Final_RFP_746_2500000254_1_SO_FORM.PDF

Document ID: RFP 746 2500000254 Page: 1

Commonwealth of Kentucky

SOLICITATION

Modification: No Version #:

TITLE: Financial Mgmt. for PDS in 1915(c)HCBS Waiver Programs C5684

Date Issued:

04/01/2026 Record Date:

03/26/2026

Solicitation Closes Date:

05/06/2026 Time:

14:00

Solicitation No:

RFP 746 2500000254

Online Bidding Prohibited: No For Information Call:

Arta Halili 502-564-3498

Bid Receiving Location:

Bid Receiving

See Terms & Conditions for Bid Submission Instructions

Other KY

Vendor Customer Number:

Vendor Name:

Phone Number:

Fax Number:

Email Address:

Ordering

Address:

City, State, Zip:

Contact Name:

Contact Email:

Contact Phone Number:

Payment

Address:

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Ownership Type

__ Sole Proprietorship __ Partnership __ Corporation __ Other_________________________

SIGNATURE OF AUTHORIZED AGENT IS REQUIRED UNLESS RESPONSE

IS SUBMITTED ELECTRONICALLY. FAILURE TO SIGN SHALL RENDER

THE BID INVALID.

Signature X_________________________________________ FEIN#____________________ Date____________

All offers subject to all terms and conditions contained in this solicitation.

Document ID: RFP 746 2500000254 Page: 2

Line Items

Commodity Group: Default

Line CL Description Quantity UOM Unit Cost Line Total or Contract Amnt

1 Financial Mgmt. for PDS

Comm Code Comm Description Manufacturer Model # Manuf Part #

948PS PSC-HEALTH RELATED SERVICES (FOR

HUMAN SERVICES SEE CLASS 95

Extended Description The selected vendor will provide Financial Management Services (FMS) for the Participant-Directed Service (PDS) model of the following five (5) 1915(c) Medicaid waiver programs in the Commonwealth of Kentucky: (1) Acquired Brain Injury (ABI), (2) Acquired Brain Injury - Long Term Care (ABI-LTC), (3) Home and Community Based Waiver (HCB), (4) Michelle P. Waiver (MPW), (5) Supports for Community Living (SCL).

FMS's include, but are not limited to, electronic visit verification, processing claims/goods and services invoices, processing background checks for PDS Employees, issuing paychecks to PDS Employees, assisting participants, representatives, or employees with tax forms, documentation, and reports needed by State or Federal agencies, and financial reports for the participant and Case Manager.

Shipping Information

Billing Information CHFS DMS Division of Fiscal Management dms.invoice@ky.gov 275 E Main Street 6W-C

Frankfort KY 40621

Document ID: RFP 746 2500000254 Page: 3

Submission Checklist

The following items will be required to be submitted with bid:

Item Technical Proposal Cost Proposal Oral Presentation, if necessary.

Revised February 2026

PROPOSAL SUBMISSION CHECKLIST

The Vendor MUST include the following with the proposal submission.

If the items highlighted below are not submitted with the proposal submission, the Commonwealth MUST deem the proposal non-responsive and SHALL NOT consider for award.

All other items MUST be submitted prior to award.

_____ SIGNED AND COMPLETED SOLICITATION –Section(s) 8.00 and 8.10 of this RFP (not required if submitting electronically)

_____ *PROPOSED SOLUTION (TECHNICAL) UNDER SEALED COVER AND BY CLOSING DATE --

Section(s) 8.00 and 8.10 of this RFP

_____ *PROPOSED SOLUTION (COST) UNDER SEALED COVER AND BY CLOSING DATE --

Section(s) 8.00 and 8.10 of this RFP

_____ TRANSMITTAL LETTER – Section 8.20 of this RFP

_____ PROOF OF REGISTRATION WITH SECRETARY OF STATE BY A FOREIGN ENTITY

(Section 8.00 of the Personal Service Contract Terms and Conditions of this RFP)

_____ REQUIRED AFFIDAVIT(S) – Section 8.20 of this RFP

*The Commonwealth defines SEALED as “a closure that must be broken to be opened and that thus reveals tampering” (Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/seal

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2500000254 Final Financial Mgmt. for PDS in 1915(c)HCBS Waiver Programs C5684

Total Pages: 58 https://www.merriam-webster.com/dictionary/seal

REQUEST FOR PROPOSAL

FOR

PERSONAL SERVICE CONTRACT

Cabinet for Health and Family Services (CHFS) Department for Medicaid Services Financial Mgmt for PDS in 1915(c) HCBS Waiver Programs

RFP 746 2500000254

This document constitutes a Request for Proposals for a Personal Service Contract from qualified individuals and organizations to furnish those services as described herein for the Commonwealth of Kentucky, Cabinet for Health and Family Services, Department for Medicaid Services.

Offerors are advised that any personal service contract resulting from this RFP must comply with all applicable provisions of KRS 45A and KRS 12.210 prior to becoming effective.

A contract, based on this RFP, may or may not be awarded. Any contract award from this RFP is invalid until properly approved and executed by the Finance and Administration Cabinet and filed with the Legislative Research Commission, Government Contract Review Committee.

1.00 Purpose and Background

The Kentucky Cabinet for Health and Family Services offers program participants enrolled in five (5) of the Commonwealth’s seven (7) 1915(c) home and community-based services (HCBS) waiver programs the opportunity to self-direct their services through participant-directed services (PDS).

The PDS service delivery model is available in the following 1915(c) HCBS waiver programs:

1. Acquired Brain Injury (ABI) – for individuals ages 18 and older who need assistance to re-enter the community after a brain injury.

2. Acquired Brain Injury Long Term Care (ABI-LTC) – for individuals ages 18 and older who need long-term support to live in the community after a brain injury.

3. Home and Community Based (HCB) – for individuals ages 65 or older and/or individuals with a physical disability.

4. Michelle P. Waiver (MPW) – for individuals with intellectual or developmental disabilities.

5. Supports for Community Living (SCL) – for individuals with intellectual or developmental disabilities.

There are approximately 15,640 individuals using the PDS service delivery model across the five (5) HCBS waivers that offer it as an option. Department for Medicaid Services (DMS) anticipates that the number of individuals who elect the PDS service delivery model will continue to grow, amplifying the need for efficient and effective Financial Management Agency (FMA) support to wrap-around each participant. The current distribution of participants electing to use the PDS model, as of February 28, 2026, is as follows:

Waiver Program Number of PDS

Participants Total Number of

Waiver Participants

% of Waiver Participants Self- Directing Services

ABI 60 289 21%

ABI-LTC 143 460 31%

HCB 6,616 17,009 39%

MPW 8,115 10,649 76%

SCL 706 5,138 14%

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The PDS model of service delivery allows for a high level of autonomy and self-determination for the individuals served by the five (5) waiver programs listed above. PDS participants have approved person-centered service plans that allow them to directly employ service providers of their choice (PDS employees). Financial Management Services (FMS) delivered by a provider agency are required for waiver participants who choose to self-direct their services per 42 CFR § 441.740(e)(2). FMAs serve a vital role in managing the PDS service delivery model, assisting participants (PDS Employers) in hiring and paying service providers and providing accurate accounting and tracking of services provided. Kentucky’s waiver programs leverage an open model Electronic Visit Verification (EVV) technology to monitor when providers deliver services and track the tasks completed for each waiver participant.

The system tracks when a service is delivered, how long the service is delivered for, and automatically populates a provider time record to prepare Medicaid payment systems for reimbursement. EVV reduces potential challenges related to time record submission timelines, time record completion guideline compliance, and proof of service delivery.

FMS for waiver participants who direct their own services is currently provided by local Community Mental Health Centers (CMHCs) and Kentucky's Area Development Districts (ADDs); however, DMS is transitioning to a single statewide vendor to administer FMS. FMS provider responsibilities include, but are not limited to:

1. Processing and maintaining time records.

2. Processing and maintaining PDS Employee background checks.

3. Processing and maintaining PDS Employee drug screening and tuberculosis (TB) risk assessment records.

4. Processing and maintaining any other applicable PDS Employee training records.

5. Issuing paychecks to PDS Employees.

6. Providing information and assistance services to participants.

7. Assisting participants, representatives, or employees with tax forms, documentation, and reports needed by state or federal agencies.

8. Creating and delivering service usage reports for the participant, their Case Manager/Case Supervisor, and CHFS.

DMS intends to contract with one (1) Vendor, to provide FMS across the Commonwealth for each 1915(c) waiver program. This will support the Commonwealth’s ability to effectively wrap-around the PDS service delivery model for each waiver. The contracted Vendor will deliver FMS to:

1. All current or future waiver participants who choose to elect the PDS service delivery model.

2 The approximately 343 current waiver participants who are on interest lists to elect the PDS model of service delivery.

The contracted Vendor will work with DMS to begin delivering services on August 1, 2026. This start date may be delayed at the DMS’s discretion in the event of contracting delays, lack of Vendor readiness to provide services, or any other reason described by DMS.

1.01-Definitions and Acronyms

1. “ADD” is an abbreviation for Area Development District. There are 15 ADDs in Kentucky, each representing a multi-county planning district. Each of the Commonwealth’s 120 counties falls within an ADD region. ADDs are partnerships that provide resources to local counties and cities in their regions.

2. “Approved Person-Centered Service Plan” or “PCSP” refers to the individualized service plan developed for a participant based on that participant’s unique needs and circumstances as assessed through a functional needs assessment.

3. “Beneficiary” means a Medicaid beneficiary who is enrolled in a waiver program and elects the PDS service model.

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4. “CHFS” is the abbreviation for the Cabinet for Health and Family Services. “CHFS” and “The Cabinet” mean the state agency that administers programs to promote the mental and physical health of Kentuckians and supports families, including the Medicaid program.

5. “CMS” is an abbreviation for the Centers for Medicare and Medicaid Services, a federal agency that administers Medicare, Medicaid, and other health programs.

6. “Case Manager” means an individual chosen by a PDS participant from an agency designated by the Department to:

A. Provide training, technical assistance, and support to a PDS participant; and B. Assist a PDS participant in any other aspects of PDS.

7. “Community Mental Health Center” (CMHC) means a center that provides a comprehensive range of accessible and coordinated mental health services, including direct or indirect mental health through Kentucky's 14 regional Mental Health/Intellectual Disability boards. Regional Boards are private, nonprofit organizations established to serve residents of a designated multicounty region.

8. “Covered services and supports” means those services and supports that are eligible for reimbursement under the PDS service delivery model and that are approved for the PDS participant following a functional needs assessment and pursuant to a person-centered plan.

9. “DAIL" is an abbreviation for the Kentucky Department for Aging and Independent Living. DAIL is the operating agency of the Home and Community Based waiver and Participant Directed Services.

10. “DBHDID" is an abbreviation for the Kentucky Department for Behavioral Health, Developmental, and Intellectual Disabilities.

11. "DMS" is the abbreviation for the Department for Medicaid Services. “DMS” and “Department” mean the Kentucky Department for Medicaid Services, which is responsible for administering the state's Medicaid program.

12 “Employee(s)” means an individual who is employed by a PDS participant to provide home and community support services.

13. “Employer” means an individual, by law, who hires an employee or provides support. The employer is responsible for directing the work of their employee to the degree necessary to meet the Beneficiary’s need for assistance with activities of daily living. For the purposes of this Request for Proposal, the employer refers to the individual conducting the hiring and/or management of a waiver participant’s services and supports staff and benefits. Either the waiver participant or a participant-selected representative may fulfill these responsibilities.

14. “Electronic Visit Verification (EVV)” means a process that uses electronic means to verify care provider visits for personal or home health care services. The information collected during visits includes, but is not limited to: the date of service provided; the start time and end time for service provided; the type of health care service performed;

the location of the service provided and information about the service provider. For information on the waiver services that require the use of EVV, please refer to the DMS website here: https://www.chfs.ky.gov/agencies/dms/ Pages/default.aspx.

15. “FMA” Financial Management Agency

16. “Legacy Vendors” means the Vendors currently providing FMS services to PDS participants. These Vendors include the ADDs and the CMHCs.

17. “MPPA” is the abbreviation for the Medicaid Partner Portal Application, a web-based system used by Kentucky Medicaid providers for enrollment, maintenance, and revalidation.

18. “MWMA” is the abbreviation for the Medicaid Waiver Management Application, which is used to enroll individuals in Kentucky Medicaid 1915(c) HCBS waiver programs and manage their care.

19. “Participant-directed service” (PDS) means an option established by KRS 205.5606 within the home and community-based services waivers that allows a waiver participant to:

A. Assist with the design of their service delivery program;

B. Choose their providers of services; and C. Direct the delivery of services to meet their needs.

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Total Pages: 58 https://www.chfs.ky.gov/agencies/dms/Pages/default.aspx https://www.chfs.ky.gov/agencies/dms/Pages/default.aspx

20. “PDS participant” refers to an individual enrolled in a 1915(c) HCBS waiver that has chosen to self-direct services through the PDS service delivery model.

21. “PDS representative” means an uncompensated individual designated by the PDS participant to assist in managing the participant’s covered services and supports.

22. “PMI” Project Management Institute

23. “PMF” Project Management Framework

24.” PMP” Project Management Plan

25. “PMIS” Project Management Information System

26. "Person-centered service plan” (PCSP) means a written individualized plan of 1915(c) waiver-funded services developed in accordance with the participant’s wants, assessed needs, and preferences, which may include a transition plan to more intense or less intense level of services.

27. “RTM” Requirements Traceability Matrix

28. “Time record” refers to any submitted time sheets or electronic visit verification data related to the recording of service delivery for the purposes of service utilization tracking and payment for services rendered.

29. ”TMF” Technology Management Framework

2.00 Scope of Work

1. Demonstrate the capacity to serve PDS participants and future PDS participants across Kentucky.

a. Provide clearly defined, comprehensive FMS to PDS participants, their representatives, and families, by empowering them with the ability to pursue lifelong opportunities and facilitate personal choices.

b. Establish strong relationships, ensure open and transparent communications, and meet or exceed performance standards and service level agreements as demonstrated through performance metrics.

c. Provide clarity, guidance, and understanding to PDS participants and others as authorized by DMS and collaborate with case managers to assist in managing PDS participants’ individual service plans.

d. Provide quality, responsive customer service that contributes to autonomy and empowerment for PDS participants.

e. Ensure smooth and seamless transactions between PDS participants and employees without service disruption.

f. Ensure that no interest list or wait list is maintained for PDS participants seeking FMS. The Vendor must maintain sufficient capacity to accept and serve all current and future PDS participants without delay.

2. Perform the following functions for the five (5) 1915(c) Medicaid waiver programs (ABI, ABI-LTC, HCB, MPW, and SCL) as well as any additional 1915(c) Medicaid waiver programs that may be developed and implemented in the future:

A. Administrative Coordination and Compliance

i. Coordinate with DMS to enroll as a Kentucky Medicaid Provider.

ii. Maintain coordination with DMS or its designee(s) for provider and PDS participant enrollment processes.

iii. Institute a process for ensuring employers and employees comply with the requirements of Section 12006 of the 21st Century Cures Act (“Cures Act”) regarding Electronic Visit Verification

(EVV).

iv. Develop and maintain a comprehensive policies and procedures manual related to the tasks associated with performing financial management functions, overlapping communication and data transmission tasks, and internal controls for monitoring the completion of all financial

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2500000254 Final Financial Mgmt. for PDS in 1915(c)HCBS Waiver management tasks. The manual should be reviewed annually and updated as policies and procedures change, as approved by DMS or its designee(s).

v. Maintain a file of all developed or generated Corrective Action Plans, Notices of Termination, and documentation from which a correction or termination is determined as it pertains to the Vendor’s scope of work for DMS or its designee(s).

vi. Develop formal documentation of internal processes that conform to the process in Appendix E; Participant Direction of Services of each approved waiver application for voluntary or involuntary termination of PDS participants from PDS services. Ensure that their policy confirms termination with DMS or its designee(s) prior to stopping processing employee timesheets for that participant.

vii. Receive approval from DMS or its designee(s) for all materials, case manager letters, training materials/activities, and Vendor-produced forms prior to implementation or dissemination.

viii. Attend meetings (e.g., conference call, videoconference) as requested by DMS or its designee(s).

ix. Sign a Business Associate Agreement and require that all staff using or manipulating Kentucky Medicaid data sign confidentiality statement CHFS 219V - Contractor Privacy and Security of Protected Health, Confidential and Sensitive Information Agreement Form for External Vendors regarding the privacy and security of the data. See Attachment G -BAA Sample.

B. Financial Management Activities, EVV, and Reporting

i. Demonstrate the financial capability to perform the services required for all current and future PDS participants across Kentucky.

ii. Use a payroll system that addresses and fulfills all related tax obligations and provides payment to PDS employees at least on a semi-monthly basis in accordance with services in the approved person-centered service plan (PCSP). The proposed system should also process and track reimbursements to Vendors and PDS participants for non-payroll type services such as Goods and Services as noted in the approved PCSP.

iii. Process payments for goods, services, home adaptations/environmental modifications, and any other participant-directed benefits (e.g., Supported Employment, Transportation, Shared Living, Vehicle Adaptation, Community Guide, etc.) for participants directing their own services.

Payments for any goods, services, home activities/environmental modifications, and other participant-directed benefits should be processed if item(s) appear on the PCSP, the funds are within established service limits, and the acquisition cost of the item or service is documented through a receipt or a written cost estimate from the supplier. The Vendor will also process payments for PDS employee background checks, drug screenings, and tuberculosis screenings in accordance with the approved CMS HCBS Waiver application.

iv. Disburse payments to PDS employees within the interval selected by the Vendor, but at a minimum of twice a month. Produce payment to the employee within two weeks of the date when a completed time record is submitted to the Vendor.

v. Implement a user-friendly electronic system that connects with the State’s EVV system for payroll and payment processes. This should include procedures to correct payments issued for service hours that exceed the maximum approved for PDS participants. The Vendor has the option to use the CHFS EVV solution or implement their own proposed EVV system. If a vendor chooses to use their own EVV solution, they should provide documentation demonstrating that their system meets the requirements established by DMS, even through updates during the Contract term.

vi. Implement a process, approved by DMS, for retroactive payments and corrections that are due to late EVV visit submissions, payroll, and EVV system errors, or other issues identified by DMS or its designee(s).

vii. Implement a process to reimburse DMS for incorrect payments or penalties incurred from incorrect payments made due to the fault of the Vendor and/or the Vendor’s policies and systems.

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2500000254 Final Financial Mgmt. for PDS in 1915(c)HCBS Waiver

viii. Use an accounting and information system to effectively track and report service usage.

ix. Design and maintain a backup time recording and time record submission process in the case of an EVV outage or emergency affecting EVV use.

x. Develop and distribute a consumer-friendly service usage report or dashboard to the PDS participant and Case Manager on a monthly basis or upon request from the DMS. Reports should be made available to DMS or its designee(s) upon request. Reports will detail the employee and employer tax withholdings as well as service utilization.

xi. Develop and implement communication strategies to share monthly reports or dashboards with PDS participants and Case Managers through an online platform and ensure that the participant’s service usage relative to the total approved services in their PCSP is clearly communicated.

xii. Notify the Case Manager when the Vendor identifies concerns impacting the PDS participant and/or their service delivery. Examples of events requiring communication between the Vendor and Case Manager may include but are not limited to:

a. The PDS participant has exceeded a service limit.

b. The PDS participant's spending to date indicates that the PDS participant will exceed a service limit by the end of the plan year.

c. The PDS participant has not followed a Corrective Action Plan.

d. The PDS participant and/or PDS Employee is non-compliant with EVV use requirements and guidelines.

e. Payment processing is stopped or delayed.

f. The PDS participant has not received any services for an extended period of time.

C. Training, Support, and Quality Assurance

i. Develop, implement, and maintain orientation and skills trainings on all applicable financial management services components for PDS participants, participant representatives, and employees. Collaborate with CHFS’ current learning management system (LMS) for delivering and managing all training programs. All training materials will be stored in CHFS’ LMS and should adhere to industry accessibility standards.

ii. Ensure that the policies and procedures manual developed for and approved by DMS or its designee(s) is available to all financial management staff and is incorporated into all training programs for new and existing financial management staff.

iii. Provide technical assistance to Case Managers enrolling employers to ensure that forms detailed in Section 2.02 of this RFP are completed correctly and prior to service delivery, and assist with follow-up when necessary. The onboarding process of a new employee should not exceed thirty (30) days unless the FMA can attest to delays outside of their control (e.g., incomplete employee packet submission, the submission of inaccurate employee information, or delays by the employee to submit required background checks).

iv. Be available to participants and Cabinet staff through a communication method proposed by the Vendor and approved by DMS or its designee(s) (e.g., toll-free phone, email, text, chat) Monday through Friday (excluding Federal holidays) from 8:00 a.m. to 6:00 p.m. Eastern Time at a minimum. The Vendor should demonstrate staffing capacity and/or plans to handle the demand from Kentucky’s PDS participants, as well as accommodate their language needs.

v. Create and negotiate in good faith a service level agreement with DMS or its designee(s) no more than 15 days after the contract award that outlines how the Vendor will respond to PDS participant and Cabinet staff inquiries, concerns, and support requests and the timeline for doing so.

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vi. Submit monthly reports on Vendor capacity to address PDS participant and DMS and its designee(s) staff inquiries and support requests that include, at a minimum, reporting measures detailed in Section 2.04 of this RFP.

vii. Provide a user-friendly online platform for PDS participants and Case Managers to view forms, reports, and information pertaining to training and service usage. The Vendor should be flexible in adapting a platform to interface with providers’ electronic case management systems (i.e., the Kentucky Medicaid Waiver Management Application). This includes training on how to use the platform.

viii. Maintain quality assurance measures and internal controls, including functional disaster recovery plans and procedures to prevent, detect, and report fraud and abuse that align with state and federal regulations. Assist with an annual assessment conducted by DMS or its designee(s) to measure satisfaction levels among Case Managers and PDS participants.

D. Vendor Transition Planning

Start of Contract Transition/Turnover

i. Develop a comprehensive plan for transitioning financial management services (e.g., gap analysis, timelines for each phase of the plan, stakeholder engagement, trainings, data management, and transfer) from the existing Kentucky providers to the new Vendor.

ii. Submit the draft of the transition plan for approval to DMS or its designee(s) prior to work beginning. Information shared between Vendors during transitions should include, but is not limited to:

a. Participant Medicaid ID

b. Participant Name

c. Participant Date of Birth

d. Participant Mailing Address

e. Participant Social Security Number

f. Year-to-date (YTD) service usage

g. Associated Employer Name (Participant or Representative, as applicable)

h. Federal Employer Identification Number

i. Kentucky Employer Identification Number

j. State Unemployment Tax Account Information

k. Employee Name

l. Employee Mailing Address

m. Employee Social Security Number

n. Copies of current employee Form W-4, including allowances, and Form I-9

o. Family Relationship with Employer Information

p. Live-in Caregiver Status Information

q. Criminal Background Check Status and Results

r. Current State Unemployment Tax Rate

s. YTD Federal Income Taxable Wages

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t. YTD Federal Income Tax Withholding

u. YTD Social Security Taxable Wages

v. YTD Social Security Tax Paid

w. YTD Medicare Taxable Wages

x. YTD Medicare Tax Paid

y. YTD Federal Unemployment Taxable Wages

z. YTD Federal Unemployment Tax Paid

aa. YTD State Income Taxable Wages

ab. YTD State Income Tax Paid

ac. YTD State Unemployment Taxable Wages

ad. YTD State Unemployment Tax Paid

ae. YTD Local Taxes Paid, as applicable.

End of Contract Transition/Turnover

i. At the end of the Contract, provide any turnover assistance reasonably necessary to enable DMS or its designee(s) to effectively close out the Contract and ensure a smooth transition.

F. Legal Compliance and Liability Management

i. Develop and maintain policies, procedures, and internal controls to effectively perform responsibilities and limit risk of liability due to non-compliance with state and federal tax, labor, immigration, workers’ compensation, and PDS program regulations.

ii. Obtain and process fees for PDS employees related to drug testing, tuberculosis screening, and criminal background checks through the Kentucky Applicant Registry and Employment Screening (KARES). If KARES is not used, pre-employment background investigations should be conducted using all four (4) of the following:

a. Administrative Office of the Courts (AOC),

b. Kentucky Child Abuse and Neglect (CAN),

c. Caregiver Misconduct Registry, and the

d. Nurse Aide Abuse Registry.

Employee screening should comply with the regulations outlined in ABI Waiver Application, ABI LTC Waiver Application, HCB Waiver Application, MPW Waiver Application, SCL Waiver Application, and all other HCBS waiver program regulations. Ensure all participant Case Managers receive copies of all results for the participant’s employee(s).

iii. Assume all liability for any losses, penalties, or obligations resulting from errors and/or omissions, including fraud and abuse on the part of the Vendor, its employees, its representatives, or subcontractors. These liabilities include, but are not limited to:

a. Any damages or losses suffered by a federal or Commonwealth Agency due to negligence on the part of the Vendor.

b. Any cost to a federal or Commonwealth Agency caused by fraud or abuse by the Vendor, its representatives, or subcontractors.

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Total Pages: 58 https://www.chfs.ky.gov/agencies/dms/dca/waivers/waiverapplicationABI.pdf https://www.chfs.ky.gov/agencies/dms/dca/waivers/waiverapplicationABILTC.pdf https://www.chfs.ky.gov/agencies/dms/dca/waivers/waiverapplicationHCB.pdf https://www.chfs.ky.gov/agencies/dms/dca/waivers/waiverapplicationMPW.pdf https://www.chfs.ky.gov/agencies/dms/dca/waivers/waiverapplicationSCL.pdf https://www.chfs.ky.gov/agencies/dms/dca/waivers/waiverapplicationSCL.pdf

iv. The Vendor recognizes that time and accuracy are essential to the performance of this Contract. The Commonwealth and the Vendor agree that if the Vendor fails to meet any specified requirements outlined in Section 2.08, Deliverables and Artifact Management, it may cause damages to the Commonwealth. Furthermore, it may be impractical and extremely difficult to determine the exact damages the Commonwealth will incur due to such failures. Therefore, the parties agree that the Commonwealth will deduct liquidated damages from the Vendor’s next invoice—regardless of whether that invoice pertains to the affected task. The established amount for liquidated damages is five hundred dollars ($500) for each business day (Monday through Friday, excluding State or Federal holidays) that a requirement is not met by the Vendor or payment is not received by a PDS employee due to the Vendor's failure to meet the time standards specified in this RFP.

v. The parties further agree that in the event of any failure by the Vendor to meet the requirements outlined in this RFP, the Vendor should pay any amount due under this section as liquidated damages and not a penalty. Amounts due to the Commonwealth as liquidated damages will be offset against any monies due the Vendor pursuant to the contract.

2.01-Goals and Objectives

The primary goals and objectives are:

1. Provide high-performing, efficient, and effective FMS supports statewide to the Commonwealth’s waiver participants who elect the PDS service delivery model.

2. Develop, implement, and maintain FMA requirements and standards that fully align with all CMS regulatory guidance for FMS delivery as described in Attachment B or in the link below: https://acrobat.adobe.com/id/ urn:aaid:sc:VA6C2:719ff1b8-dbee-4687-bfec-2c6acfdc08df

3. Establish and maintain high-quality business relationships with all parties as defined by the Stakeholder Analysis that promote accountability, effective communication, and high-quality service delivery and coordination.

4. Develop, implement, and maintain clearly defined and well-established roles consistent with the principles of PDS, for the FMA, the PDS participant, and the Employee. This will serve as guidance to the FMAs on how they may assist and empower the PDS participant.

2.02-Employer Enrollment Requirements

1. Develop and maintain a DMS-approved Employer Welcome Packet in the employer’s primary language containing information about the FMA, employer responsibilities, and required state and federal forms to become an employer and use Fiscal/Employer Agent services. The welcome packet should include at a minimum:

A. IRS Form SS-4, Application for Employer Identification Number;

B. IRS Form 2678, Employer/Payer Appointment of Agent;

C. KY New Business Registration form;

D. KY Form 20A100, Declaration of Representative;

E. KY Unemployment Insurance Power of Attorney;

F. Enrollment information for Workers’ Compensation policy;

G. An agreement between the FMA and the employer stating the roles and responsibilities of each party;

H. An information sheet about the employer’s responsibilities at the federal, state, and local level.

2. Distribute and file all employer and employee paperwork electronically with federal, state, and local agencies as applicable, in accordance with agency requirements.

3. Maintain an established Federal Employer Identification Number (FEIN) for filing IRS Form 2678 and depositing and filing federal taxes and federal unemployment insurance in aggregate on behalf of PDS participants.

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2500000254 Final Financial Mgmt. for PDS in 1915(c)HCBS Waiver Programs C5684

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4. Obtain a FEIN for each PDS participant and maintain copies of the IRS EIN notification letter CP575 and the filed Form SS-4, Application for an Employer Identification Number. Copies should be maintained in each PDS participant’s file.

5. Prepare and file a signed IRS Form 2678, Employer/Payer Appointment of Agent with the IRS for each PDS participant it represents. When the LTR-1997C notice confirming the appointment is received from the IRS, maintain copies of both in each PDS participant’s file.

6. Develop a DMS-approved policy, procedure, and internal control to revoke the IRS Form 2678 for each individual agent when the agent no longer represents the individual and all tax forms have been filed.

7. Develop and maintain a DMS-approved system to register new employers in the Commonwealth of Kentucky.

8. Include a description of the Vendor and contact information if a reporting agent will be used for payroll.

9. Develop a DMS-approved system and procedure for obtaining the appropriate State employer registration numbers for unemployment tax filing through the Kentucky Office of Unemployment Insurance and payment purposes for all individuals it represents.

10. Develop a DMS-approved system to close an employer account with the Kentucky Office of Unemployment Insurance once all tax forms have been filed if a PDS participant chooses to disenroll in the waivers’ PDS service delivery model.

11. Develop a DMS-approved policy, procedure, and internal control to review updated regulations and tax forms and integrate all relevant information into the Employer Welcome Packet, set up new accounts as applicable, and establish a process for closing additional accounts when needed.

12. Develop and maintain DMS-approved internal controls to monitor the preparation, distribution, collection, and processing of information contained in the individual enrollment packet.

13. Develop a DMS-approved robust communications strategy to promote consistent and reliable information dissemination and encourage open channels of communication with PDS participants.

14. Report to DMS or its designee concerns of fraud, waste, and/or abuse by program employees, including supporting documentation.

15. Report concerns of abuse, neglect, or exploitation of program participants and their employees to the CHFS Kentucky Child/Adult Protective Services Reporting System by using the online reporting system at WebReferral, calling the Child/Adult Abuse Hotline at 1-877-597-2331, or calling 1-866-231-0003, Option 3, between 8:00 a.m.

to 4:30 p.m. Eastern Time, Monday through Friday.

2.03-Employee Enrollment Requirements

1. Develop and maintain a DMS-approved Employee Welcome Packet in the employee’s primary language containing information about the FMA, employer, and employee responsibilities. The welcome packet should include at a minimum:

a. IRS Form W-4, Employee’s Withholding Certificate

b. USCIS Form I-9, Employment Eligibility Verification

c. A contract between the FMA, employer, and employee outlining each party's roles and responsibilities.

d. Worker Information Sheet, including family relationship to the employer as applicable.

e. Direct Deposit Request Form

f. Pay Schedule

g. EVV Information Sheet

h. Employer/Employee Agreement

2. Develop or adapt a DMS-approved electronic system and document a procedure to prepare, collect, process, and maintain the Employee Welcome Packet forms and required human resources documentation from workers

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2500000254 Final Financial Mgmt. for PDS in 1915(c)HCBS Waiver Programs C5684 https://prd.webapps.chfs.ky.gov/reportabuse/home.aspx to process worker payroll. This system and procedure should include communication to the worker within five (5) business days of receipt if required documentation is missing or unacceptable, and notice to the employer and Case Manager if the process will delay the start of employment.

2.04-Reporting Requirements

In accordance with the Ensuring Access to Medicaid Services Final Rule, which is aimed at improving access, quality, and transparency in HCBS programs, the Vendor should:

1. Provide electronic monthly reports to DMS or its designee(s) broken down by case management agency.

2. Propose (and provide a draft sample of) the intended format for the Vendor’s monthly report (in DMS-approved format) with narrative adding context to reported measures as necessary and as approved by DMS or its designee(s).

3. Submit quarterly report data in a standardized, editable Excel format as approved by DMS or its designee(s).

Provide a draft sample of the standardized, editable Excel quarterly report.

4. Include the following information at a minimum in quarterly reports:

a. Monthly reports as specified in the scope of work.

b. Number of tax packets issued to participants.

c. Number of forms/tax packets returned by participants.

d. Number of days to resolve errors related to the Employee’s documentation of time worked. Number of payments pending by reason (e.g., timesheet not received timely, timesheet not corrected timely) within a timeframe set by the FMA policies and procedures.

e. Monthly billing and service utilization.

f. Wait times for customer support/quality assurance calls.

g. Turnaround time for resolution of customer inquiries and support requests.

h. Number of days to onboard Employers.

i. Number of days to onboard Employers’ new Employees.

j. Processing times for onboarding new Employees and administration of background checks.

k. Number of business days from submittal of Provider’s invoice to payment.

l. Number of business days expired before responding to inquiries from DMS or its designee(s).

m. Payment times for invoices to agency Vendors and paychecks to individual Employees.

n. The number of complaints from Employers, Employees and/or Vendors, complaint resolution details, and length of time to resolve each complaint.

o. Number of substantiated complaints from Employers, Employees and/or Vendors.

p. FMA compliance and progress towards continuous improvement plans (which are collaboratively created by FMAs and agencies) and the included goals.

q. Accuracy of real-time service usage tracking.

2.05-Record Retention

1. Maintain all pertinent financial and accounting records and evidence pertaining to the contract in accordance with generally accepted principles of accounting and as required by Kentucky Law. Upon request, access to these records should be granted to state or federal entities or any of their duly authorized representatives.

2. Financial and accounting records should be made available, upon request, to the Commonwealth of Kentucky’s designee(s) at any time during the contract period and any extension.

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2500000254 Final Financial Mgmt. for PDS in 1915(c)HCBS Waiver

Fiscal reports regarding services provided, service records regarding services provided, and critical incident reports should be retained:

A. At least seven (7) years from the date that a covered service is provided, unless the participant is a minor; or

B. If the participant is a minor, the longer of:

i. Three (3) years after the participant reaches the age of majority under state law; or

ii. Seven (7) years from the date that a covered service is provided.

If, pursuant to 42 C.F.R. 431.17, the Secretary of the United States Department of Health and Human Services requires a longer document retention period than the period referenced in this section, the period established by the Secretary shall govern.

2.06-Pricing and Payment Requirements

Payments will be issued to the Vendor within 30 days after receipt of an approved invoice and itemized statement of activities. No payment will be made until DMS approves the reimbursement and reporting. No advance payments will be made before a service is provided.

The Vendor should submit invoices setting forth the hours worked and the expenses for which reimbursement is sought on a monthly basis.

Invoices for payment should be submitted electronically to DMS.Invoice@ky.gov. Invoices must be submitted no later than thirty (30) calendar days after completion of the service period.

Payment is conditioned upon receipt of appropriate, accurate, and timely invoices. Invoices should contain two parts:

1. Legislative Research Commission’s Government Contract Review Committee Invoice Form; and

2. Supporting documentation.

Invoices that do not meet the requirements above will be rejected and sent back to the Vendor for re-invoicing.

Any and all services, monitoring of such services, and billing and invoicing for such services should be in compliance with all applicable state and federal statutes, regulations, policies, and procedures governing the Medicaid Program, including but not limited to the State Plan. No payment should be made for non-compliant services or invoices.

2.07-Monitoring Requirements - State and Federal

1. Maintain a full-time/real-time electronic monitoring system and secure through such system a full and detailed knowledge of published, proposed, and final state and federal statutes, rules and regulations, Medicaid manual updates, and court cases and precedents pertinent to discharging the duties as a Medicaid financial management Vendor.

2. Be responsible for the faithful performance of the Agreement and have internal monitoring procedures and processes in place to promote compliance.

3. Cooperate with DMS or its designee(s) in any monitoring, tracking and/or auditing activity, which may require Vendor and any of its Subcontractors to report progress and problems, provide documents, allow random inspections of its facilities, participate in scheduled meetings and monitoring, respond to requests for corrective action plans, and provide management reports, which relate directly to the work performed for this contract as requested by DMS or its designee(s). Participation in these activities should be at no additional cost to DMS or its designee(s)S.

2.08-Deliverables and Artifact Management

The Vendor accepts that the descriptions and minimum deliverables in this RFP do not include every possible duty, task, or intermediate deliverable necessary for success, and will supplement as needed to achieve success in this program. The Vendor should propose suggested revisions if such items more closely conform to the Vendor’s software lifecycle or if additional deliverables are necessary to fulfill DMS RFP goals and requirements in a cost-effective manner. The Vendor also understands and agrees that any perceived lack of detail in a specific area

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2500000254 Final Financial Mgmt. for PDS in 1915(c)HCBS Waiver does not indicate that the Vendor has no duties in that area. The deliverables outlined in Section 2.08 should be considered only a minimum for project success. The Commonwealth reserves the right to revise the deliverables in Section 2.08 prior to contract award. DMS may request additional minimum deliverables if deemed necessary. The Vendor may propose additional deliverables when necessary to achieve program success:

1. Provide financial management services for the participants served through Kentucky's 1915(c) ABI, ABI-LTC, HCB, MPW, and SCL waivers, as well as any additional 1915(c) Medicaid waiver programs that may be developed and implemented in the future.

2. Pay employees correctly and at a minimum of two (2) times per month as agreed upon between DMS or its designee(s) and Vendor.

3. Maintain an electronic file of all state and federal documents completed or filed on behalf of each PDS participant and their employees. Include any correspondence regarding these forms.

4. Maintain an electronic file of data, with backup, on service usage, payroll, and EVV, as well as the corresponding checks issued to the employees.

5. Develop formal documentation of service delivery procedures specific to Kentucky’s regulatory standards, waiver programs, and contract with the Vendor. Any changes to approved procedures can be made at any time with approval from DMS or its designee(s).

6. Fulfill the DMS RFP goals and requirements in a cost-effective manner. This includes all intermediate steps, deliverables, or processes reasonably necessary to achieve the desired outcome described in each section of the RFP.

7. The Proposal should describe a Deliverable and Artifact Management approach that ensures the expectations, requirements, and content associated with each deliverable and artifact are clearly defined and agreed to in advance of actual delivery.

8. Use Deliverable Expectation Documents (DED), which should be submitted to and reviewed with the Commonwealth to ensure the Vendor and DMS or its designee(s) have an understanding of the expectations, requirements, and content of each deliverable. The DEDs should be designed to maximize the ability for deliverables to serve as artifacts for required federal reviews. All deliverables and artifacts are subject to review and approval by DMS or its designee(s). The review cycle begin time required for each deliverable/artifact should be established between the Vendor and DMS or its designee(s) in the course of finalizing the Master Program Schedule, and further reviewed and revised during the DED review cycles. The Vendor should be responsible for managing the schedule for all deliverables/artifacts under the scope of work, including the schedule for submission, review, updates, and final approval.

9. All deliverables and artifacts should be maintained by the Vendor in the DMS-provided document repository. Be responsible for maintaining all document libraries, structures and document versions, and for ensuring all documents are accessible to Commonwealth staff within the agreed deliverable schedule.

10. Manage the deliverable review process utilizing the 10-5-5 Review Cycle.

A. 10-5-5 Review Cycle Definition:

i. Once the deliverable is submitted, DMS or its designee(s) and the Vendor review the deliverable according to the timeframe established in the Project Work Plan (generally 10 business days).

Then DMS or its designee(s) provides either a written approval of the deliverable or a written statement identifying the deficiencies preventing approval.

ii. The Vendor has five (5) business days from the date it receives the notice of deficiencies to complete the corrective action.

iii. The Commonwealth reviews the corrected deliverable and notifies the Vendor in writing of acceptance or rejection within five (5) business days.

iv. If there's no resolution in the first review period, the deliverable will undergo an additional 5-3-3 review cycle. If there is still no agreement after the second review cycle, a meeting will be required to resolve outstanding disputes.

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2500000254 Final Financial Mgmt. for PDS in 1915(c)HCBS Waiver

v. The official sign-off and approval are completed once the review cycle has been completed and all comments have been resolved.

B. If the Vendor deviates from this process without DMS approval, penalties may be imposed. See Attachment F - Penalties.

C. Submit and receive approval by DMS or its designee(s) for all deliverables, templates, plans, schedules, and other documents, as defined by CHFS during the initial planning phase.

i. Ensure the delivered project work plan includes tasks for the delivery, review, and approval of all deliverables…