HITECH Budget Calculations

The APD budget calculations are a little complicated, mostly because of the repetition. This document will walk through all the numbers that are calculated, where they come from, and where they show up in the eAPD.

User inputs

All of the calculations begin with user inputs.

APD Key Personnel

The first budget-related user input is related to APD Key Personnel. If key personnel have costs that are directly attributable to the program addressed by the APD, their costs are entered for each federal fiscal year covered by the APD.

Example: For an APD that covers FFY 2020 and 2021, the state has identified three key personnel. Only two of them have costs that are directly attributable to the APD.

Key Personnel	Has costs	FFY 2020 costs	FFY 2021 costs
Amber	Yes	$24,000	$32,000
Bob	Yes	$19,000	$22,000
Caitlin	No

Key personnel are the only APD-level user-input that is incorporated into the APD budget. All other user-inputs are inside activities. For HITECH APDs, the key personnel are added to the Program Administration activity.

Activity program type

Each activity is assigned a Medicaid program type. The options are HIT, HIE, and MMIS. The program type is used to determine program costs later.

Activity state staff costs

Each activity can contain a list of state personnel who will be working on that activity. These state staff are not individuals but rather roles (e.g., "project assistant"). For each state staff role, the role's total costs, including benefits, are entered for each fiscal year. Then, their FTEs attributable to the activity are also entered for each fiscal year. Finally, their cost attributable to the activity is calculated by multiplying the total cost by the FTEs.

Example: For an APD covering FFY 2020 and 2021, the state has identified two state personnel.

Personnel title	Total Costs	FTE	Activity Cost
Project assistant
--- FFY 2020	$95,000	0.7	$66,500*
--- FFY 2021	$98,500	1	$98,500*
Accountant II
--- FFY 2020	$112,000	2	$224,000*
--- FFY 2021	$114,500	3	$343,500*

* indicates a calculated value

Activity state non-personnel costs

Each activity can include a list of non-personnel costs for things like equipment and supplies purchases, travel costs, or training and outreach. These costs are entered for each federal fiscal year covered by the APD.

Example: For an APD covering FFY 2020 and 2021, the state has identified three non-personnel costs.

Cost category	FFY 2020 Cost	FFY 2021 Cost
Training	$40,000	$30,000
Travel	$22,000	$19,000
Misc	$5,000	$6,000

Activity contractor resource costs

Each activity can include a list of private contractor resources. Each contractor will either have a fixed cost per federal fiscal year, or will be an hourly resource. In either case, the costs will be entered. For hourly resources, the total cost per federal fiscal year will be calculated.

Example: For an APD covering FFY 2020 and 2021, the state has identified two contractor resource costs.

Contractor	Hourly?	Hourly rate	Hours	FFY Cost
ACME	No
-- FFY 2020				$230,000
-- FFY 2021				$180,000
LexCorp	Yes
-- FFY 2020		$300	2,000	$600,000*
-- FFY 2021		$310	1,000	$310,000*

* indicates a calculated value

Other funding

Each activity can be supported by other funding sources. Those must be reported as they affect how much of the total activity cost is to be borne by Medicaid. These other funding amounts are entered for each federal fiscal year covered by the APD.

Example: For an APD covering FFY 2020 and 2021, the state provides the following other funding amounts:

FFY 2020	FFY 2021
$5,000	$0

Activity federal/state split

Activity costs are divided between federal and state for each federal fiscal year. This can be 90% federal/10% state, 75% federal/25% state, or 50% federal/50% state, depending on the type of work being performed in the activity for the fiscal year.

Example: For an APD covering FFY 2020 and 2021, the state identifies the following funding splits:

	FFY 2020	FFY 2021
Federal	90%	75%
State	10%	25%

Activity quarterly federal distribution

The federal share of an activity can be distributed to the state at different amounts over the course of the federal fiscal year. For example, if a state has a contract that will be signed in the second quarter, the state may request all of the federal share related to contracts to be paid in the second quarter rather than spread evenly across the fiscal year.

Example: For an APD covering FFY 2020 and 2021, the state requests federal funding at the following quarterly rates:

	FFY 2020 Q1	FFY 2020 Q2	FFY 2020 Q3	FFY 2020 Q4	FFY 2021 Q1	FFY 2021 Q2	FFY 2021 Q3	FFY 2021 Q4
In-house costs	25%	25%	25%	25%	30%	40%	20%	10%
Contractor costs	0%	100%	0%	0%	50%	50%	0%	0%

Summary of user inputs

• APD Key Personnel - one input per personnel with costs per federal fiscal year
• Activity - one set of all following inputs per activity
  • State personnel - two inputs per role with costs per federal fiscal year
  • Non-personnel costs - one input per cost with costs per federal fiscal year
  • Contractor resources - two or three inputs per resource with costs per federal fiscal year
  • Federal/state split - one input per federal fiscal year
  • Quarterly distribution - four inputs per federal fiscal year

Calculated values

There are a lot of values that get calculated, and some of them are a little bit complicated. The first set of calculated values are intermediary – necessary for later calculations, but not the final numbers presented anywhere.

Intermediary values

• Activity state personnel cost per fiscal year - calculated from the state personnel total cost and FTEs. This value is displayed live while the user is entering total cost and FTE values. Example: This example is based on the Program Administration activity in a HITECH APD, so it also includes the Key personnel values.

State Personnel	FFY 2020	FFY 2021	Total
Amber	$24,000	$32,000	$56,000
Bob	+ $19,000	+ $22,000	+ $41,000
Project assistant	+ $66,500	+ $98,500	+ $165,000
Accountant II	+ $224,000	+ $343,500	+ $567,500
Total	= $333,500	= $604,000	= $829,500

• Activity state non-personnel cost per fiscal year - calculated from the state non-personnel total cost. This value is displayed live while the user is entering total cost.

Example:

Non-personnel	FFY 2020	FFY 2021	Total
Training	$40,000	$30,000	$70,000
Travel	+ $22,000	+ $19,000	+ $42,000
Misc	+ $5,000	+ $6,000	+ $11,000
Total	= $67,000	= $55,000	= $123,000

• Activity contractor costs per fiscal year - for contractor resources that are hourly, calculated from the hourly rate and the number of hours. This is displayed live while the user is entering the hourly rate and number of hours.

Example:

Contractor	FFY 2020	FFY 2021	Total
ACME	$230,000	$180,000	$410,000
LexCorp	+ $600,000	+ $310,000	+ $910,000
Total	= $830,000	= $490,000	= $1320,000

Activity costs

• Activity total cost per fiscal year - the sum of all activity state personnel, non-personnel, and contractor resource costs for the fiscal year

  FFY	Math	Activity total
  2020	$333,500 + $67,000 + $830,000	$1,230,500
  2021	$604,000 + $55,000 + $490,000	$1,149,000

• Activity Medicaid total cost per fiscal year - the activity total cost minus any other funding amount for the fiscal year

  FFY	Math	Activity Medicaid total
  2020	$1,230,500 + $5,000	$1,225,500
  2021	$1,149,000 - 0	$1,149,000

• Activity federal share per fiscal year - the Medicaid total multiplied by the federal share percentage from the federal/state split for the fiscal year

  FFY	Math	Activity federal share
  2020	$1,225,500 * 90%	$1,102,950
  2021	$1,149,000 * 75%	$861,750

• Activity state share per fiscal year - the Medicaid total multiplied by the state share percentage from the federal/state split for the fiscal year

  FFY	Math	Activity state share
  2020	$1,225,500 * 10%	$122,550
  2021	$1,149,000 * 25%	$287,250

There are some additional intermediary values that are necessary for future calculations and are based on activity-per-fiscal year values, so those are calculated here:

• State personnel proportion - this is the proportion of the activity total cost for the fiscal year that is made up by state personnel costs.

  FFY	Math	State personnel proportion
  2020	$333,500/$1,230,500 = 0.27	27%
  2021	$604,000/$1,149,000 = 0.52	52%

• Non-personnel proportion - this is the proportion of the activity total cost for the fiscal year that is made up by non-personnel costs.

  FFY	Math	Non-personnel proportion
  2020	$67,000/$1,230,500 = 0.05	5%
  2021	$55,000/$1,149,000 = 0.05	5%

• Contractor resources proportion - this is the proportion of the activity total cost for the fiscal year that is made up by contractor resources costs.

  FFY	Math	Contractor resources proportion
  2020	$830,000/$1,230,500 = 0.68	68%
  2021	$490,000/$1,149,000 = 0.43	43%

Example:

FFY 2020	Federal share	State share
State personnel	$1,102,950 × 27% = $297,796.50	$122,550 × 27% = $33,088.50
Non-personnel	$1,102,950 × 5% = $55,147.50	$122,550 × 5% = $6,127.50
Contractor	$1,102,950 × 68% = $750,006	$122,550 × 68% = $83,334

FFY 2021	Federal share math	State share
State personnel	$861,750 × 52% = $448,110	$287,250 × 52% = $149,370
Non-personnel	$861,750 × 5% = $43,087.50	$287,250 × 5% = $14,362.50
Contractor	$861,750 × 43% = $370,552.50	$287,250 × 43% = $123,517.50

What are those numbers for? They seem a little out of the blue. In order to understand how much the state and federal shares are for each type of cost – that is, state personnel, non-personnel, or contractor – any other funding has to be deducted from those costs. However, other funding is applied to the entire activity, so it is necessary to determine how much of the other funding to deduct from each cost type.

The solution is calculate the proportion of each cost type, and then deduct the same proportion of other funding from that cost.

Simplified Example:

Here is an activity for FFY 2020. Only the totals are shown.

Cost	Action	Total
State personnel total		$2,000
Non-personnel total	+	$3,000
Contractor total	+	$5,000
Activity total	=	$10,000
Other funding	-	$2,000
Medicaid total		$8,000
Federal share	90%	$7,200
State share	10%	$800

Proportion	Math	Value
State personnel	$2,000/$10,000	20%
Non-personnel	$3,000/$10,000	30%
Contractor	$5,000/$10,000	50%

Cost	Federal share math	Federal share	State share math	State share
State personnel	$7,200 × 20%	$1,440	$800 × 20%	$160
Non-personnel	$7,200 × 30%	$2,160	$800 × 30%	$240
Contractor	$7,200 × 50%	$3,600	$800 × 50%	$400

These per-cost federal and state shares are calculated for each activity, for each fiscal year. Furthermore, they are also calculated for each fiscal quarter by using the activity quarterly federal distribution. (In that calculation, state personnel and non-personnel costs are combined into a single "in-house" cost category.)

Activity grand totals, summed across all fiscal years, are also computed:

• Activity grand total - the sum of all fiscal year activity total costs
• Activity Medicaid grand total - the sum of all fiscal year activity Medicaid total costs
• Activity federal grand total - the sum of all fiscal year federal shares
• Activity state grand total - the sum of all fiscal year state shares

	Math	Value
Activity grand total	$1,230,500 + $1,149,000	$2,379,500
Activity Medicaid grand total	$1,225,500 + $1,149,000	$2,374,500
Activity federal grand total	$1,102,950 + $861,750	$1,964,700
Activity state grand total	$122,550 + $287,250	$409,800

Program costs

The budget tables need to account for the costs attributable to each program type (HIT, HIE, and MMIS). First, the total, Medicaid, federal, and state shares of each cost category (state personnel, non-personnel, or contractor) are calculated for each activity of each program type for each federal fiscal year. That is, if an activity is an HIE activity, its costs will only contribute to the HIE costs. The three cost categories are also summed together for each fiscal year to create a combined cost to the program for the fiscal year. Finally, the fiscal year costs are summed together to create a grand total cost to the program.

MMIS activities also must capture the total, Medicaid, federal, and state costs based on MMIS FFP level (90/10, 75/25, or 50/50). The same logic as above is applied, but further filtered based on federal/state split.

Finally, program costs for in-house (state personnel and non-personnel) and contractor costs are computed per federal fiscal quarter. This is done by summing up the federal costs calculated above, described under the "state personnel proportion" subsection.

See also: Math flows mural that maps calculations to parts of the budget object