49.34(5m)(b)1.1. If revenue under a contract for the provision of a rate-based service exceeds allowable costs incurred in the contract period, the contract shall allow the provider to retain from the surplus up to 5 percent of the revenue received under the contract unless a uniform rate is established by rule under subd. 5., in which case the contract shall allow the provider to retain the uniform percentage rate established by the rule. The retained surplus is the property of the provider.

49.34(5m)(b)4. 4. If on December 31 of any year the provider's accumulated surplus from all contract periods ending during that year for a rate-based service exceeds the allowable retention rate under subd. 1., the provider shall provide written notice of that excess to all purchasers of the rate-based service. Upon the written request of such a purchaser received no later than 6 months after the date of the notice, the provider shall refund the purchaser's proportional share of that excess. If the department determines based on an audit or fiscal review that the amount of the excess identified by the provider was incorrect, the department may seek to recover funds after the 6-month period has expired. The department shall commence any audit or fiscal review under this subdivision within 6 years after the end of the contract period.

49.34(5m)(b)5. 5. The department, in consultation with the department of health services and the department of corrections, shall promulgate rules to implement this subsection including all of the following:

49.34(5m)(b)5.a. a. Requiring that contracts for rate-based services under this subsection allow a provider to retain from any surplus revenue up to 5 percent of the total revenue received under the contract, or a different percentage rate determined by the department. The percentage rate established under this subd. 5. a. shall apply uniformly to all rate-based service contracts under this subsection.

49.34(5m)(em) (em) Notwithstanding par. (b), a county department under s. 46.215, 51.42, or 51.437 providing client services in a county having a population of 750,000 or more or a nonstock, nonprofit corporation providing client services in such a county may not retain a surplus generated by a rate-based service or accumulate funds from more than one contract period for a rate-based service from revenues that are used to meet the maintenance-of-effort requirement under the federal temporary assistance for needy families program under 42 USC 601 to 619.

49.34(5m)(f) (f) All providers that are subject to this subsection shall comply with any financial reporting and auditing requirements that the department may prescribe. Those requirements shall include a requirement that a provider provide to any purchaser and the department any information that the department needs to claim federal reimbursement for the cost of any services purchased from the provider and a requirement that a provider provide audit reports to any purchaser and the department according to standards specified in the provider's contract and any other standards that the department may prescribe.

49.34(6) (6) Contracts may be renegotiated by the purchaser under conditions specified in the contract.

49.34(7) (7) The service provider under this section may appeal decisions of the purchaser in accordance with terms and conditions of the contract and ch. 68 or 227.

49.343(1d)(1d) Definitions. In this section:

49.343(1d)(a) (a) “Administrative rate" means the difference between the rate charged by a child welfare agency to a purchaser of foster care services and the rate paid by the child welfare agency to a foster parent for the care and maintenance of a child.

49.343(1g) (1g) Establishment of rates. For services provided beginning on January 1, 2011, the department shall establish the per client rate that a residential care center for children and youth or a group home may charge for its services, and the per client administrative rate that a child welfare agency may charge for the administrative portion of its foster care services, as provided in this section. In establishing rates for a placement specified in s. 938.357 (4) (c) 1. or 2., the department shall consult with the department of corrections. A residential care center for children and youth and a group home shall charge all purchasers the same rate for the same services and a child welfare agency shall charge all purchasers the same administrative rate for the same foster care services. The department shall determine the levels of care created under the rules promulgated under s. 48.62 (8) to which this section applies.

49.343(2) (2) Determination of rates.

49.343(2)(a) (a) By October 1, annually, a residential care center for children and youth or a group home shall submit to the department the per client rate that it proposes to charge for services provided in the next year and a child welfare agency shall submit to the department the proposed per client administrative rate that it proposes to charge for foster care services provided in the next year. The department shall provide forms and instructions for the submission of proposed rates under this paragraph and a residential care center for children and youth, group home, or child welfare agency that is required to submit a proposed rate under this paragraph shall submit that proposed rate using those forms and instructions.

49.343(2)(b) (b) The department shall review a proposed rate submitted under par. (a) and audit the provider submitting the proposed rate to determine whether the proposed rate is appropriate to the level of services to be provided, the qualifications of the provider to provide those services, and the reasonable and necessary costs of providing those services. In reviewing a proposed rate, the department shall consider all of the following factors:

49.343(2)(b)1. 1. Changes in the consumer price index for all urban consumers, U.S. city average, as determined by the U.S. department of labor, for the 12 months ending on June 30 of the year in which the proposed rate is submitted.

49.343(2)(b)1m. 1m. Changes in the consumer price index for all urban consumers, U.S. city average, for the medical care group, as determined by the U.S. department of labor, for the 12 months ending on June 30 of the year in which the proposed rate is submitted.

49.343(2)(b)2. 2. Changes in the allowable costs of the residential care center for children and youth, group home, or child welfare agency based on current actual cost data or documented projections of costs.