CMS Pub. 100-06, ch. 1, § 200

A1-1223, B1-4223

Click here to view exhibit of Schedule of Net Hours Available, Form CMS-3258.

200.1 - Completing the Schedule of Net Hours Available - (Rev. 1, 08-30-

02)

A1-1223.1, B1-4223.1

This form is not a required attachment to the initial Budget Request unless specifically

requested by the contractor's RO. It is provided here for illustration purposes since the net

hours available figure must appear on the BR. It is calculated as described below.

NOTE: The net hours available reported on each IER and the FACP will be based upon

the net hours available shown on the contractor's initial BR.

A. Contractor

Name and Address

Contractor enters the organization's official name and

address.

B Identification

Number

Contractor enters the five-digit Medicare-assigned

contractor number.

C. Fiscal Year Contractor enters the fiscal year that corresponds to

the administrative budget and cost report

D. Line 1 - Period Contractor indicates the months involved.

E. Line 2 - Cumulative Days

per Period

Contractor indicates the calendar count of days

involved

F. Line 3 - Weekends Contractor indicates the calendar count of weekend

days involved.

G. Line 4 - Holidays Contractor indicates the calendar count of holidays

involved.

H. Line 5 - Average

Vacation

Contractor indicates the average vacation per

employee based on personnel records.

I Line 6 - Average

Sick Days

Contractor indicates the average sick days per

employee based on personnel records.

J. Line 7 - Other Leave

Average

Contractor indicates the average days used for other

leave per employee based on personnel records.

K. Line 8 - Total Days Off Sum of lines 3, 4, 5, 6, and 7.

L. Line 9 - Days Available Line 2 minus Line 8

M. Line 10 - Working Hours

Per Day

Contractor enters the normal working hours per day.

N. Line 11 - Authorized Break-

time

Contractor enters the amount of time employees are

authorized to use for nonproductive purposes, e.g.,

coffee breaks.

O. Line 12 - Net

Cumulative Daily Hours

Available

Line 10 minus Line 11.

P. Line 13 - Net Hours

Available Per Employee

Line 12 multiplied by Line 9.

210 - Contractors Performing Services for Other Medicare Contractors

- (Rev. 1, 08-30-02)

A1-1230, B1-4230

Where services such as bill processing, EDP services, provider audit, or appeals

processing are performed by one contractor for another, the following budget preparation

procedures apply.

210.1 - Servicing Contractor - (Rev. 1, 08-30-02)

A1-1230.1, B1-4230.1

The servicing contractor furnishes the receiving contractor an appropriate estimate of the

costs described in §100 by activity.

The estimates are submitted on the Activity Form by cost category. For provider audit, it

furnishes the Contractor Auditing and Settlement Report with applicable activities and

columns completed. ( See §290.) The estimate for these services includes all direct, and

an equitable share of indirect, costs expected. All estimates are in accordance with the

principle that neither the contractor providing the service nor the contractor receiving the

service incurs a profit or loss on the transaction. The contractor shall not include related

estimated costs as part of its budget submission. It shall furnish this information to the

receiving contractor.

210.2 - Receiving Contractor - (Rev. 1, 08-30-02)

A1-1230.2, B1-4230.2

The receiving contractor includes the estimated costs, furnished by the servicing

contractor, as a subcontract cost and identifies the servicing contractor in the Remarks

section of that Activity Form.

220 - Budget Justification - (Rev. 1, 08-30-02)

A1-1240, B1-4240

The annual BPRs describes the statement of work and level of effort for each Medicare

function to which the contractor must adhere. The General Instructions section of the

BPRs details the narrative, analysis, worksheets and data requirements that constitute the

general instructions for the budget justification. Additional requirements may be

identified in each functional area. The contractor shall refer to the BPRs for the current

year's budget justification requirements.

230 - Completing the Budget Request - (Rev. 1, 08-30-02)

A1-1255, B1-4255

The contractor uses this basic document for submitting the annual estimate of costs for

administrative functions and duties related to the Medicare program. The format and

related explanations must furnish sufficient information to permit a meaningful review of

the estimates. The information requested and as supplemented by the BPRs form the

basis for the budget data for each FY.

The base period for preparation and comparison of the BR is the prior year's budget

unless otherwise stated in the BPRs. The contractor shall consider its most recent

experience in preparing financial cost estimates.

230.1 - Transmittal - (Rev. 1, 08-30-02)

A1-1255.1, B1-4255.1

The contractor shall transmit the complete BR consisting of the activity forms and

supporting schedules via CAFM II.

230.2 - Hard Copy Requirements - (Rev. 1, 08-30-02)

A1-1255.2, B1-4255.2

The contractor shall submit the original to the RO and one copy to CO of all forms, all

supporting schedules, and all narrative justifications that are not transmitted via CAFM

II. It shall address CO hard copies to:

Centers for Medicare & Medicaid Services

Division of Financial Operations, OFM

7500 Security Boulevard

Baltimore, Maryland 21244

230.3 - Activities - (Rev. 1, 08-30-02)

A1-1255.3, B1-4255.3

Descriptions of these items are in §§100.

230.4 - Hours - (Rev. 1, 08-30-02)

A1-1255.4, B1-4255.4

The contractor shall enter hours as developed using instructions in §90.9P. It shall round

to the nearest hour

230.5 - Costs - (Rev. 1, 08-30-02)

A1-1255.5, B1-4255.5

The contractor shall enter costs and credits as in §90.9. It shall round entries to the

nearest hundred dollars.

230.6 - Workload - (Rev. 1, 08-30-02)

A1-1255.6, B1-4255.6

The contractor shall enter the workloads for the budget period. (See §90.9O.)

230.7 - Net Hours Available (Miscellaneous Section) - (Rev. 1, 08-30-02)

A1-1255.7, B1-4255.7

The contractor shall enter the number of net productive hours required to convert total

productive hours to equivalent staff-years for the budget period. (See §200.)

230.8 - Narrative and Financial Analysis Requirements - (Rev. 1, 08-30-

02)

A1-1255.8, B1-4255.8

The contractor shall include a narrative analysis (budget justification) that summarizes

the funding and workload requested for each line of operation. The analysis shall provide

information that fully justifies its request, includes all required forms as defined herein,

and meets the requirements stated in the annual BPRs. Operations personnel should

actively participate in the development of the BR.

If CMS workload volumes are supplied and those volumes are acceptable, no volume

analysis is required. Requests for changes in workload from any CMS provided volumes

must be supported by a volume analysis that includes the historical data used to make the

projection, a description of the forecast methodology used and the actual forecast

computation. This applies to all line items with identifiable workload volumes.

230.9 - Financial Information Survey - (Rev. 1, 08-30-02)

A1-1255.9, B1-4255.9

This survey must be completed and submitted in hard copy as an attachment to the

contractor's initial BR.

If the contractor has a new severance policy in place or its previous severance policy has

been updated, it shall:

• State the effective date for the new or updated severance policy.

• Summarize its severance/separation pay policy including both management and

staff. State the length of service criteria, types of cost covered by the policy, the

effective date of the policy and any other criteria used in determining the amount

of payment. Identify and discuss any related benefits which may be payable to or

on behalf of the employee beyond the standard severance payment(s).

• Attach a dated extract of its corporate severance pay policy and any related

benefits payable to or on behalf of the employee related to the severance or

separation.

• If there is no change since the submission of the initial BR for last year, state "No

Change."

The contractor shall estimate the number of direct Medicare employees (excluding

temporaries) in this BR FY, the average number of years that staff and management have

been employed full time on the Medicare contract and average number of years each has

been with the corporation:

• No. of direct Medicare employees: Staff _____ Management _____

• Avg. yrs. employed Full Time with

Medicare: Staff _____ Management _____

• Avg. yrs. employed with corporation: Staff _____ Management _____

The contractor shall indicate whether, during the last two years or for this BR, it has

acquired or intends to acquire (through lease or purchase) any Electronic Data Processing

Equipment (as reported on the Cost Classification Report, see §180.4) or any EDP

operations change which will result in a TOTAL charge (not annual depreciation) to the

Medicare program exceeding $500,000?

Yes or No _________

If yes, it shall state the following:

• Month and year of acquisition:

• Type of acquisition (new lease, replacement lease, purchase):

• Reason for acquisition (obsolescence, overcapacity):

• Amount included in this BR for the equipment or operations change: $_______.

• Total number of depreciable years _________

• Number of depreciable years remaining:__________

NOTE: Any response to the above does not constitute prior notice/approval as required

by the contract.

The contractor shall provide a breakdown of the "average un-depreciated balance of

assets" allocated to Medicare as included in the Cost Classification Report (CCR) for this

BR (See §180.51.)

Facilities or Occupancy: $ ______

Furniture and Equipment: $ ______

Electronic Data Processing Equipment: $ ______

Other (specify): $ ______

Total (agree to CCR): $ ______

The contractor shall identify all leases or rentals in effect in this BR FY for

facilities/occupancy, furniture and equipment, EDP equipment, and Other where the

annual charge to Medicare for this BR FY will equal or exceed $500,000. It shall provide

the annual amount included in the FY BR and lease/rental expiration month and year. If

none, it shall state none.

NOTE: The contractor's RO may require a listing of all subcontracts/leases for review.

The contractor shall contact its RO if it is in doubt.

In conjunction with the facilities and occupancy costs, provided as Item 3 on the Cost

Classification Report, the contractor shall summarize the Medicare costs by general

categories below. It shall include base and budget period costs:

It shall complete the following information:

Indicate Base Period you are using: ___________

1. Depreciation and Rent or Lease:

• Depreciation Base Period:_______ Budget Year: _______

(Use when buildings and land are owned. Building costs are total costs excluding interest

expenses, but including parking lots, landscaping, etc.)

• Rent or Lease: Base Period: _______ Budget Year: _______

(Use when facilities are rented either from an outside source or an affiliate. These costs

include amortization of leasehold improvements.)

2. Utility Costs: Base Period: _______ Budget Year:________

(Report power, heat, and light for owned space and where not included in rental or lease

costs.)

3. Other Costs: Base Period: _______ Budget Year: _______

(This includes items such as janitorial services, security, carpentry, plumbing, electrical

and all work associated with non-permanent type partitioning and moving operations

within the building, if not included in the rental or lease cost.)

4. Total Costs: Base Period: _______ Budget Year: _______

(Total cost of 1 through 3 to agree with Facility and Occupancy costs reported on the

Cost Classification Report.)

5. Cost Per Net Usable Square Foot: See Appendix B, Article X.B. of the Medicare

contract/agreement for the definition of net usable space.

Base Year: Total Cost: ______ Square Feet: _____ Cost Per Sq. Foot: ____

Budget Year: Total Cost: ______ Square Feet: _____ Cost Per Sq. Foot: ____

240 - Additional Instructions Pertaining To Supplemental Budget

Requests (SBRs) - (Rev. 1, 08-30-02)

A1-1256, B1-4256

A. General

These instructions pertain to SBRs filed after action is taken on the initial BR discussed

in §230. An SBR is a contractor's request for additional funding after the FY has begun.

The SBR is a request for additional funding for one or more activities. To the extent that

the request, if approved, would result in a reclassification of the non-incremental costs

and hours charged to other activities/functions, the contractor shall submit a schedule of

non-incremental costs in accordance with §100.6C. It is not copied from either the

NOBA or the BR. The contractor shall use the BPRs as a basis for providing its SBR

justification. A SBR is generally filed after the contractor receives a NOBA for the full

FY and it determines that there are insufficient funds to perform the statement of work

outlined in the BPRs and the NOBA. A SBR may also be required if there is a special

project for which it would like to request funding. Refer to §100.6 regarding PIs.

An SBR may also be required in response to a CMS-generated request that a contractor

perform a specific task. Such a CMS-generated request should be in writing and may

include written procedures, manual issuances or any written request for work pertaining

to special projects.

A copy of the SBR, with rationale, must be sent to both the contractor's RO and CO at the

time the SBR is transmitted via CAFM II. It shall send a copy to CO to the same address

that it sends its BR. See §230.2 for address.

B. Definitions

The contractor shall base the SBR on the latest released NOBA or negotiated budget and

any outstanding SBRs. An SBR is appropriate if there is a need for a change in total

funding, a transfer of funds among functions, and/or a change in workload. The

contractor shall select the correct activity code and enter incremental costs including

hours and workload. It shall annotate in the Remarks section of the Activity Screen the

NOBA number on which the current SBR is based.

EXAMPLE: An SBR requesting additional claims funding of $200,000, workload of

150,000 along with additional telephone inquiries funding of $100,000 and workload of

25,000 would be transmitted as follows:

Activity Code 11001, (Bills/Claims Processing): $200,000 Workload 150,000

Activity Code 13001, (Telephone Inquiries): $100,000 Workload 25,000

Remarks: This SBR is based on NOBA #1.

The contractor shall not include funding previously requested and denied unless it is

specifically re-requesting funding for this item and has provided a revised budget

justification to support the request.

C. Shared Systems

The CMS requires that each user group designate one of its members to submit SBRs for

systems improvements on behalf of the group or, if the servicing subcontractor (the

subcontractor performing the systems improvement work) is also a Medicare contractor,

that the SBR be submitted by that Medicare contractor.

If the servicing subcontractor is a commercial vendor, the SBR must be submitted by the

designee on behalf of the group through the designee's parallel RO or the designated RO

with a copy to CO. If the servicing subcontractor is another Medicare contractor, that

contractor submits the SBR to its parallel RO or the designated RO with a copy to CO.

In all cases, the SBR submitted is consolidated to include the request for the servicing

subcontractor and any related funds requested by the other user group members.

However, the consolidated SBR will clearly state the amount(s) requested on behalf of

each user as well as the servicing subcontractor, any unique user expenses for each user

pertaining to the shared system activity, and delineate projected savings for each user.

All funding through the NOBA is to the designee or Medicare contractor. Cost reporting

corresponds to the NOBA. User unique expenses such as training and/or related travel are

funded directly to each user with costs reported accordingly. This applies even though the

requested funds are included in the consolidated SBR.

The designated contractor is responsible for amending its subcontract with the

maintenance vendor, requesting prior approval if the project costs exceed its threshold in

the prime contract and accounting for proper expenditure of the project funds.

D. Minimum Documentation Requirements – Justification

A complete SBR must include transmission on CAFM II and submission of a written

justification supporting the request. An appropriate official must submit the justification.

The justification must provide sufficient detail for each cost category (see §90.9 and

below) and explicitly link the request to the BPRs and/or general instructions that require

the work and cost.

If the request equals or exceeds the smaller of $100,000 or 5 percent of the total PM or

MIP NOBA, whichever is applicable, the contractor shall define the major steps

necessary to accomplish the proposed effort (at least 3 steps) and provide an operational

and financial rationale which addresses each of the cost categories for each step. If the

activity cannot be broken down into at least 3 steps, it shall explain why not.

The operational rationale should explain the scope and types of efforts contemplated. The

financial rationale should explain how the estimated funding needs were determined for

each cost category through the identification of assumptions, supporting information and

calculations used to arrive at the estimated amounts.

1. Salaries/Wages and Fringe Benefits

The contractor shall provide job classes, number of employees (actual or FTEs), rates,

period of work, major deliverables and/or milestones with dates. It shall discuss any

premium payments. (These two cost categories may be combined.)

2. EDP Equipment

The contractor shall discuss how the amount was determined or allocated and identify

any extraordinary items required. If any equipment is to be leased or purchased, it shall

provide details and, if appropriate, include a cost-benefit analysis.

3. Subcontracts

The contractor shall identify subcontractor, scope, major deliverables, period of work and

rates.

4. Other Direct Costs

The contractor shall discuss how the amount was determined or allocated and any

extraordinary items required. If any items are to be leased or purchased, it shall provide

details and, if appropriate, include a cost-benefit analysis.

5. Overhead/G&A

The contractor shall discuss how the amount was determined or allocated and any

extraordinary items required. (These two cost categories may be combined.)

6. Hours

The contractor shall identify and discuss both direct and subcontract hours.

7. Workloads

The contractor shall identify and discuss all significant workloads.

250 - The Notice of Budget Approval (NOBA) - (Rev. 1, 08-30-02)

A1-1261, B1-4261

A NOBA is issued by CMS to notify contractors of approved amounts for PM and MIP

administrative expenses for the FY, including the amount of funds certified to be

available. Contractors are not authorized to incur expenses in excess of the total certified

amount for PM or MIP. PM and MIP funding must not be co-mingled and this limitation,

therefore, applies to each separately. In addition, the contractor shall refer to the BPRs

and/or the contract/agreement for the authority to shift funds among PM or MIP

functions.

The first NOBA issued for a FY is given a supplemental number of "0". Subsequent

NOBAs are numbered sequentially. Where agreement on a budget cannot be reached,

CMS issues a NOBA for less than the full FY year pending completion of negotiations.

These NOBAs are annotated as a partial approval in the "Remarks" section and numbered

as above. CMS may issue NOBAs for less than a full FY when necessary.

All dollar amounts will be rounded to the nearest hundred, hours to the nearest hour, and

bills payment workload to the nearest hundred. The end of FY NOBA is not rounded.

There are separate summary screens and certifications for PM activities and MIP

activities.

The NOBA displays information by function and activity. See §100 for definitions of

functions and activities. For each function and activity, hours, total cost, and workload

will be displayed. The hours, total cost, and workload shown for a function is the sum of

the data input for the activities for that function.

250.1 - End of FY NOBA - (Rev. 1, 08-30-02)

A1-1261.1, B1-4261.1

When claimed costs are less than the total approved for the FY, CMS issues a revised

NOBA reducing the FY funding to the amount claimed on the FACP. This reduction

keeps the amount of obligated funds to a minimum, thereby permitting maximum

flexibility in the use of appropriated funds. If the contractor subsequently finds that not

all costs have been claimed, it submits a revised FACP.

If the administrative cost reported in the October - September IER or FACP exceeds the

total approved budget, the contractor shall justify the over expenditure to the RO with a

copy to CO. CMS reviews the over expenditure for adherence to contract provisions on

prior notice and abatement and other considerations and, where appropriate, issues a

revised NOBA that enables the contractor to draw additional funds.

The incidences of such end-of-year over-expenditures are few since notification is

necessary more than 60 days prior to the end of the FY if either CMS or the contractor

expects that the budgeted amounts are not sufficient to cover administrative costs.

250.2 - Cumulative Quarterly Distribution - (Rev. 1, 08-30-02)

A1-1261.2, B1-4261.2

This indicates the approved cumulative quarterly distribution for PM and/or MIP. Funds

should not be drawn in excess of the lesser of the quarterly distribution or the contractor's

expenses. The quarterly distributions for PM and MIP are separate.

The PM and MIP distributions and costs must be treated separately in determining the

amounts to draw for administrative expenses for each.

250.3 - Certifying Official - (Rev. 1, 08-30-02)

A1-1261.3, B1-4261.3

This signature indicates approval of the NOBA by the delegated RO official. In many

cases the contractor will not receive a signed copy of the NOBA. The RO will "release"

the NOBA within CAFM II, which signifies certification and will include the official's

name and title. An explanation of the nature of the NOBA will be included in the

Remarks section on this certification page. The RO will notify the contractor via phone or

e-mail when the NOBA has been certified and released in CAFM II.

Click here to view exhibit of Schedule of Net Hours Available, Form CMS-3258