Cost Report Season
Cost Report Season is Here
Jan. through March is often referred to as cost report season to TASB School Medicaid Services and Local Education Agencies (LEAs) in Texas that participate in the School Health and Related Services (SHARS) Medicaid reimbursement program. Each year, LEAs that participate in the SHARS program are required to submit a cost report for the previous federal fiscal year (FFY). Cost reports are generally opened to eligible LEAs on the first business day of the calendar year and are due by Apr. 1.
The purpose of the SHARS cost report is to calculate an LEA’s total Medicaid allowable costs. Ultimately, the federal portion of the LEA’s total Medicaid allowable costs will be reconciled against the interim payments the LEA has received for services billed for Medicaid reimbursement. The difference between the two figures is paid/recouped from the LEA. For most LEAs, the settlement payment issued for their SHARS cost report accounts for a majority of their annual SHARS revenue, and in some cases, accounts for a sizeable portion of their district’s total annual funding. As a result, submitting an accurate, complete, and audit proof cost report is more important now than ever.
FFY 2024 SHARS cost reports opened on Jan. 2 and are due by Apr. 1. Apr. may seem far away, but preparing is key when it comes to cost reporting.
Cost report Preparers must attend training annually to be authorized to submit an LEA’s cost data. SHARS Cost Report Training is hosted virtually by the Health and Human Services Commission (HHSC) Provider Finance Department. HHSC offers six training opportunities each year. Preparing an LEA’s SHARS cost report is not a simple undertaking. It’s recommended that Preparers attend training early to maximize their preparation time.
After attending cost report training and being assigned the Preparer role by an LEA for an open cost report, the Preparers can begin the reporting process. Preparing a cost report is a complicated process that requires the contributions and collaboration of a variety of LEA departments and staff, as well as the LEA’s SHARS billing vendor. As a SHARS Medicaid billing and cost reporting vendor, TASB School Medicaid Services oversees the cost reporting process for many LEAs across the state.
To develop a more accurate and audit-safe cost report, the TASB School Medicaid Services team recommends that Preparers:
- Include only Medicaid enrolled students with Individualized Education Program (IEP) that require a direct medical service for whom the LEA has obtained parental consent, and billed and received payment for during the reporting period in the numerator of the IEP Ratio.
- Complete the SHARS FFY 2024 Compliance Risk Assessment form and upload it to Step 2 of the cost report. Doing this will potentially avoid more in-depth reviews of LEA supporting documentation.
- Upload supporting documentation such as trip logs, general ledger information, and contractor invoices to the cost report Upload Center. Label and name files so that they can easily be associated with the section of the cost report they support.
- Format cost report files in a manner that will easily allow an auditor to reconcile reported costs.
- Note that direct medical staff costs are position-specific, not person-specific. If multiple people occupied a position at various times in the reporting period, the costs reported for the position should be the aggregate total of anyone who filled the position.
- LEAs that are members of a cooperative or shared services arrangement must provide a copy of the cooperative and shared service arrangements (SSA) allocation methodology to substantiate the calculation of shared costs reported in the LEA’s cost report.
Cost report season can be stressful but the TASB School Medicaid Services team is here for you. We stay up to date on all things SHARS and can provide guidance and support when needed. Additionally, throughout cost report season we host multiple webinars, hold office hours, and share original SHARS resources to help LEAs prepare their cost reports. If your LEA has any cost report related questions, please contact us at shars@tasb.org for assistance.

Dario Avila
Dario Avila serves as a senior consultant for the TASB School Medicaid Services. Avila’s primary task is to make School Health and Related Services (SHARS) easier for TASB members. He regularly meets with districts across the state to update members on SHARS policy changes, address billing concerns, share best practices, and connect members with SHARS resources and services available from TASB. Prior to joining TASB in 2019, he oversaw the day-to-day operations of the SHARS and Medicaid Administrative Claiming (MAC) programs for the Texas Health and Human Services Commission.
Avila is a University of Texas graduate. He is a past president and former member of the board of directors of the National Alliance for Medicaid in Education.