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Manage 1099

Accounts Payable Management

Description

The Manage 1099 business process describes how the State Medicaid Agency (SMA) handles IRS 1099 forms including preparation, maintenance, and corrections. Any payment or adjustment in payment made to a single Social Security Number (SSN) or federal Tax ID Number (TIN) impacts the business process. The Manage 1099 business process receives payment and/or recoupment information from the Process Claim business process or from the Manage Accounts Payable Information business process. The Manage 1099 business process may also receive requests for additional copies of a specific IRS 1099 form or receive notification of an error or a needed correction. The business process provides additional requested copies via the Manage Provider Communication or Manage Contractor Communication business processes. Staff researches error notifications and requests for corrections for validity and generate a corrected 1099 or a brief explanation of findings.

Business Process Template

Trigger events
Environment-based
  • Request from a provider, state or federal agency.
  • End of the calendar year. State transition Trigger Events:
  • Receive information from Process Claim or Manage Accounts Payable Information business processes indicating payments and/or recoupments.
  • Receive information from Manage Provider Information business process for modifications.
  • Receive information from Manage Contractor Information business process for modifications.
Interaction-based

None published

Results
  • Updated and/or corrected 1099 information (i.e., form, file, paper, or Electronic Data Interchange (EDI) sent to providers, contractors, Internal Revenue Service (IRS), and other state agencies.
  • Tracking information as needed for measuring performance and business activity monitoring.
Business process steps
  • Preparation/Maintenance
  • 1. START: Receive claim payment and adjustment information from Process Claim or Manage Accounts Payable Information business process.
  • 2. Match TIN or SSN.
  • 3. Update cumulative totals by applying all payments and recoupments, including those from cost settlements and manual checks. a. Prepare report of those not getting a 1099. b. Produce master report of 1099s. c. Review all 1099 reports for accuracy.
  • 4. Prepare 1099 at close of calendar year.
  • 5. Send 1099 to appropriate providers and contractors prior to January 31.
  • 6. END: Submit 1099 information to Internal Revenue Service (IRS).
  • Alternate Path - Additional Requests
  • 1. START: Receive request for additional 1099(s).
  • 2. Agency logs request.
  • 3. Verify identity of requesting entity.
  • 4. Re-generate requested 1099(s).
  • 5. Send 1099 to requesting entity.
  • 6. END: Agency logs 1099(s) sent.
  • Alternate Path - Corrections
  • 1. START: Receive notification of error or modification request from Manage Provider Information or Manage Contractor Information business processes
  • 2. Agency logs request.
  • 3. Verify identity of requesting entity.
  • 4. Research error or update request.
  • 5. If no error found, send alert to notify requesting entity of findings. END: Business process stops.
  • 6. If error found valid, make necessary modifications.
  • 7. Prepare corrected or updated 1099.
  • 8. Agency logs 1099 sent.
  • 9. Send corrected 1099 to affected parties.
  • 10. END: Submit corrected 1099 information to Internal Revenue Service (IRS).
Predecessor processes
Successor processes
Shared data
  • Financial data store including accounts payable information
  • Claim data store including payment information
  • Contractor data store including demographics and 1099 information
  • Provider data store including demographics and 1099 information 1099 Information sent to Internal Revenue Service (IRS)
Constraints

The SMA will follow IRS regulations regarding 1099 requirements.

Failures
  • Invalid format or media used.
Performance measures
  • Time to complete process: e.g., Real Time response = within __ seconds, Batch Response = within __hours
  • Accuracy of decisions = ___%
  • Consistency of decisions and disposition = ___%
  • Error rate = __% or less

Source: CMS MITA 3.0 Business Process Template, Financial Management BPT.pdf, pages 29-32.

Business Capability Model (10 questions)

Each capability question defines five maturity levels, from Level 1 through Level 5.

Business Capability Descriptions

Is the process primarily manual or automatic?
  1. LEVEL 1The process consists primarily of manual paper-based activity to accomplish tasks.
  2. LEVEL 2SMA uses a mix of manual and automatic processes to accomplish tasks.
  3. LEVEL 3SMA automates process to the full extent possible within the intrastate.
  4. LEVEL 4SMA automates process to the full extent possible across the interstate.
  5. LEVEL 5SMA automates process to the full extent possible across the nation.
Does the State Medicaid Agency use standards in the process?
  1. LEVEL 1SMA focuses on meeting compliance thresholds for state and federal regulations using state-specific standards.
  2. LEVEL 2SMA applies a mix of HIPAA and state-specific standards.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, and other nationally recognized standards for intrastate exchange of information.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and other nationally recognized standards for clinical and interstate information exchange.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national exchange of information.
How does the State Medicaid Agency collaborate with other agencies or entities in performing the process?
  1. LEVEL 1Very little collaboration occurs with other agencies to standardize information exchange or business tasks. Programs do not share information; SMA may create multiple 1099s by different payment systems for the same provider.
  2. LEVEL 2SMA collaborates with other agencies and entities to adopt HIPAA standards and Electronic Data Interchange (EDI) transactions. SMA has agreements for common processes to achieve economies of scale and increase coordination.
  3. LEVEL 3SMA collaborates with other intrastate agencies and entities to adopt national standards, and to develop and share reusable business services.
  4. LEVEL 4SMA collaborates with other interstate agencies and entities to adopt national standards, and to develop and share reusable processes including clinical information.
  5. LEVEL 5SMA collaborates with agencies and entities for national (and international) interoperability improvements that maximize automation of routine operations.

Business Capability Quality: Timeliness of Process

How timely is the end-to-end process?
  1. LEVEL 1Process meets threshold or mandated requirements for timeliness (i.e., the process achieves results within the time specified by law or regulation).
  2. LEVEL 2Process timeliness improves through use of automation. Timeliness exceeds legal requirements.
  3. LEVEL 3Timeliness improves via state and federal collaboration, use of information sharing, standards, and regional information exchange hubs. Timeliness exceeds Level 2.
  4. LEVEL 4Information is available in near real time. Processes that use clinical information result in immediate action, response, and results. SMA has interstate interoperability, which further improves timeliness over Level 3.
  5. LEVEL 5Information is available in real time. Processes improve further through connectivity with other States and with federal agencies. Most processes execute at the point of service. Results are almost immediate.

Business Capability Quality: Data Access and Accuracy

How accurate is the information in the process?
  1. LEVEL 1Use of direct data entry for information collection is manually intensive and susceptible to inconsistent or incorrect information. Stakeholders are unable to rely on information for decision-making.
  2. LEVEL 2HIPAA standard transactions improve accuracy of information but the decision-making process may be erroneous or misleading. Accuracy is higher than at Level 1.
  3. LEVEL 3Automation of information collection increases the reliability of SMA’s internal information. External sources of information use MITA Framework and industry standards for information exchange. Decision-making is automatic using standardized business rules definitions. Accuracy rating is at 99% or higher.
  4. LEVEL 4Automation of information collection increases the reliability of SMA’s internal and external sources of information. SMA adopts MITA Framework and industry standards for information exchange with interstate agencies. Decision-making is automatic using regional standardized business rules definitions. Accuracy rating is at 99% or higher.
  5. LEVEL 5SMA adopts MITA Framework and industry standards for information exchange with national agencies. Decision-making is automatic using national standardized business rules definitions. Accuracy rating is at 99% or higher.
How accessible is the information in the process?
  1. LEVEL 1SMA stores information in disparate systems including paper storage and obtains information manually.
  2. LEVEL 2SMA stores information in disparate systems, but automation and HIPAA standards increase accessibility over Level 1.
  3. LEVEL 3SMA obtains information easily and exchanges with intrastate agencies and entities based on MITA Framework and industry standards. Accessibility is greater than Level 2.
  4. LEVEL 4SMA obtains information easily and exchanges with interstate agencies and entities. Accessibility is greater than Level 3.
  5. LEVEL 5SMA obtains information easily and exchanges with national agencies and entities. Accessibility is greater than Level 4.

Business Capability Quality: Cost Effectiveness

What is the cost of the process compared to the benefits of its results?
  1. LEVEL 1High relative cost due to low number of automatic, standardized tasks.
  2. LEVEL 2Automation improves process and allows focus on exception resolution, improving cost effectiveness ratio over Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, and other nationally recognized standards further improving cost effectiveness ratio over Level 2.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and other nationally recognized standards for interstate information exchange. SMA increases cost effectiveness ratio over Level 3.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national (and international) information exchange. SMA increases cost effectiveness ratio over level 4.

Business Capability Quality: Effort to Perform; Efficiency

How efficient is the process?
  1. LEVEL 1Process is labor intensive. There is wasted effort or expense to accomplish tasks. Process meets minimum state process guidelines and SMA performance standards. Activity peaks at year-end when 1099 production is scheduled. Efficiency is low.
  2. LEVEL 2Automation and state standards increase productivity. Efficiency is higher than Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving efficiency to 95% or higher.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving efficiency to 98% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving efficiency to 98% or higher.

Business Capability Quality: Accuracy of Process Results

How accurate are the results of the process?
  1. LEVEL 1Manual processes result in greater opportunity for human error. The process meets SMA goals for numbers of 1099s produced on schedule, but manual processes may lead to inaccuracies. Accuracy is low.
  2. LEVEL 2Automation and standardized business rules definitions reduce error and improve accuracy above Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving accuracy to 90% or higher.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving accuracy to 98% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving accuracy to 98% or higher.

Business Capability Quality: Utility or Value to Stakeholders

Does the business process satisfy stakeholders?
  1. LEVEL 1Stakeholders lack confidence in information negatively affecting stakeholder satisfaction with the process.
  2. LEVEL 2Automation and standardization provides clear and useful information. Stakeholder satisfaction is greater than Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving stakeholder satisfaction to 90% or higher. SMA uses survey or questionnaire for information collection.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving stakeholder satisfaction to 95% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving stakeholder satisfaction to 98% or higher.

Source: CMS MITA 3.0 Business Capability Model, Financial Management BCM.pdf, pages 86-92.

Other Financial Management processes

Formulate BudgetGenerate Financial ReportManage Accounts Payable DisbursementManage Accounts Payable InformationManage Accounts Receivable FundsManage Accounts Receivable InformationManage Budget InformationManage Capitation PaymentManage Contractor PaymentManage Cost SettlementManage Drug RebateManage Estate RecoveryManage FundManage Incentive PaymentManage Member Financial ParticipationManage Provider RecoupmentManage TPL RecoveryPrepare Member Premium Invoice