To: District Superintendents, Superintendents and Executive Directors of Approved Preschool Programs Serving Students with Disabilities, School District and County Officials
From: Harold Matott
Subject: Tuition Rate Setting Methodology for 2018-19 Tuition Rates for Preschool Students with Disabilities
Date: July 19, 2018
Section I: Rate Setting Methodology – Special Class and Special Class Integrated Setting Programs
The 2018-19 tuition rate setting methodology for Special Class and Special Class in an Integrated Setting programs includes two new additions which will provide additional flexibility in how maximum tuition rates are calculated and targets increased funding to address teacher turnover. Please see the Total Cost Screen item (D.) and the Excessive Teacher Turnover Prevention Program item (F.) of this section for more information. In addition, Special Class in an Integrated Setting programs are provided with an additional new benefit of using the actual revenue earned, rather than an expected amount based on child care subsidy rates, when applying a revenue offset to their reported expenses. This measure will more accurately reflect the funding received by these programs and prevent rate reductions based on revenue that is not actually realized.
The following methodology components may be used in whole or in part, pursuant to Section 200.9 of the Regulations of the Commissioner, to establish the 2018-19 tuition rates for approved preschool special class and special class in an integrated setting programs. Generally, the 2018-19 tuition rates for programs that were in operation during the 2016-17 school year are based on reported 2016-17 financial data. Any approved appeal items from prior and current school years will be reviewed and, if appropriate, included in the calculation of the 2018-19 rate. As in previous years, each provider’s financial data is reviewed by staff of the Rate Setting Unit (RSU) and any necessary adjustments are made in accordance with Section 200.9 of the Commissioner’s Regulations and the Reimbursable Cost Manual (RCM), as applicable. This process is completed prior to the application of cost screens. The basic components of the tuition rate setting methodology and various factors used to calculate the 2018-19 tuition rates for special class and special class integrated programs are described below:
A. Prospective Trend Factor
A 2.0 percent trend factor is approved for the 2018-19 school year for preschool special class and special class in an integrated setting programs. A factor of 4.04 percent which represents the compounding of the approved prospective trend factors of 2.0 percent for the 2017-18 and 2.0 percent for the 2018-19 school years is applied to reimbursable 2016-17 base year direct care and non-direct care costs, excluding interest, depreciation, and expenses related to one-time waivers as appropriate.
B. Non-direct Care Cost Parameter
The non-direct care cost parameter limits the amount of non-direct care costs that will be reimbursed through the tuition rate to 30 percent of the reimbursable costs after adjustments. The reimbursable limit for non-direct care costs can be calculated by multiplying adjusted direct care costs by .4286, which is the ratio of 30/70 for non-direct care/direct care costs.
C. Applied Revenues
Applied revenues will be subtracted from total adjusted costs after the application of the non-direct care cost parameter. Provided that, NYSED will initiate rulemaking to amend the revenue offset provision of 8 NYCRR §200.9 (f)(2)(x)(b) to reflect that 2018-19 Special Class in an Integrated Setting program tuition rates will be reduced by the actual revenues earned for students without disabilities for the tuition rate year.
D. Total Cost Screen
1. The hold-harmless component of the total cost screen is not applied in the calculation of 2018-19 tuition rates for preschool programs.
2. The 2018-19 prospective tuition rate per diem cannot exceed the greater of:
A. The 2016-17 reconciliation per diem rate plus 4.04 percent.
B. The 2017-18 prospective per diem rate plus 2.0 percent.
The Department reserves the right to apply the 2016-17 reconciliation per diem rate plus 4.04 percent if the application of the 2017-18 prospective per diem rate plus 2.0 percent would result in inappropriate benefit, as determined by SED, under the specific circumstances applicable at the time the reconciliation rate is being calculated.
3. The 2018-19 reconciliation tuition rate per diem cannot exceed the greater of:
A. The 2017-18 reconciliation per diem rate plus 2.0 percent.
B. The 2018-19 prospective per diem rate.
The Department reserves the right to apply the 2017-18 reconciliation per diem rate plus 2.0 percent if the application of the 2018-19 prospective per diem rate would result in inappropriate benefit, as determined by SED, under the specific circumstances applicable at the time the reconciliation rate is being calculated.
E. 2018-19 Reconciliation Process
The reconciliation process, as defined in Section 200.9 (f)(3)(iii) of the Commissioner’s Regulations, will be applied in the reconciliation of the 2018-19 school year costs for all approved Special Class and Special Class Integrated Setting programs in accordance with the total cost screen provisions outlined in (D.3) of this section.
F. Excessive Teacher Turnover Prevention Program
Funding for the Excessive Teacher Turnover Prevention Program (ETTPP) for eligible school programs will be directly incorporated into the 2018-19 prospective tuition rates for qualifying providers. The distribution of the funding will be provided to eligible programs whose average teacher salary are below the median salary provided for similarly qualified teachers in public schools in the region in which their agency is located. The allocation to each qualifying program will be calculated based on the number of weighted full-time equivalent (FTE) calculated as follows:
1. The total number of weighted FTE will be determined by multiplying the actual number of FTE teachers (based on a three-year average of historical data submitted in program’s cost reports) providing classroom instruction in each program by:
a. A factor of 2.0 for those programs where average teacher salaries are 50% or less of those in public schools located in the same geographic region;
b. A factor of 1.5 for those programs where average teacher salaries are greater than 50% but 75% or less than those in public schools located in the same geographic region; or
c. A factor of 1.0 for those programs where average teacher salaries are greater than 75% but 100% or less than those in public schools located in the same geographic region.
Programs where average teacher salaries equal or exceed regional 50th percentile special education teacher salaries are not eligible for a rate adjustment. Distribution of $8 million for school-age and preschool programs will be calculated for 2018-19.
Each program receiving ETTPP funding will be notified of the total dollar amount added to their prospective rate. A Chief Administrator’s Certification statement will be needed to attest to the total dollar amount of funding spent to supplement teacher compensation with an assurance statement that this amount will continue to be used for this purpose. Upon reconciliation, if a program is impacted by a total cost screen, a total cost screen waiver up to the amount of the total cost screen will be applied as part of approved methodology equal to the allowable 2018-19 ETTPP expenditure as certified by the program. Upon review of such reports, annual cost reports, or as a result of field audit, if SED determines funds were not spent in compliance with stated purpose of supplemental teacher compensation, such expenditures will be recouped via a reconciliation rate or a final audit rate.
G. Special Class Programs – Tuition Rates for Initial Years of Operation Pursuant to Section 200.9 (f)(2)(viii) of the Regulations of the Commissioner of Education.
1. Special class programs that operated initially in 2016-17 will have the prospective and reconciliation tuition rates for 2018-19 established using the general rate setting methodology detailed in this memo based on required financial statements and reports.
2. Special class programs that operated initially in 2017-18 will have the prospective tuition rate for 2018-19 established at the 2017-18 prospective tuition rate with no trend applied. For 2018-19 reconciliation, the program’s per diem rate will be limited to the lower of: (i) the per diem based on the school’s reimbursable costs; or (ii) the higher of the 2017-18 reconciliation per diem rate plus 2.0 percent trend factor or the 2018-19 prospective per diem rate.
3. Special class programs that are seeking initial approval in 2018-19 will receive prospective tuition rates based on the 2018-19 regional weighted average per diem tuition rate. For 2018-19 reconciliation, the program’s per diem rate will be held to the lower of the per diem based on the school’s reimbursable costs or the 2018-19 regional weighted average per diem rate.
Notwithstanding the above provisions, approved private special class programs will be subject to the provisions of Section 200.9 (f)(2)(viii) of the Commissioner’s Regulations. This section of the Regulations states that if a new approved private special class program’s student enrollment is not equal to or greater than the minimum number required in Section 200.7 (c)(3), then that program shall continue to receive the regional weighted average per diem tuition rate for the rate year until such time that the program's actual base year enrollment equals or exceeds the required minimum number of full-time-equivalent students.
“Regional weighted average per diem” used in the 2018-19 reconciliation process is the weighted average per diem developed on a regional basis for full and half-day segregated special class programs and can be found in Attachment I. Separate regional weighted average per diem tuition rates shall be used for preschool half-day and full-day programs. The 2018-19 rates equal the approved 2017-18 rates plus 2.0% growth.
H. Preschool Special Class in an Integrated Setting Programs - Tuition Rates for Initial Years of Operation
1. Special class in an integrated setting programs that operated in 2016-17 with both preschool students with disabilities and students without disabilities who are enrolled in the same program, will receive 2018-19 prospective and reconciliation tuition rates using the general rate setting methodology detailed in this memo based on 2016-17 financial statements and reports. After application of the non-direct care cost parameter, reported expenditures are reduced by the actual revenues earned for students without disabilities. The total cost screen is then applied to the resulting expenditures to determine the total reimbursable costs for the preschool students with disabilities.
2. Special class in an integrated setting programs that operated initially in 2017-18 will have the prospective tuition rate for 2018-19 established at the 2017-18 prospective rate with no trend applied. For 2018-19 reconciliation, the program’s per diem rate will be limited to the lower of: (i) the per diem based on the school’s reimbursable costs; or (ii) the higher of the 2017-18 reconciliation per diem rate plus 2.0 percent trend factor or the 2018-19 prospective per diem rate.
3. Special class in an integrated setting programs seeking initial approval in 2018-19 will have the established 2018-19 reimbursement methodology applied to the submitted budgetary data. Related statistical and historical data for other approved programs operated by a provider or similar programs operated by other providers may also be used to establish rates for these newly approved programs. For 2018-19 reconciliation, the program’s per diem rate will be limited to the lower of the per diem based on the school’s reimbursable costs or the 2018-19 prospective budget-based tuition rate.
I. Interim Rates for Special Class and Special Class Integrated Programs
For the 2018-19 school year, interim rates will be issued to approved programs, if warranted. These rates are in effect until the prospective 2018-19 rates are calculated and approved. The interim rates are intended to provide cash flow until the 2018-19 prospective tuition rates, using the above methodology, are processed. Interim rates will be posted at the Rate Setting Unit website at the following:
https://www.oms.nysed.gov/rsu/Rates_Methodology/Rates/home.html
J. 1:1 Aide Add-On Rates
The 2018-19 regional weighted average 1:1 aide add-on rates are listed in Attachment II. These rates will be added to the approved tuition rate(s) of the program in which the student is enrolled. The 2018-19 1:1 aide add-on rates are not subject to reconciliation. The 2018-19 rates are based on 2017-18 regional rates plus 2.0% growth.
K. Minimum Wage
2018-19 tuition rates may include additional funding for compliance with the Minimum Wage Act (Article 19 of the New York State Labor Law), which was signed into law on April 4, 2016. Approved private programs serving school-age students with disabilities (chapter 853 schools), Special Act School Districts, State Supported Schools (4201 schools), and approved private preschool special class and special class integrated programs will be responsible for submitting data to the Rate Setting Unit which will be used to calculate the maximum amount of funding that may be requested by programs.
***Information for how to submit a request for funding for compliance with the Minimum Wage Act for the 2017-18 prospective rate and the 2016-17 and 2017-18 reconciliation rates is published on the Rate Setting webpage: https://www.oms.nysed.gov/rsu/Announcements/
Information for how to submit a request for funding for compliance with the Minimum Wage Act for 2018-19 prospective and reconciliation rates will be published under a separate memorandum.
Section II. Rate Setting Methodology – Special Education Itinerant Services
The following methodology components may be used in whole or in part, pursuant to Section 200.9 of the Regulations of the Commissioner, to establish the 2018-19 tuition rates for approved programs providing special education itinerant services (SEIS) to preschool students with disabilities, as defined in Section 200.16 (i)(3)(ii) of the Regulations.
Rates for SEIS programs are established as half-hour rates and billing by programs to municipalities must be done in half-hour units of time. Pursuant to Chapter 56 of the Laws of 2014, and section 200.9(f)(2)(ix)(d) of the Regulations of the Commissioner, 2018-19 SEIS rates are to be paid for each unit of service delivered, not to exceed the recommendations for such services in the student’s individualized education program (IEP). See Policy on Make-Up Services of Missed Special Education Itinerant Services (SEIS) Sessions in the October 2015 Field Advisory:
Pursuant to Chapter 56 of the Laws of 2015, the 2018-19 SEIS rates represent the fourth year of a four-year phase-in to regional tuition rates based on average actual costs. The regions designated for the SEIS regional rates are the labor force regions of New York State, which are used in the calculation of the 2012 regional cost index, and are listed in Attachment III. Each SEIS program’s regional rate is based on the region in which its program administrative office is located.
The 2018-19 SEIS individual rates continues the final year phase-in of the SEIS regional rates implemented in 2015-16. The SEIS individual regional rates calculated in 2015-16 were calculated by dividing the 2011-12 reimbursable expenditures within a region, after adjustments, by 93 percent of the 2011-12 mandated billable units of service within the corresponding region. 2018-19 SEIS individual rates represent “Year Four Phase-In Rates” with the same regional rate being issued for all providers whose administration offices are located within the same geographic region. The specific components and formulas used for the calculation of the SEIS individual regional rates are described in detail in the 2015-16 SEIS methodology memo:
A. 2018-19 Regional Rates for Individual Sessions
The approved SEIS individual regional rates are as follows:
|
Region |
SEIS Regional Rates |
|
Long Island/New York City |
$46 |
|
Hudson Valley |
$40 |
|
Capital District |
$36 |
|
North Country |
$32 |
|
Mohawk Valley/Central/Southern Tier |
$33 |
|
Finger Lakes |
$34 |
|
Western |
$32 |
B. 2018-19 Regional Rates for Group Sessions
In instances where the IEP indicates that the student may receive group SEIS, the SEIS provider is to bill for each session at the applicable regional group rate corresponding to the number of students in attendance in the group when the service is provided. For example, if SEIS is delivered to a group of three students, the program may bill at the applicable group regional rate for three students in attendance, prorated equally among the students in attendance, and then bill to the appropriate municipality based on each student’s municipality of residence. If SEIS is delivered to a group of two students, the applicable group regional rate for two students in attendance is to be prorated equally among the two students and then billed to the appropriate municipality based on each student’s municipality of residence. In the case where SEIS is provided to one student, the provider is to bill at the group regional rate for one student in attendance, which is equivalent to the SEIS regional rate for the region where the provider’s administration offices are located.
The approved SEIS group regional rates are as follows:
|
Region |
Group Regional Rate One Student in Attendance |
Group Regional Rate Two Students in Attendance |
Group Regional Rate Three or More Students in Attendance |
|
Long Island/New York City |
$46 |
$68 |
$90 |
|
Hudson Valley |
$40 |
$58 |
$78 |
|
Capital District |
$36 |
$52 |
$69 |
|
North Country |
$32 |
$48 |
$60 |
|
Mohawk Valley/Central/Southern Tier |
$33 |
$50 |
$63 |
|
Finger Lakes |
$34 |
$50 |
$66 |
|
Western |
$32 |
$48 |
$63 |
The group SEIS session regional rates as listed above are effective for all SEIS programs in 2018-19
C. Programs Granted Initial Approval in 2018-19
SEIS programs granted initial approval in 2018-19 will have their individual and group SEIS 2018-19 rate established at the SEIS regional rate applicable to the region in which their administration offices are located.
D. 2018-19 Reconciliation Process
The 2018-19 SEIS regional rates will not be subject to reconciliation.
E. Rates Based on Audit
The 2018-19 SEIS regional rates shall be subject to adjustment based on a final audit of actual program expenses, revenues, enrollment and other relevant program information. The final audit report shall be used to establish tuition rates based on audit, which shall not exceed a provider’s 2018-19 SEIS regional rate. The rates based on audit shall be developed by the Commissioner and certified by the Director of the Budget. Upon the certification of rates based on audit, any overpayment will be reimbursed to the appropriate municipality by the approved program, or any underpayment will be paid by the appropriate municipality to the approved program. Any overpayment or underpayment to the appropriate municipality by the state shall be adjusted accordingly upon certification of the rates based on audit.
Section III. Multidisciplinary Evaluation Programs
A. Preschool Evaluation Rates
The 2018-19 school year Evaluation Rates are listed in Attachment IV.
Section IV. Teacher Certification Funds
A. Teacher Certification Funds for 2018-19
Instructions and required forms for applying for these monies are available on the Rate Setting Unit website. Please note that related costs and revenues are to be reported in a separate program cost center, and not in any rate program cost center. These monies are not to be used to increase base year costs for future rate setting.
Section V. Reimbursable Cost Manual and Rate Setting Unit Contact Information
The July 2018 Reimbursable Cost Manual (RCM), which defines reimbursable costs for the 2018-19 school year, will be made available at the Rate Setting Unit’s website: https://www.oms.nysed.gov/rsu/Manuals_Forms/Manuals/RCM/home.html
Inquiries regarding 2018-19 tuition rates should be directed to the RSU staff accountant who is assigned to process the school’s 2016-17 financial reports. RSU staff telephone numbers and e-mail addresses are available at the Rate Setting Unit’s Website at https://www.oms.nysed.gov/rsu/Contact_Us/employees.html
2016-17 RSU staff school assignments are available at the Rate Setting Unit’s Website at:
https://www.oms.nysed.gov/rsu/Contact_Us/SchoolAssignments.html
The general RSU office information is listed below:
New York State Education Department
Rate Setting Unit
Room 302 Education Building
89 Washington Avenue
Albany, New York 12234
Phone: (518) 474-3227
Fax: (518) 486-3606
Enclosures:
· Attachment I: 2018-19 Regional Weighted Average Per Diem Tuition Rates
· Attachment II: 2018-19 Regional Weighted Average 1:1 Aide Add-On Rates
· Attachment III: 2012 Regional Cost Index – Revised Department of Labor Regions
· Attachment IV: 2018-19 Rates Multidisciplinary Evaluation Programs