Current through Register Vol. 49, No. 13, September 23, 2024
Subpart
1.
Allowable costs.
Only costs determined to be allowable under parts
9549.0010 to
9549.0080 shall be used to compute
the total payment rate for nursing facilities participating in the medical
assistance program.
Subp.
2.
Applicable credits.
Applicable credits must be used to offset or reduce the
expenses of the nursing facility to the extent that the cost to which the
credits apply was claimed as a nursing facility cost. Interest income, dividend
income, and other investment income of the nursing facility or related
organization are not applicable credits except to the extent that the interest
expense on working capital debt is incurred and claimed as a reimbursable
expense by the nursing facility or related organization. Interest income must
not be offset against working capital interest expense if it relates to a bond
sinking fund or a restricted fund as defined in part
9549.0060, subpart
7, item B, or other
restricted fund if the income is not available to the nursing facility or
related organization. Gains or losses on the sales of capital assets used by
the nursing facility must not be applicable credits.
Subp. 3.
Adequate documentation.
A nursing facility shall keep adequate documentation.
A. In order to be adequate, documentation
must:
(1) be maintained in orderly,
well-organized files;
(2) not
include documentation of more than one nursing facility in one set of files
unless transactions may be traced by the department to the nursing facility's
annual cost report;
(3) include a
paid invoice or copy of a paid invoice with date of purchase, vendor name and
address, purchaser name and delivery destination address, listing of items or
services purchased, cost of items purchased, account number to which the cost
is posted, and a breakdown of any allocation of costs between accounts or
nursing facilities. If any of the information is not available, the nursing
facility shall document its good faith attempt to obtain the
information;
(4) include contracts,
agreements, amortization schedules, mortgages, other debt instruments, and all
other documents necessary to explain the nursing facility's costs or revenues;
and
(5) be retained by the nursing
facility to support the five most recent annual cost reports. The commissioner
may extend the period of retention if the field audit was postponed because of
inadequate record keeping or accounting practices as in part
9549.0041, subpart 13, item A, the
records are necessary to resolve a pending appeal, or are required for the
enforcement of Minnesota Statutes, section
256B.48.
B. Compensation for personal
services, regardless of whether treated as direct or indirect costs, must be
documented on payroll records. Payrolls must be supported by time and
attendance or equivalent records for individual employees. Salaries and wages
of employees which are allocated to more than one cost category must be
supported by time distribution records. The method used must produce a
proportional distribution of actual time spent, or an accurate estimate of time
spent performing assigned duties. The nursing facility that chooses to estimate
time spent must use a statistically valid method. The compensation must reflect
an amount proportionate to a full-time basis if the services are rendered on
less than a full-time basis.
C.
Except for vehicles used exclusively for nursing facility business, the nursing
facility or related organization must maintain a motor vehicle log that shows
nursing facility mileage for the reporting year. Mileage paid for the use of a
personal vehicle must be documented.
D. Complete and orderly records must be
maintained for cost allocations made to cost categories.
Subp. 4.
Compensation for personal
services.
Compensation for personal services includes all the
remuneration paid currently, accrued or deferred, for services rendered by the
nursing facility's owners or employees. Only compensation costs for the current
reporting period are allowable subject to the requirements of parts
9549.0010 to
9549.0080.
A. Compensation includes:
(1) salaries, wages, bonuses, vested
vacations, vested sick leave, and fringe benefits paid for managerial,
administrative, professional, and other services;
(2) amounts paid by the nursing facility for
the personal benefit of the owners or employees;
(3) the costs of assets and services which
the owner or employee receives from the nursing facility;
(4) deferred compensation, individual
retirement plans such as individual retirement accounts, pension plans, and
profit-sharing plans;
(5) the
annual cost of supplies, use of capital assets, services for personal use, or
any other in kind benefits received by the owners or employees; and
(6) payment to organizations of nonpaid
workers, that have arrangements with the nursing facility for the performance
of services by the nonpaid workers.
B. The nursing facility must have a written
policy for payment of compensation for personal services. The policy must
relate the individual's compensation to the performance of specified duties and
to the number of hours worked. Compensation payable under the plan must be
consistent with the compensation paid to persons performing similar duties in
the nursing facility industry. Employees covered by collective bargaining
agreements are not required to be covered by the policy if the collective
bargaining agreement otherwise meets the essentials of the policy required by
this item.
C. Only necessary
services shall be compensated.
D.
Except for accrued vested vacation, accrued vested sick leave, or compensation
claims subject to litigation or employer-employee dispute resolution,
compensation must be actually paid, whether by cash or negotiable instrument,
within 107 days after the close of the reporting period. If payment is not made
within the 107 days, the unpaid compensation shall be disallowed in that
reporting year.
Subp. 5.
Licensure and certification costs.
Subject to parts
9549.0010 to
9549.0080 all operating costs of
meeting the licensure and certification standards in items A to C are allowable
operating costs for the purpose of setting nursing facility payment rates. The
standards are:
A. standards set by
federal regulations for skilled nursing facilities and intermediate care
facilities;
B. requirements
established by the Minnesota Department of Health for meeting health standards
as set out by state rules and federal regulations; and
C. other requirements for licensing under
state and federal law, state rules, or federal regulations that must be met to
provide nursing and boarding care services.
Subp. 6.
Routine service costs.
Subject to parts
9549.0010 to
9549.0080 all operating costs of
routine services including nursing, dietary, and support services are allowable
operating costs for the purpose of setting nursing facility payment
rates.
Subp. 7.
Related organization costs.
Costs applicable to services, capital assets, and supplies
directly or indirectly furnished to the nursing facility by any related
organization are includable in the allowable cost of the nursing facility at
the purchase price paid by the related organization for capital assets or
supplies and at the cost incurred by the related organization for the provision
of services to the nursing facility if these prices or costs do not exceed the
price of comparable services, capital assets, or supplies that could be
purchased elsewhere. For this purpose, the related organization's costs must
not include an amount for markup or profit.
If the related organization in the normal course of business
sells services, capital assets, or supplies to nonrelated organizations, the
cost to the nursing facility shall be the nonrelated organization's price
provided that sales to nonrelated organizations constitute at least 50 percent
of total annual sales of similar services, or capital assets, or
supplies.
Subject to parts
9549.0010 to
9549.0080, the cost of ownership
of a capital asset which is used by the nursing facility must be included in
the allowable cost of the nursing facility even though it is owned by a related
organization.
Subp. 8.
General cost principles.
For rate-setting purposes, a cost must satisfy the following
criteria:
A. the cost is ordinary,
necessary, and related to resident care;
B. the cost is what a prudent and cost
conscious business person would pay for the specific good or service in the
open market in an arm's length transaction;
C. the cost is for goods or services actually
provided in the nursing facility;
D. the cost effects of transactions that have
the effect of circumventing these rules are not allowable under the principle
that the substance of the transaction shall prevail over form; and
E. costs that are incurred due to management
inefficiency, unnecessary care or facilities, agreements not to compete, or
activities not commonly accepted in the nursing facility care field are not
allowable.
Statutory Authority: MS s
256B.41 to
256B.502
