MES Certification Navigator
FM

Manage Accounts Payable Information

Accounts Payable Management

Description

The Manage Accounts Payable Information business process is responsible for all operational aspects of money the State Medicaid Agency (SMA) pays. Activities in this business process comply with Cash Management Act, Governmental Accounting Standards Board (GASB) standards and Generally Accepted Accounting Principles (GAAP). Activities included in this process may be: • Periodic reconciliations between the State Medicaid Enterprise and the system(s) that performs accounting functions. • Assignment of account coding to transactions processed in the State Medicaid Enterprise. • Processing accounts payable invoices created in the State Medicaid Enterprise. • Processing accounts payable invoices created in state accounting system (gross adjustments or other service payments not processed through the State Medicaid Enterprise, and administrative payables). • Loading accounts payable information (warrant number, date, etc.) into the State Medicaid Enterprise. • Managing canceled/voided/stale dated warrants. • Performing payroll activities. • Disbursing federal administrative costs reimbursements to other entities. • Responding to inquiries concerning accounting activities. NOTE: States use a variety of solutions including outsourcing to another department or use of a Commercial-Off-the-Shelf (COTS) package.

Business Process Template

Trigger events
Environment-based
  • Receive request for payment.
  • Receive accounts payable information.
Interaction-based

None published

Results
  • Modification to accounts payable information.
  • Alert sent to disburse payment to Manage Accounts Payment Disbursement business process.
  • If applicable, alert sent to Establish Compliance Incident business process for a member’s, provider’s or contractor’s continued failure to make payment.
  • Tracking information as needed for measuring performance and business activity monitoring.
Business process steps
  • 1. START: Receive request and information to make payment.
  • 2. Perform requested function.
  • 3. Produce report.
  • 4. If applicable, alert sent to Establish Compliance Incident business process for continued failure to make obligated payments.
  • 5. Produce financial transaction.
  • 6. Update financial information.
  • 7. Send alert to make payment to Manage Accounts Payment Disbursement business process.
  • 8. END: Send response to requested function.
Predecessor processes
Successor processes
Shared data
  • State accounting system accounts payable information
  • Financial data store including payroll, general ledger, and accounts payable information
  • Claims data store including payment information
  • Contractor data store including contract information
  • Member data store including demographics information
  • Provider data store including provider network information
Constraints

The SMA will follow federal and state-specific accounting and financial requirements.

Failures
  • Failure to account for expenditures in accordance with GAAP can result in disallowance of federal funding participation.
Performance measures
  • Time to complete the process: e.g., Real Time response = within ___seconds, Batch Response = within ___ hours
  • Accuracy with which rules are applied =___%
  • Consistency with which rules are applied=___%
  • Error rate =___% or less

Source: CMS MITA 3.0 Business Process Template, Financial Management BPT.pdf, pages 24-26.

Business Capability Model (12 questions)

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

Business Capability Descriptions

How integrated is the process?
  1. LEVEL 1There is little coordination between financial accounting requests for accounts payables. There is limited information exchange between Medicaid Management Information System (MMIS) and state accounting system.
  2. LEVEL 2There is regular communication and coordination between state accounting system and SMA.
  3. LEVEL 3SMA fully integrates the process to the extent possible across the intrastate. SMA uses standardized Generally Accepted Accounting Principles (GAAP).
  4. LEVEL 4SMA fully integrates the process to the extent possible across the interstate.
  5. LEVEL 5SMA fully integrates the process to the extent possible across the nation.
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 interstate information exchange.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national exchange of information.
What is the source of the information?
  1. LEVEL 1The source of the information is a mix of manual updates, data entry, Optical Character Recognition (OCR), and proprietary Electronic Data Interchange (EDI) edit, audit and payment processing.
  2. LEVEL 2Data sources are increasingly HIPAA Accredited Standards Committee (ASC) X12 837 Health Care Claim. SMA uses a mix of HIPAA compliant and proprietary business rules for encounter and waiver program payment history information
  3. LEVEL 3Claims attachments are compliant with the ASC X12 275 Patient Information. Premium payment information is compliant with the HIPAA ASC X12 834 Benefit Enrollment and Maintenance, in addition to MITA Framework, industry standards.
  4. LEVEL 4SMA adopts MITA Framework and industry standards across the interstate.
  5. LEVEL 5SMA adopts MITA Framework and industry standards, across the nation.
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.
  2. LEVEL 2SMA collaborates with other agencies and entities to adopt HIPAA standards and EDI transactions.
  3. LEVEL 3SMA collaborates with other intrastate agencies and entities to adopt national standards, and to develop and share services.
  4. LEVEL 4SMA collaborates with other interstate agencies and entities to adopt national standards, and to develop and share including clinical information.
  5. LEVEL 5SMA collaborates with agencies and entities for national (and international) interoperability improvements that 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. 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. 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 74-81.

Other Financial Management processes

Formulate BudgetGenerate Financial ReportManage 1099Manage Accounts Payable DisbursementManage 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