If carefully managed and vetted, we feel subcontractors can be an added value for the states.
  • Required certifications (e.g., Project Management Professional® (PMP®), Cybersecurity and Infrastructure Security Agency (CISA) certification)―Does our staff have the required certifications that are needed to complete this project?

    Many projects requests require specific certifications. On a small project, maybe other certifications can help ensure that we have the skills required for a successful project. Smaller vendors, particularly, might not have PMP®-certified staff and so may be prohibited from proposing on a project that they could perform with high quality.
  • Project timeline―Is the timeline to complete the project reasonable and is our staff available during the timeframe needed for each position for the length of the project?

    A realistic and reasonable timeline is critical for the success of a project. This is a factor we consider as we identify any clear or potential risks. A qualified vendor will not provide a proposal response to an unrealistic project timeline, without requesting either to negotiate the contract or requesting a change order later in the project. If the timeline is unrealistic, the state also runs the risk that the vendor will create many change requests, leading to a higher cost.

Other things we consider when responding to a request for services include: is there a reasonable published budget, what are the minority/women-owned business (M/WBE) requirements, and are these new services that we are interested in and do they fit within our company's overall business objectives?

Every vendor may have their own checklist and/or process that they go through before making a decision to propose on new services. We are aware that states and their agencies want a wide-variety of high-quality responses from which to choose. Understanding the key areas that a proposer evaluates may help states provide requirements that lead to more high-quality and better value proposals. If you would like to learn more about our process, or have specific questions, please contact the Medicaid Consulting team.

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Read this if your agency is planning to procure a services vendor. 

Every published request for services aims to acquire the highest-quality services for the best value. Requests may be as simple as an email to a qualified vendor list or as formal as a request for proposal (RFP) published on a state’s procurement website. However big or small the request, upon receiving it, we, or a potential vendor, triages it using the following primary criteria:

  1. Scope of services―Are these services or solutions we can provide? If we can’t provide the entire scope of services, do we have partners that can?
    As a potential responding vendor, we review the scope of services to see if it is clearly defined and provides enough detail to help us make a decision to pursue the proposal. Part of this review is to check if there are specific requests for products or solutions, and if the requests are for products or solutions that we provide or that we can easily procure to support the scope of work. 
  2. Qualifications―What are the requirements and can we meet them?
    We verify that we can supply proofs of concept to validate experience and qualification requirements. We check to see if the requirements and required services/solutions are clearly defined and we confirm that we have the proof of experience to show the client. Strict or inflexible requirements may mean a new vendor is unable to propose new and innovative services and may not be the right fit.
  3. Value―Is this a service request that we can add value to? Will it provide fair compensation?
    We look to see if we can perform the services or provide the solution at a rate that meets the client’s budget. Sometimes, depending upon the scope of services, we can provide services at a rate typically lower than our competitors. Or, conversely, though we can perform the scope of services, the software/hardware we would have to purchase might make our cost lower in value to the client than a well-positioned competitor.

An answer of “no” on any of the above questions typically means that we will pass on responding to the opportunity. 

The above questions are primary considerations. There are other factors when we consider an opportunity, such as where the work is located in comparison to our available resources and if there is an incumbent vendor with a solid and successful history. We will consider these and other factors in our next article. If you would like to learn more about our process, or have specific questions, please contact the Medicaid Consulting team.
 

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What vendors want: Vendor decision process in answering requests for services

What the C-Suite should know about CECL and change management

Read this if you are at a financial institution. 

Some institutions are managing CECL implementation as a significant enterprise project, while others have assigned it to just one or two people. While these approaches may yield technical compliance, leadership may find they fail to realize any strategic benefits. In this article, Dan Vogt, Principal in BerryDunn’s Management and IT Consulting Practice, and Susan Weber, Senior Manager and CECL expert in BerryDunn’s Financial Services Practice, outline key actions leaders can take now to ensure CECL adoption success.  

Call it empathy, or just the need to take a break from the tactical and check in on the human experience, but on a recent call, I paused the typical readiness questions to ask, “How’s the mood around CECL adoption – what’s it been like getting others in the organization involved?” The three-word reply was simple, but powerful: “Kicking and screaming.”  

Earlier this year, by a vote of 5-2, the FASB (Financial Accounting Standards Board) closed the door to any further delays to CECL adoption, citing an overarching need to unify the industry under one standard. FASB’s decision also mercifully ended the on-again off-again cycle that has characterized CECL preparation efforts since early 2020. One might think the decision would have resulted in relief. But with so much change in the world over the past few years, is it any wonder institutions are instead feeling change-saturated?  

Organizational change

CECL has been heralded as the most significant change to bank accounting ever, replacing 40+ years of accounting and regulatory oversight practices. But the new standard does much more than that. Implementing CECL has an effect on everything from executive and board strategic discussions to interdepartmental workflows, systems, and controls. The introduction of new methods, data elements, and financial assets has helped usher in new software, processes, and responsibilities that directly affect the work of many people in the organization. CECL isn’t just accounting—it’s organizational change. 

Change management

Change management best practices often focus on leading from optimism—typically leadership and an executive sponsor talk about opportunities and the business reasons for change. Some examples of what this might sound like as it relates to CECL might include, by converting to lifetime loss expectations, the institution will be better prepared to weather economic downturns; or, by evolving data and modeling precision, an institution’s understanding and measure of credit risk is enhanced, resulting in more strategic growth, pricing, and risk management. 

But leading from optimism is sometimes hard to do because it isn’t always motivating—especially when the change is mandated rather than chosen.  

Perhaps a more judiciously used tactic is to focus on the risk, or potential penalty, of not changing. In the case of CECL, examples might include, your external auditor not being able to sign-off on your financials (or significant delays in doing so), regulatory criticism, inefficient/ineffective processes, control issues, tired and frustrated staff. These examples expose the institution to all kinds of key risks: compliance, operational, strategic, and reputational, among them.

CECL success and change management

With so much riding on CECL implementation and adoption going well, some organizations may be at heightened risk simply because the effort is being compartmentalized—isolated within a department, or assigned to only one or two people. How effectively leadership connects CECL implementation with tenets of change management, how quickly they understand, then together embrace, promote, and facilitate the related changes affecting people and their work, may prove to be the key factor in achieving success beyond compliance.  

One important step leaders can take is to perform an impact assessment to understand who in the organization is being affected by the transition to CECL, and how. An example of this is below. Identifying the departments and functions that will need to be changed or updated with CECL adoption might expose critical overlaps and reveal important new or enhanced collaborations. Adding in the number of people represented by each group gives leaders insight into the extent of the impact across the institution. By better understanding how these different groups are affected, leaders can work together to more effectively prioritize, identify and remove roadblocks, and support peoples’ efforts longer term.           

 
No matter where your institution is currently in its CECL implementation journey, it is not too late to course-correct. Leadership—unified in priority, message, and understanding—can achieve the type of success that produces efficient sustainable practices, and increases employee resilience and engagement.

For more information, visit the CECL page on our website. If you would like specific answers to questions about your CECL implementation, please visit our Ask the Advisor page to submit your questions. For more tips on documenting your CECL adoption, stay tuned for our next article in the series, revisit past articles, or tune in to our CECL Radio podcast. You can also follow Susan Weber on LinkedIn.

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Implementing CECL: Kicking and screaming

Read this if your organization offers health insurance through a health insurance exchange.

When the Affordable Care Act (ACA) was passed in 2010, it contained a known gap which made healthcare premiums unaffordable for some families covered under Medicare or employer-sponsored health insurance plans. The gap in the law, commonly referred to as the family glitch, was formalized in 2013 as the result of a Final Rule issued by the IRS. 

The “family glitch” calculates the affordability of an employer-sponsored health insurance plan based on the cost for the employee, not additional family members. An article published in April 2022 on healthinsurance.org estimated that the cost of health insurance for a family covered by an employer-sponsored plan could end up being 25% or more of the household’s income, even if the plan was considered affordable (less than 9.61% of the household’s income) for the employee alone. Almost half of the people impacted by the family glitch are children.

The family glitch was allowed to stand in 2013 partly because of concerns that resolving the issue could push more people off employer-sponsored plans and onto marketplace qualified health plans, ultimately raising the cost of subsidies. Since then, several attempts have been made to fix the issue, which affects around five million Americans. The most recent attempt was an executive order issued by President Biden soon after taking office in January 2021. The Office of Management and Budget has been reviewing regulatory changes proposed by the Treasury Department and IRS, details of which were published in April 2022. 

These regulatory changes would alter the way health insurance exchanges calculate a family’s eligibility for subsidies when the family has access to an employer-sponsored health insurance plan. If the changes go into effect in 2023 as proposed, audits of the 2023 fiscal year will need to account for the new regulations and potentially conduct different testing protocols for different parts of the year. 

Our team is closely following these proposed changes to help ensure our clients are prepared to follow the new regulations. Earlier this week, we attended a public hearing held by the Treasury Department, where representatives of various groups spoke in support of, or in opposition to the proposed regulatory change. Supporters noted that families with plans that offer expensive coverage for dependents would benefit from this change through reduced costs and more coverage options, including provider networks that may more closely align with the family members’ needs. Those in favor of the change anticipate that families with children would see the most benefit. 

Those opposed to the change expressed that due to the way the law is currently written, they do not see the regulatory flexibility for the administration to make this change through administrative action. Additionally, concerns were raised that families covered by multiple health insurance plans could be faced with higher out-of-pocket-costs due to having separate deductibles that must be met on an annual basis. Lastly, not all families that have unaffordable insurance would see financial relief under this proposal. 

The Treasury Department is expected to announce its decision in time for open enrollment for plan year 2023 which is scheduled to begin on November 1, 2022. Our team will continue to monitor the situation closely and provide updates on how the changes may impact our clients. 

For more information

If you have more questions or have a specific question about your situation, please reach out to us. There is more information to consider when evaluating the effects these changes will have on the landscape of healthcare access and affordability, and we’re here to help.

Article
Fixing the "family glitch": How a proposed change to the ACA will affect healthcare subsidies 

Read this if you are a leader in the healthcare industry.

BerryDunn recently held its first annual Healthcare Leadership Summit. Here are some highlights of the topics, presentations, and discussions of the day. 

Healthcare CFO survey results

The day began with an industry update where Connie Ouellette and Lisa Trundy-Whitten had the opportunity to present with Rob Culburt, Managing Director, Healthcare Advisory, The BDO Center for Healthcare Excellence & Innovation. Rob shared highlights from a recent survey of healthcare CFOs by The BDO Center for Healthcare Excellence & Innovation, while Connie and Lisa reflected on the similarities between study results and hospital and senior living clients.

It was no surprise the study found one of the most significant challenges CFOs are facing at both the national and local level is the sustained strain on healthcare systems amid the pandemic, and ongoing supply chain and workforce struggles. Additionally, providers are concerned about the upcoming reporting and regulation requirements. Also top of mind are the Provider Relief Fund (PRF) reporting requirements, as the requirements have been ambiguous and ever changing. There is also concern among survey respondents that a misinterpretation or reporting error could cause providers to have to pay back funding they received from PRF.

The BDO healthcare survey reported that 63% of the providers who responded to the survey are thriving, but 34% are just surviving. Out of those surveyed, 82% expect to be thriving in one year. You can view the full results of the survey here

Recruitment and retention in the current climate

Recruitment and retention of direct care providers are significant challenges within the senior living industry. Providers are facing workforce shortages that are forcing them to temporarily suspend admissions, take beds off line, and, in worst case scenarios close whole units or facilities. Sarah Olson, BerryDunn's Director of Recruiting and Bill Enck, Principal at BerryDunn discussed factors leading to the talent shortage, and shared creative short- and long-term recruitment and retention strategies to try.

Change management

The pandemic has forced many in healthcare to rethink how they operate their facilities. Employees have had to pivot on a moment’s notice, and in general do more with less. However, there are still initiatives that need to be undertaken and projects that must be completed in order for your facility to operate and remain financially viable. How do you manage the change associated with these projects? Can you manage the change without burning out your employees? Dan Vogt, BerryDunn Principal, and Boyd Chappell from Schoolcraft Memorial Hospital provided tips and strategies for managing change fatigue. 

Overall, the Leadership Healthcare Summit proved to be an informative and engaging event, and many new ideas and forward-looking strategies were shared to help enable providers to continue to weather current challenges and pistion themselves for success. For more in-depth information on these topics and others discussed, please visit our Healthcare Leadership Summit resources page

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Top three takeaways from BerryDunn's first annual Healthcare Leadership Summit 

Read this if you are at a state Medicaid agency.

The Covid-19 Public Health Emergency (PHE) placed US state and territory Medicaid programs on the front line of reorganizing what healthcare looks like for millions of Medicaid enrollees. Each Medicaid program shifted automation and manual procedures in order to comply with and benefit from the increased federal funding in early 2020. With the PHE winding down, every Medicaid program must look at how to return to regular operations and unwind, or undo, the continuous coverage requirement temporarily put in place by the Centers for Medicare and Medicaid Service (CMS). BerryDunn has collaborated with Medicaid programs to identify best practices and consider new opportunities to implement rollback methods in an effort to lower risk during the unwinding period and beyond. 

New learning programs considered

Administrators who have been assessing their staff and operational readiness to support the expected influx of renewals, policy changes, and staffing changes are considering launching learning programs ahead of the unwinding efforts. Using this time to engage with staff has uncovered the need to redeploy fundamental learning programs to prepare for the anticipated high volume of two-years of renewals. Administrators have also begun to engage with community leaders and health plan organizations in ways that provide coordinated and complete communication to beneficiaries. Many programs have looked at expanding benefits within the guidelines of CMS, such as extending post-partum coverage to a full 12 months and increasing reasonable compatibility to a larger percentage, recognizing the economy has evolved since 2020.

Other outreach efforts

During the pandemic, many beneficiaries moved without notifying the Medicaid program of the address change. Proactive Medicaid programs are working directly with health programs and medical facilities to ensure the most updated addresses are captured, and are using public transportation advertisements, online website reminders, and email notifications to encourage beneficiaries to update addresses.

In other locations with a high rate of unemployment in specific industries, Medicaid programs are working with identified outreach partners like unions and industry associations to communicate messaging of Medicaid benefits. Thousands of employees may have lost full-time employment during the pandemic and have returned to work with reduced hours and less benefits. As a sign of changing times, some programs are employing social media campaigns to connect with existing and new enrollees. 

Medicaid programs across the states and territories are finding creative ways to reach impacted communities. Program administrators are organizing staff and systems to be well positioned to undo the effects of the temporary policies. The dismantling of the two-plus years of PHE is expected to be performed within a 12-month period. As administrators eagerly anticipate the announcement of an extension or the pending PHE unwinding start date, one thing is certain: US states and territories are preparing to support an extensive population of Medicaid beneficiaries post pandemic.

BerryDunn is partnering with many states and territories to help ensure a successful unwind of temporary services and return to normal operations. If you would like to discuss how BerryDunn can support your needs, contact the Medicaid consulting team.
 

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How Medicaid programs are preparing for the operational challenges of the PHE unwinding

Read this if you use QuickBooks Online.

With gas prices so high, you need to track your travel costs as closely as possible. Consider getting a tax deduction for your business mileage.

If you drive even a little for business, it’s easy to let mileage costs slide. After all, it’s a pain to keep track of your tax-deductible mileage in a little notebook and do all the calculations required. If you do rack up a lot of business miles, you probably forget to track some trips and end up losing money.

QuickBooks Online offers a much better way. Its Mileage tools include simple fill-in-the-blank records that allow you to document individual trips. You can either enter the starting point and destination and let the site calculate your mileage and deduction or enter the number of miles yourself.

If you use QuickBooks Online’s mobile app, it can track your miles automatically as you drive (as long as you have the correct settings turned on). Here’s a look at how all of this works.

Setting up 

To get started, click the Mileage link in QuickBooks Online’s toolbar. The screen that opens will eventually display a table that contains information about your trips, but you need to do a little setup first. Click the down arrow next to Add Trip in the upper right corner and select Manage vehicles. A panel will slide out from the right. Click Add vehicle.

 
You’ll need to supply information about your vehicles before you can start entering trips.

You’ll need to supply the vehicle’s year, make, and model. Do you own or lease it, and on what date was the vehicle purchased or leased and put into service? Do you want to have your annual mileage calculated by entering odometer readings or have QuickBooks Online track your business miles driven automatically? When you’re done making your selections and entering data, click Save.

Entering trip data

You can download trips as CSV files or import them from Mile IQ, but you’re probably more likely to enter them manually. Click Add Trip in the upper right corner. In the pane that opens, you’ll enter the date of the trip and either the total miles or start and end point. You’ll select the business purpose and vehicle and indicate whether it was a round trip. When you’re done, click Save. The trip will appear in the table on the opening screen, and your current possible total deduction will be in the upper left corner, along with your total business miles and total miles.

If you want to designate a trip as personal, click the box in front of the trip in that table. In the black horizontal box that appears, click the icon that looks like a little person, then click Apply. Now, the trip will appear in the Personal column and will not count toward your business tax-deductible mileage. 

When you select a trip in the Mileage table, you can mark it as personal so it’s not included in your business tax-deductible miles.

Personal trips can count, too

If you use your vehicle(s) for personal as well as business purposes, tracking some of those miles can also mean a tax deduction. For tax year 2022, you can deduct 18 cents per mile for your travel to and from medical appointments. Note: Medical mileage is only deductible if medical exceeds a certain percent of AGI. Be sure to check with the IRS yearly tax code, as they update the mileage amounts annually.

And if you do volunteer work for a qualified charitable organization, the miles you drive in service of it can be deducted at the rate of 14 cents per mile. You can also claim the cost of parking and tolls, as long as you weren’t reimbursed for any of these expenses. Obviously, the IRS wants you to keep careful records of your charitable mileage, and QuickBooks Online can provide them.

QuickBooks Online doesn’t track these deductions, but you’ll at least have a record of the miles driven.

Auto-track your miles

The easiest way to track your mileage in QuickBooks Online is by using its mobile app. You can launch this and have it record your mileage automatically as you’re driving. Versions are available for both Android and iOS, and they’re different from each other. They also have more features than the browser-based version of QuickBooks Online, like maps, rules, and easier designation of trips as business or personal.

 
The iOS version of Mileage in the QuickBooks Online app

In both versions, you’ll need to click the menu in the lower right corner after you’ve opened the QuickBooks Online app and select Mileage. Make sure Auto-Tracking is turned on. Your phone’s location services tool must be turned on, too. There are other settings that vary between the two operating systems. You can search the help system of either app to make sure you get your settings correct if the onscreen instructions aren’t clear enough.

Of course, you won’t see the fruits of your mileage deductions until you file your 2022 taxes. But you can factor these savings in as you’re doing your tax planning during the year. Please contact the Outsourced Accounting team if you’re having any trouble with QuickBooks Online’s Mileage tools, or if you have questions with other elements of the site.

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How QuickBooks Online helps you track mileage

Read this if you are a Police Executive, City/County Administrator, or elected government official responsible for a law enforcement agency. 

Are your officers overwhelmed with workload? Have you been asked to do more with less? Is your agency struggling with maintaining sworn staffing levels? Has your community been questioning why the police respond to things that might be more appropriately handled by others?

If you answered yes to one or more of these questions, your agency might benefit from a comprehensive analysis of your police call-for-service (CFS) response model. 

Increasing CFS workloads

Many police agencies in the US have been struggling with increasing CFS workloads, while simultaneously facing ever-tightening budgets and unprecedented attrition and vacancy rates. As a result of these challenges and national trends calling for police response reform, many police departments have started to ask a very simple question: “Is there a better way?”

Considering alternatives to police CFS response is not new. In fact, many agencies already use some form of CFS diversion, whether through a telephone response unit (TRU), online reporting, mobile apps, or the use of non-sworn personnel. What is different and new in the most recent discussion is the understanding that this conversation is not simply about providing these alternatives as possible options.

It is about considering fundamental changes to how police departments do business, including identifying collaboration opportunities with other organizations and in some cases outsourcing certain CFS types entirely.

Despite growing interest among police agencies in identifying alternatives to the traditional police CFS model, many have struggled to deliver an objective process that can produce meaningful results, and in some cases, suggested revisions have met with resistance from staff, elected officials, and community members.   

Best-practices approach to call for service response model

The best-practices approach to conducting an Essential CFS Evaluation should be one that is highly collaborative, but also expand beyond the walls of the police department. The 21st Century Policing Task Force final report explains:

Law enforcement agencies should work with community residents to identify problems and collaborate on implementing solutions that produce meaningful results for the community… and do things with residents in the co-production of public safety rather than doing things to or for them. 

Determining possible alternatives to traditional CFS police response requires substantial data collection and analysis to inform and guide outcomes and recommendations. It also requires a thorough and comprehensive process that considers:

  • Legal mandates
  • Immediate response needs
  • Potential risk
  • Workload volumes by CFS type
  • Operational policies and training
  • Alternative resources, whether or not they currently exist
  • Community priorities and expectations
  • Fiscal impacts

The cost of providing consistent and effective public safety services is one of the more critical reasons for considering CFS response alternatives. Although officer salaries vary by state, region, or department, the cost of staffing a non-sworn position is typically 40%-45% of the cost of a sworn officer.  

There is a common reason why the legal profession has attorneys and paralegals, the medical profession has doctors and physician’s assistants, and why many ambulance companies have moved to a paramedic and emergency medical technician (EMT) team, as opposed to staffing two paramedics in one ambulance. Cost is a driving force in these examples and the same circumstances are present in the law enforcement industry (among others). A well-trained non-sworn police staff member can handle a variety of CFS that do not require the presence of a sworn officer—likely at half the cost. Shifting the work burden from sworn to non-sworn personnel benefits officers by freeing them up to perform tasks that require an officer to respond, and it benefits the department and community by reducing costs. 

Beyond the issue of cost, there is also increasing conversation about the effectiveness and appropriateness of using police personnel to manage a variety of CFS types, including mental health incidents and those involving the unhoused, for example. Regardless of the CFS type, it is critical to use a process that involves influential participation by both providers and consumers. 

Making changes to the traditional police CFS response model is involved and it requires a thoughtful approach. BerryDunn has developed an Essential CFS Evaluation process that considers numerous critical factors to produce data that police staff, community and elected leaders can rely upon in making critical decisions about future public safety needs. 

If you are curious or have questions about our Essential CFS Evaluation process, our dedicated Justice & Public Safety team is available to discuss your organization’s needs.

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Challenge accepted: Fixing the traditional call-for-service model

Read this if you are at a state Medicaid agency. 

As the end of the Public Health Emergency becomes more likely, much attention has been paid to the looming coverage cliff as state Medicaid agencies re-determine eligibility for their programs. The impacts can be mitigated in part by planning and taking proactive steps.

In the unsettling initial days of the COVID-19 Public Health Emergency (PHE), the Centers for Medicare and Medicaid Service (CMS) temporarily increased federal matching funds for state Medicaid programs. In exchange, states would suspend redeterminations of enrollees’ eligibility for the duration of the PHE. 

For Medicaid, states were in effect prohibited from disenrolling an individual from Medicaid programs. The result, according to CMS data, is 14.8 million more people were enrolled in Medicaid as of late 2021 than before the pandemic, reaching a total of nearly 79 million Medicaid enrollees.  According to one estimate, the end of the PHE could bring a decline in the number of Medicaid enrollees by as many as 15 million. This number includes an estimated 8.7 million adults and 5.9 million children. 

Local and state government eligibility staff will need to review the submitted documents and determine if these members qualify for continued Medicaid coverage. The potential exists for members to lose coverage, due to factors such as having moved, not realizing their circumstances have otherwise changed, or being unable or unaware to return the required paperwork within appropriate timeframes.

State Medicaid agencies strive to maintain an equitable program while remaining trusted stewards of public funds. With a large base of beneficiaries, this change is expected to impact the community and the healthcare market, with broad implications for public health. Similarly, the federal requirement for continuous health coverage has also helped state Medicaid agencies by easing the strain on organizations during pandemic-related disruptions. 

For these reasons state Medicaid agencies may search for routes to limit the loss of coverage. This can be accomplished through finding policy levers to retain members, establishing routes to alternative forms of insurance, and mitigating the risk of coverage loss for members. 

Mitigating the likelihood of becoming uninsured

State Medicaid agencies can reduce the risk that members lose their coverage and become uninsured through a number of steps. 

  • Designing comprehensive, multi-pronged, and targeted communication strategies. States can help Medicaid members understand the requirements and timelines required to maintain their coverage.
  • Updating systems to automate and reduce administrative burden. Maximizing ex parte renewals through the use of existing data that is stored in integrated systems.
  • Making key decisions early. States can minimize coverage loss by carefully planning the unwinding process and their approach to resuming Medicaid eligibility renewals.
  • Coordinating with other forms of coverage. Confirm or design user-friendly pathways by which a member is transferred or referred to other alternatives like the Marketplace or CHIP.
  • Leveraging their health plans. Particularly when it comes to coordinating outreach and updating member information. Managed care plans are also able to refer members who are losing coverage to other qualified health plans.

Policy levers for retaining members

States may consider reviewing emergency state plan amendments and appendix k amendments completed during the PHE to determine what flexibilities are possible to continue under existing authorities. At the same time, states should consider what other policy options may help retain coverage for existing members- for example:

  • Adopt 12 months continuous eligibility. This can be done for children via a State Plan Amendment (SPA), for adults through an 1115 waiver, and for individuals enrolled in BHP (via BHP Blueprint revision) 
  • Establish 12 months of postpartum coverage. This can be done through several paths, including SPAs 
  • Review operational policy for efficiencies. For example, a State could consider modifying the frequency of periodic data matching 

Next steps

The US Department of Health and Human Service has previously indicated its intention to provide notification to states of the end of the PHE 60 days before its scheduled end. The PHE was renewed in April 2022, and as of this writing will last until mid-July, meaning enrollees could lose Medicaid coverage as soon as August 1. The enhanced FMAP and the Maintenance of Eligibility (MOE) requirements are in place until the end of the quarter in which the PHE ends. In the case of a July 2022 end date to the PHE, the enhanced FMAP would last through September 30, 2022. 

Regardless, Medicaid agencies will need to begin reviewing all enrollees’ eligibility, performing outreach, and designing system updates this summer. In terms of next steps, states should consider the following:

  • Evaluate your program and identify initiatives to prioritize in the coming year. Ask your CMS contact about the latest applicable guidance. 
  • Develop Advanced Planning Documents (APDs) to help fund technology needs for initiatives, along with training your SMA team and providers. 
  • Implement a communications management approach to engage stakeholders, and inform affected Medicaid members.
  • Marshal project management resources and develop a realistic and achievable roadmap to success.  
  • Explore agency contracting vehicles, cooperative contracts, and other procurements tools. 

We’re here to help. If you have more questions or want to have an in-depth conversation about your specific situation, please contact the Medicaid consulting team.

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Medicaid coverage gap: Tools and strategies for Medicaid agencies to help retain members

Read this if you are a not-for-profit organization.

With springtime upon us, it may be difficult to start thinking about this upcoming fall, but that is exactly what many folks in the nonprofit sector are starting to do. The reason for this? It’s because 2022 brings with it the mid-term election cycle. While technically an off-year election, many congressional and gubernatorial races are being contested, in addition to a myriad of questions that will appear on ballots across the country. It is around this time of year we start to see many questions from clients in the nonprofit sector in the area of political campaign activities, lobbying (both direct and grassroots), and education/advocacy.

This article will discuss the three major types of activities nonprofit organizations may or may not undertake in this arena and will offer guidance to give organizations the vote of confidence they need to not run afoul of the potential pitfalls when it comes to undertaking these activities.

Political campaign activity

Political campaign activities include participating or intervening in any political campaign on behalf of (or in opposition to) any candidate for elective public office, be it at the federal, state, or local level. Examples of such activities include contributions to political campaigns as well as making public statements in favor of or in opposition to any candidate. The IRS explicitly prohibits section 501(c)(3) organizations from conducting political campaign activities, the consequence of doing so being loss of exempt status. However, other types of exempt organizations (such as 501(c)(4) organizations) are allowed to engage in such activities, so long as those activities are not the organization’s primary activity. Only Section 527 organizations may engage in political campaign activities as their primary purpose. 

Direct lobbying

Direct lobbing activities attempt to influence legislation by directly communicating with legislative members regarding specific legislation. Examples of direct lobbying include contacting members of Congress and asking them to vote for or against a specific piece of legislation.

Grassroots lobbying

Grassroots lobbying, on the other hand, attempts to influence legislation by affecting the opinions of the general public and include a call to action. Examples of grassroots lobbying include requesting members of the general public to contact their representatives to urge them to vote for or against specific legislation.  

A quick way to remember the difference:
Political = think “P” for People – advocating for or against a specific candidate 
Lobbying = think “L” for Legislation – advocating for or against a specific bill

Education/advocacy

Organizations may engage in activities designed to educate or advocate for a particular cause so long as it does not take a specific position. For example, telling members of Congress how grants helped constituents would be considered an educational activity. However, attempting to get a member of Congress to vote for or against specific piece of legislation that would affect grant funding would be considered lobbying. Another example would be educating or informing the general public about a specific piece of legislation. Organizations need to be mindful here as taking a specific position one way or the other would lend itself to the activity being deemed to be lobbying, and not merely education of the general public. There is no limit on how much education/advocacy activity a nonprofit organization may conduct.

Why does this matter?

As you can see, there is a very fine line between lobbying and education, so it is important to understand the differences so that an organization conducting educational activities does not inadvertently end up conducting lobbying activities.

Organizations exempt under Code Section 501(c)(3) can conduct only lobbying activities that are not substantial to its overall activities. A 501(c)(3) organization may risk losing its exempt status and may face excise taxes on the lobbying expenditures if it is deemed to be conducting excess lobbying, whereas section 501(c)(4), (c)(5), and (c)(6) organizations may engage in an unlimited amount of lobbying activity.

What is substantial?

Unfortunately, there is no bright line test for determining what is considered substantial versus insubstantial. As an industry standard, many practitioners have taken a position that insubstantial means five percent or less of total expenditures, but that position is not codified and could be challenged by the IRS. 

Section 501(c)(3) organizations that intend to conduct lobbying activities on a regular basis may want to consider making an election under Code Section 501(h). This election is only applicable to 501(c)(3) organizations and provides a defined amount of lobbying activity an organization may conduct without jeopardizing its exempt status or becoming subject to excise tax. The 501(h) election limit is based on total organization expenditures with a maximum allowance of $1 million for “large organizations” (defined as an organization with total expenditures over $17,000,000). 

While the 501(h) election provides some clarity as to how much lobbying activity can be conducted, it may be prohibitive for some organizations whose total expenditures greatly exceed the $17,000,000 threshold. Another item to be aware of is that the lobbying threshold applies to all members of an affiliated group combined, which means the entire group shares the maximum threshold allowed. 

Another option for those engaging in lobbying is to create a separate entity (such as a 501(c)(4) organization) which conducts all lobbying activities, insulating the 501(c)(3) organization from these activities. As previously mentioned, organizations exempt under Code Section 501(c)(4) can conduct an unlimited amount of lobbying activities but can only conduct limited political campaign activities.

What about political campaign activities?

Section 527 organizations, known as political action committees, are exempt organizations dedicated specifically to conducting political campaign activities. If a 501(c)(4), (c)(5), or (c)(6) organization makes a contribution to a 527 organization, it may be required to file a Form 1120-POL and be subject to tax at the corporate tax rate (currently a flat 21%) based on the lesser of the political campaign expenditures or the organization’s net investment income. State income taxes may also be applicable. Section 501(c)(3) organizations may not make contributions to 527 organizations. 

If your organization is considering participation in any of the above activities, we would recommend you reach out to your not-for-profit tax team for additional information. We’re here to help!

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Lobbying and politics and education, oh my!