906 KAR 1:090. Postaudit appeal procedures of programs and vendors of services with whom the Cabinet for Human Resources has contracted.
RELATES TO: KRS 194.025(2), (3), 194.030(12), 194.040, 194.050(1)
STATUTORY AUTHORITY: KRS 194.050(1)
NECESSITY, FUNCTION, AND CONFORMITY: The Cabinet for Human Resources is authorized by KRS 194.025(3) to enter into such contracts and agreements as may be necessary to carry out the general intent and purposes of the cabinet. The Office of the Inspector General is directed by KRS 194.030(12) to conduct audits and investigations of programs and vendors of services with whom the cabinet has contracted. It is the function of this administrative regulation to provide for a postaudit process and an audit appeal process for programs and vendors of services with whom the cabinet contracts.
Section 1. Postaudit Process. Except as otherwise provided in Section 3 of this administrative regulation, the following procedures are established in the Cabinet for Human Resources:
(1) An exit conference shall be scheduled by the auditor upon the completion of an audit. Representatives at this meeting shall include at a minimum: an auditor who participated in the audit and an authorized representative of the audited entity who may have an attorney and/or accountant present.
(2) Following the exit conference, except as noted in subsection (3) of this section, the Division of Audits or the private audit firm will provide a draft copy of the preliminary findings to the audited entity and the program department or office representative.
(3) Following the exit conference for audits of the programs identified in Section 3(1) through (9) of this administrative regulation, the Division of Audits will issue a final audit report to the Department for Medicaid Services only.
(4) The audited entity shall have thirty (30) days from the date of receipt of the draft report to request a formal exit conference or to submit a written response to the Division of Audits or private audit firm. The written response shall identify all issues in dispute and shall include supporting documentation or reference to such documentation.
(5) Upon receipt of the audited entity's response, a copy thereof shall be submitted by the Division of Audits (or the private audit firm) to the appropriate program department or office for review, comment and resolution of such issues as may be possible. The audited entity, Division of Audits (or the private audit firm) and the program department or office shall communicate or meet as necessary to clarify the issues, review documentation and resolve such issues as may be possible. Upon completion of the resolution process the Division of Audits (or the private audit firm) shall issue a final audit report.
(6) The Division of Audits or the private audit firm shall submit the final audit report to the audited entity, the program department or office. In situations where the private audit firm performed the audit, such firm shall also send a copy of the final report to the Division of Audits.
Section 2. Audit Appeal Process. (1) Upon issuance of the final audit report by the Division of Audits or the private audit firm, the audited entity desiring an appeal shall have thirty (30) days from date of issuance to submit a written statement of appeal and request for hearing to the Office of the Secretary of the Cabinet for Human Resources. The statement of appeal by the audited entity shall set forth the specific issues which remain in dispute and the basis upon which the audited entity relies to support its position.
(2) Upon receipt of the statement of appeal and request for hearing, an attorney from the Office of the General Counsel, who will serve as chairperson of the audit appeal panel, shall schedule a hearing which shall be held within 120 days of receipt of the statement of appeal and request for hearing unless waived by the audited entity. Notice of the hearing shall be sent to the audited entity by certified mail at least fifteen (15) days prior to the hearing date. In addition to the chairperson, the audit appeal panel shall be composed of two (2) representatives within the Cabinet for Human Resources appointed by the secretary. The chairperson shall be a nonvoting member except in case of a tie vote. The panel members shall not have participated in the administration of the program involved in the audit or in the performance of the audit in dispute.
(3) The chairperson shall conduct the proceedings in an orderly fashion consistent with the rules of conduct of an administrative hearing and due process of law.
(4) The decision of the panel shall be issued within sixty (60) days after the hearing except that if briefs are submitted by the parties the decision will be issued within thirty (30) days after their submission. The decision shall reflect the basis upon which it is given.
(5) Written notice of the final decision will be sent to the secretary, the audited entity, the program department or office, the Director of the Division of Audits, and, if appropriate, the private audit firm. The decision of the panel shall constitute the final decision of the cabinet.
(6) Subsequent to the appeal or acceptance of the audit findings by the audited entity, without appeal, the appropriate department commissioner or office director will take action to effect formal closure of the audit.
Section 3. Audits Conducted for the Purpose of Determining Allowable Costs and Reimbursement for Certain Services. Audits conducted for the purpose of determining allowable costs and reimbursement relative to the following services shall follow the appeal procedures established in each respective program's reimbursement manual on file with the Department for Medicaid Services except that such audits conducted for fiscal periods ended prior to July 1, 1982 for the purpose of determining allowable cost for the Title XIX program shall follow the appeal process set forth in Section 2 of this administrative regulation for appellate resolution:
(1) Adult day care;
(2) Dual licensed;
(3) Home health agencies;
(4) Home and community based waiver;
(5) Certified nursing facility;
(6) Mental (psychiatric) hospitals;
(7) Primary care;
(8) Swing bed;
(9) IMD (institute for mental disease); and
(10) Community mental health centers. (11 Ky.R. 102; eff. 8-7-84; recodified from 900 KAR 1:011, 8-30-91; Am. Ky.R. 1616; eff. 1-10-92.)