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case management versus other activities;

(3) to the number reached in (2) of this subsection, the department will add the portion of other operating costs, including travel, supplies, telephone, and occupancy costs, attributed to case management;

(4) to the number reached in (3) of this subsection, the department will add direct supervisory costs, computed by using the base year’s reported expenditures for each individual who provides direct supervision to case managers, and then, using the proportion determined in (1) of this subsection, computing the portion of salaries and benefits attributed to direct supervision of case managers versus other activities;

(5) to the number reached in (4) of this subsection, the department will add the average indirect administrative costs of provider organizations, computed by using the base year’s reported expenditures for indirect administrative costs, and then, using the proportion determined in (1) of this subsection, computing the portion of indirect administrative costs attributed to case management versus other activities;

(6) the department will divide the sum of the results reached in (2) — (5) of this subsection by the total number of statewide case managers to obtain the total annual cost per case manager; the department will determine the total number of statewide case managers by calculating the portion of direct service provider full-time equivalents dedicated to case management, using the base year’s actual reported full-time equivalents and the proportion determined in (1) of this subsection;

(7) the department will divide the total annual cost per case manager, as computed in (6) of this subsection, by 12 to obtain the monthly statewide average cost per case manager;

(8) using the base year’s average actual number of children served per case manager, the department will divide the monthly statewide average cost per case manager by the statewide average number of children served by each case manager per month;

(9) the calculated rate from base-year data will be annually updated by 2.7 percent for inflation on July 1 of each year;

(10) for state fiscal year 2020, the department will not apply the inflation adjustment described in (9) of this subsection. (c) A provider of targeted case management services may only bill the encounter rate once per child per month and must keep documentation to verify that practice. (Eff. 2/1/2010, Register 193; am 10/1/2017, Register 223; am 7/1/2019, Register 231) Statutory Authority: Authority: AS 47.05.010 AS 47.07.040 AS 47.20.070