(1)
Required Reports.
(a)
Resident Care Facility Cost Report. Each Resident Care
Facility must complete and file a Residential Care Cost Report each calendar
year with the Center, containing the Resident Care Facility's claim for
reimbursement and the complete financial condition of the Resident Care
Facility, including all applicable management company, central office, and real
estate expenses.
(b)
Realty Company Cost Report. A Resident Care Facility
that does not own the real property of the Resident Care Facility, and pays
rent to an affiliated or non-affiliated realty trust or other business entity,
must file or cause to be filed a realty company Cost Report with the Center. If
no report is filed, the Center will recommend that EOHHS should not reimburse
the costs associated with the Resident Care Facility's rental
expense.
(c)
Management
Company Cost Report. A Resident Care Facility that claims
management or central office expenses must file a separate management company
Cost Report with the Center for each entity for which it claims management or
central office expenses. If these costs are claimed for reimbursement, the
Resident Care Facility must certify that costs are reasonable and necessary for
the care of Publicly-aided Residents in Massachusetts.
(2)
General Cost Reporting
Requirements.
(a)
Accrual Method. Resident Care Facilities must complete
all required reports using the accrual method of accounting.
(b)
Documentation of Reported
Costs. Resident Care Facilities must maintain accurate, detailed,
and original financial records to substantiate reported costs for a period of
at least five years following the submission of required reports or until the
final resolution of any appeal involving a rate for the period covered by the
report, whichever occurs later. Resident Care Facilities must maintain complete
documentation of all of the financial transactions and census activity of the
Facility and affiliated entities, including but not limited to the books,
invoices, bank statements, canceled checks, payroll records, governmental
filings and any other records necessary to document the Resident Care
Facilities' claim for reimbursement. Resident Care Facilities must be able to
document expenses relating to affiliated entities for which reimbursement is
claimed whether or not they are Related Parties.
(c)
Fixed Asset
Ledger. Resident Care Facilities must maintain a fixed asset
ledger that clearly identifies each asset for which reimbursement is being
claimed, including its location, the date of purchase, the cost, salvage value,
accumulated depreciation, and the disposition of sold, lost or fully
depreciated assets.
(d)
Job Descriptions and Time Records. Resident Care
Facilities and management companies must maintain written job descriptions
including time records, qualifications, duties, and responsibilities for all
positions for which reimbursement is claimed. The Center will recommend that
EOHHS should not reimburse the salary and fringe benefits or the imputed amount
for Sole Proprietors as specified in
101 CMR
204.04(2): Base Year
Variable Cost for any individual for which the Resident Care Facilities does
not maintain a job description and time record.
(e)
Other Cost Reporting
Requirements.
1.Expenses that Generate
Income. Resident Care Facilities must identify the expense
accounts that generate income. The Center will recommend that EOHHS should
offset reported ancillary income if the Resident Care Facility does not
identify the associated expense account.
2.Laundry Expense.
Resident Care Facilities must separately identify the expense associated with
laundry services not provided to all Residents. Resident Care Facilities may
not claim reimbursement for such expense.
3.
Fixed Costs.
a.Resident Care Facilities must allocate all
Fixed Costs, except Equipment, on the basis of square footage. Resident Care
Facilities may elect to specifically identify Equipment related to the
Facility. The Resident Care Facilities must document each piece of Equipment in
the fixed asset ledger. If a Provider elects not to identify Equipment, it must
allocate Equipment on the basis of square footage.
b.If a Resident Care Facility undertakes
construction to replace beds, it must write off the fixed assets that are no
longer used to provide care to Publicly-aided Residents and may not claim
reimbursement for the assets.
c.Resident Care Facilities must separately
identify fully depreciated assets. Resident Care Facilities must report the
costs of fully depreciated assets and related accumulated depreciation on all
reports unless they have removed such costs and accumulated depreciation from
the Resident Care Facilities' books and records. Resident Care Facilities must
attach to the Cost Report a schedule of the cost of the retired Equipment,
accumulated depreciation and the accounting entries on the books and records of
the Facility when the Equipment is retired.
d.Resident Care Facilities may not report
expenditures for major repair projects whose useful life is greater than one
year as expenses.
e.Resident Care
Facilities must not report such expenditures as pre-paid expenses.
4.Mortgage Acquisition
Costs. Resident Care Facilities must classify Mortgage Acquisition
Costs as other Assets. Resident Care Facilities may not add Mortgage
Acquisition Costs to fixed asset accounts.
5.Related Parties.
Resident Care Facilities must report salary expenses paid to a Related Party
and must identify all goods and services purchased from a Related Party. If a
Resident Care Facility purchases goods and services from a Related Party, it
must disclose the Related Party's cost of the goods and services. The Center
will recommend that EOHHS should limit reimbursement for such goods and
services to the lower of the Related Party's cost or the cost determined using
the Prudent Buyer Concept.
6.Service of Non-paid
Workers. The services must be fully disclosed in the Footnotes and
Explanations section of the Cost Report. Both the total Expense and the
account(s) in which the expense is reported must be identified.
7.
Facilities in which other
Programs are Operated. If a Resident Care Facility operates an
adult day health program, an assisted living program, or provides outpatient
services, the Resident Care Facility must not claim reimbursement for the
expenses of such programs. If the Resident Care Facility converts a portion of
the Facility to another program, the Resident Care Facility must:
a.identify existing Equipment no longer used
in Facility operations. Such Equipment must be removed from the Facility's
records;
b.identify the square
footage of the existing Building and improvement costs associated with the
program, and the Equipment associated with the program; and
c.allocate shared costs, including shared
capital costs, using a well documented and generally accepted allocation
method. The Resident Care Facility must directly assign to the program any
additional capital expenditures associated with the program.
(3)
Filing Deadlines.
(a)
General. All Resident Care Facilities must file
required Cost Reports for the calendar year by 5:00 P.M. April
1st of the following calendar year. If April
1st falls on a weekend or holiday, the reports are
due by 5:00 P.M. of the following business day.
(b)
Special
Provisions.
1.Change
of Ownership. The transferor must file Cost Reports with the
Center within 60 days after a Change of Ownership. The Center will notify the
Department of Transitional Assistance if required reports are not filed timely
for payments to be withheld or other appropriate action by that
agency.
2.New
Facilities and Facilities with Major Additions. New Facilities and
Facilities with Major Additions that become operational during the Rate Year
must file year end Cost Reports with the Center within 60 days after the close
of the first and second Rate Years.
3.Appointment of a Resident
Protector Receiver. If a receiver is appointed pursuant to M.G.L.
c. 111, § 72N, the Resident Care Facilities must file Cost Reports for the
pre-receivership reporting period or portion thereof with the Center, within 60
days of the receiver's appointment.
4.Closed Facilities.
A Facility that permanently closes is not required to file the reports cited in
101 CMR
204.07(1): Required Reports
for the year in which the Facility closed.
(4)
Incomplete
Submissions. If the Cost Reports are incomplete, the Center will
notify the Resident Care Facility in writing within 120 days of the receipt.
The Center will specify the additional information that the Resident Care
Facility must submit to complete the Cost Reports. The Resident Care Facility
must file the necessary information within 25 days of the date of notification
or by April 1st of the year the Cost Reports are
filed, whichever is later. If the Center fails to notify the Resident Care
Facility within the 120-day period, the Cost Reports will be considered
complete and deemed to be filed on the date of receipt.
(5)
Amended Reports.
Amended Reports will be accepted no later than August
15th of the year in which the Cost Reports are due.
Amended Reports must be accompanied by a complete list of the corrections made
to the reports with sufficient supporting documentation along with an
explanation of the reasons therefore.