Alabama Administrative Code
Title 560 - ALABAMA MEDICAID AGENCY
Chapter 560-X-42 - ICF/MR REIMBURSEMENT
Section 560-X-42-.07 - Management And Administrative Costs
Current through Register Vol. 42, No. 11, August 30, 2024
(1) Costs of a management or administrative nature, including but not limited to those costs outlined in Rule (3), will be reported as such on the Medicaid Cost Report. Salaries of administrative personnel which would duplicate employee salary expenses in other cost centers cannot be allocated to such nonadministrative cost centers. Administrative compensation is limited to 10% of net allowable other cost, plus use allowance (if applicable).
(2) Customarily, owner compensation results from a distribution of the profits. However, when the owner provides a necessary service to the facility, and he/she can justifiably be compensated at a reasonable rate, then that owner compensation is an allowed cost. "Reasonable compensation" must meet the criteria of being paid to an employee who performs a necessary function in a facility and must be in an amount which would ordinarily be paid for comparable services in a comparable facility. To be "necessary," a function must be one that if that employee were not performing it, another would have to be employed to do so, and additionally, the function must be directly related to providing ICF/IID services.
(3) Examples of Allowable Management and Administrative Costs include, but are not limited to:
Author: Robin Arrington, Associate Director, LTC Provider/Recipient Services Unit
Statutory Authority: State Plan; Title XIX, Social Security Act; 42 C.F.R. §§ 447.250 - .255.