Indiana Administrative Code
Title 405 - OFFICE OF THE SECRETARY OF FAMILY AND SOCIAL SERVICES
Article 1 - MEDICAID PROVIDERS AND SERVICES
Rule 12 - Rate-Setting Criteria for Nonstate-Owned Intermediate Care Facilities for the Mentally Retarded and Community Residential Facilities for the Developmentally Disabled
Section 12-20.5 - Extensive support needs residences for adults; fair rental value allowance
Current through March 20, 2024
Authority: IC 12-15-1-10; IC 12-15-21-2
Affected: IC 12-13-7-3; IC 12-15
Sec. 20.5.
Providers of extensive support needs residences for adults shall be reimbursed for the use of facilities and equipment, regardless of whether they are owned or leased, by means of a fair rental value allowance. The fair rental value allowance shall be in lieu of the costs of all depreciation, interest, lease, rent, or other consideration paid for the use of property. This includes all central office facilities and equipment whose patient care-related depreciation, interest, or lease expense is allocated to the facility. The fair rental value allowance shall be calculated as follows:
(1) The fair rental value allowance for extensive support needs residences for adults is calculated during rebasing years and base rate reviews by determining, on a per bed basis, the historical cost of allowable patient-related property for facilities that are not acquired through an operating lease arrangement, including the following:
The original historical cost of allowable resident related land, buildings, and improvements as of the provider's date of initial Medicaid certification shall be adjusted for changes in valuation by inflating the reported allowable patient-related historical cost of property from the date of facility acquisition to the present based on the change in the R. S. Means Construction Index.
(2) The inflation-adjusted historical cost of property per bed as determined in subdivision (1) is arrayed to arrive at the average historical cost of property of the median bed.
(3) The average historical cost of property of the median bed as determined in subdivision (2) is extended times the number of beds for each facility to arrive at the fair rental value amount.
(4) The fair rental value amount is extended by a rental rate to arrive at the fair rental allowance. The rental rate shall be a simple average of the United States Treasury bond, ten (10) year amortization, constant maturity rate plus three percent (3%), in effect on the first day of the month that the index is published for each of the twelve (12) months immediately preceding the calendar quarter that includes the rate effective date. The rental rate shall be updated quarterly on January 1, April 1, July 1, and October 1.
(5) If there are fewer than six (6) nonleased homes with rates established that are licensed as extensive support needs residences for adults, then the historical cost of property per bed used in the fair rental value calculation shall be one hundred eighteen thousand seven hundred fifty dollars ($118,750).
