Current through Register Vol. 50, No. 9, September 20, 2024
A. Initial Cost
Report. The initial cost report submitted by all providers of Long Term Care
services under the Medicaid Program shall be based on the most recent fiscal
year end.
1. An exception to the initial cost
report requirement may be recognized on an individual basis upon request by the
provider prior to the due date. If an exception is allowed, the provider shall
attach to the cost report a statement fully describing the nature of the
exception for which written permission was requested and granted.
2. For the initial reporting period only, the
provider may allocate costs to the various cost centers on a reasonable basis
if the required departmental cost breakdown is not available.
B. Subsequent Cost Reports.
Subsequent cost reports shall be submitted annually by each provider within 90
days of the close of its normal fiscal year end.
C. Changes of Ownership. In the event of a
change in ownership of the facility, the old entity operating the facility
shall be required to submit a final cost report from the date of its last
fiscal year end to the date of sale or lease.
1. If the new legal entity continues the
operations of the facility as a provider of Medicaid services, the new legal
entity shall be required to furnish the BHSF-HSS with an initial cost report
from the date of purchase or lease to the new fiscal year end selected by the
new legal entity.
EXAMPLE: Ms. New purchased Facility A from Mr. Old on
September 1, 1985. Facility A's fiscal year end prior to the sale was December
31. Mr. Old is required to file a cost report for the period January 1, 1985
through August 31, 1985. If Ms. New decides to change Facility A's fiscal year
end to June 30, her first report shall be due for the 10 month period ending
June 30, 1986 and annually thereafter.
a. Furthermore, when a facility changes
ownership on or after October 1, 1985, the Consolidated Omnibus Budget
Reconciliation Act limits evaluation of facility assets to the acquisition
costs of the previous owner increased by 50 percent of the Consumer Price Index
or 50 percent of Nursing Facility Construction Cost Index, whichever is
lower.
b. In auditing cost reports,
DHH will apply this HIM-15 regulation in determining actual cost applicable to
sales.
c. If full disclosure of the
facts has not been made to the Department of Health and Hospitals and the
Department of Health and Hospitals approves a transaction, such approval is
qualified on the basis of the facts presented. Any questions concerning a
relatedness situation should be directed in writing to Bureau of Health
Services Financing.
2.
New Facilities
a. A new facility is defined
as a newly constructed facility, a facility not currently participating in the
Medicaid program or a Medicaid program facility which has been certified for a
higher level of care.
b. A new
facility may select an initial cost reporting period of at least one month but
not to exceed 13 months.
c.
Thereafter, the cost reports shall be submitted as in subsequent cost reports
described above.
EXAMPLE: A new facility began Medicaid participation on
September 15, 1985. The owner wishes to adopt a reporting period ending
September 30. The owner must file a report for the period September 15, 1985 to
September 30, 1986. He/She cannot file a report for the 15-day period ending
September 30, 1985.
Note: Facilities purchased as ongoing concerns are not
considered new facilities for Medicaid purposes.
3. Final Cost Reports. When a provider ceases
to participate in the Medicaid Program, he/she must file a cost report covering
a period up to the effective date the facility ceases to participate in the
program. Depending upon the circumstances involved in the preparation of the
provider's final cost report, the provider may file for a period not less than
one month and not more than 13 months.
4. Due Date Extensions. If the facility
experiences unavoidable difficulties in preparing its cost report by the
prescribed due date, one 30 day extension may be permitted upon written request
to the Bureau of Health Services Financing Medicaid Program prior to the due
date. Extensions beyond the 30 day time limit may be approved for situations
beyond the facility's control. An extension of the cost report due date cannot
be granted when the provider agreement is terminated or a change in ownership
occurs.
5. Basis of Accounting.
a. All cost report information shall be
submitted in accordance with generally accepted accounting principles (GAAP) as
well as state and federal regulations. The accrual method of accounting is the
only acceptable method for private providers. State institutions shall be
allowed to submit data on the cash basis.
b. General ledger accounts should follow the
Chart of Accounts previously provided each participating facility.
8. Related Party Transactions.
Chapter 10 of HIM-15 explains the treatment of cost(s) applicable to services,
facilities, and supplies provided to the facility by organizations related by
common ownership or control. The Medicaid Cost Report can only include the
actual cost(s) to the related organization for those services, facilities, and
supplies. The cost(s) must not exceed the price of comparable services,
facilities, or supplies that could be purchased elsewhere.
9. Cost Report Form. The cost report form
shall be used by all private providers of nursing facility services. State
institutions shall use the same form with additional information for covered
ancillary services. All providers shall determine allowable costs utilizing the
Standards for Payment Manual and the Medicare Provider Reimbursement Manual
(HIM-15) instructions provided with the cost report form.
10. Financial Records. All providers who
elect to participate in the Medicaid Program shall maintain all financial and
statistical information necessary to substantiate cost data for three years
following submission of the cost report or until all audit exceptions are
resolved, whichever period is longer. All providers are required to make these
records available upon demand to representatives of the state or federal health
agencies or their contractual representatives.
11. Allowable Costs
a. Allowable costs for reimbursement to Long
Term Care Facilities providing services under Medicaid shall follow the general
provisions outlined in the HIM-15.
b. For costs to be allowable, they must be
reasonable and related to resident care. The reasonableness of all allowable
costs shall be assessed by the BHSF with input from the Audit Contractor,
industry representatives, and other interested parties.
c. Allowable cost limits are listed below.
More comprehensive explanations of these allowable costs are included in the
HIM-15.
12. Salaries.
Allowable costs for salaries for Administrator, Assistant Administrator, and
other facility managers are limited to the maximum set by the state based on
the audit contractors review of cost reports statewide, regardless of the size
of the nursing facility.
13.
Related Travel Expenses. Reasonable travel expenses are allowable only as
related to administration of the facility and resident care.
14. Insurance. Insurance rates are allowable
for ordinary and necessary coverage and shall be limited to a reasonable price
in addition to any interim increases initiated by the insurance
company.
15. Interest. Necessary
and proper interest on both current and capital indebtedness is allowable and
shall be limited to that which can be specifically related to the purchase of
an asset or is necessary for the operation of the facility.
16. Motor Vehicles. Depreciation and interest
expenses are allowable for certain types of motor vehicles if limited to the
statewide average list price published at the beginning of each fiscal year by
the Bureau of Health Services Financing. This list includes a new standard size
auto or van depreciated over 36 months at the prevailing new auto interest rate
charged by lending institutions.
a. Lease
costs are limited to charges over 36 months by bank-related leasing companies
or actual lease costs, whichever is less.
b. Vehicle taxes, tags, titles and insurance
charges may be claimed as an allowable cost in the year paid.
c. All use of such vehicles shall be related
to patient care or administration of the facility.
d. The following types of vehicles are
specifically disallowed:
i. recreational
vehicles;
ii. pickup trucks
equipped for camping; and
iii.
airplanes and boats.
17. Rent. Rents paid to unrelated parties in
accordance with HIM-15 are allowable costs. Rental payments between related
parties are not allowable costs. Costs of ownership, such as depreciation,
interest, etc. may be included in the cost report.
18. Dues. Reasonable dues to one professional
trade association or organization are considered an allowable cost.
19. Management Fees and Central Office
Overhead
a. Contracts for management services
are allowable costs. They shall specify exactly what services are covered by
the fee.
b. The charges by a
related management firm are limited to actual cost which shall not exceed what
the service would cost from unrelated management companies.
Note: If a facility's management fees/central office
overhead costs are the results of related party transactions, the provider
shall submit a separate cost report for the related management company/central
office. Salaries shall be limited to Civil Service maximums.
20. Nurse Assistant Training.
There shall be a supplemental cost report for nurse aide training and these
costs shall not be included in the regular cost report.
21. Owner's Compensation. All types of
owners' compensation costs are allowable based on the following limitations.
a. The position filled by the owner is normal
to the industry.
b. The salary paid
to the owner is in line with employees' salaries for similar positions as shown
in the paragraph entitled Salaries.
c. Facility records document shows that the
owner does perform the service for which he/she is being compensated.
22. Depreciation. Only the
straight-line method of depreciation shall be allowed.
NOTE: Depreciation of assets being used by a vendor at
the time he enters the Medicaid program is allowed. This applies even though
such assets be fully or partially depreciated on the vendor's books. As long as
an asset is being used, its useful life is considered not to have ended.
Consequently, the asset is subject to depreciation based on a revised estimate
of the asset's useful life as determined by the provider and approved by the
Medicaid program.
23. Costs
Not Allowable
a. Dues paid to more than one
professional trade association or organization, bad debts, unreasonable costs,
costs not related to resident care, fines and penalties, and related party
costs in excess of actual costs are examples of unallowable costs.
b. Nursing facilities are not to show any
cost relating to ventilator equipment in their cost reports to Bureau of Health
Services Financing.
c. In cases
where nursing service expense at the various levels of care is not kept
separate, the following formula may be used for allocating these costs:
i. step one, multiply the number of resident
days at each level of care by the weighted factor;
NOTE: The factor represents the number of nursing hours
required per patient day at each level of care.
ii. step two, compute the weighted percentage
of patient days for each level of care;
iii. step three, apply the percentage
computed in step two to the total nursing service expense for the
period;
iv. step four, the result
obtained in step three is carried to the appropriate schedule of the cost
report.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
46:153.
