Current through Register Vol. 49, No. 13, September 23, 2024
Subpart 1.
Cost classification.
Costs must be classified as provided in this subpart. Total
costs for each category must be compiled and recorded on the cost
report.
A. The provider shall classify
costs using direct identification of costs, without allocation, by routine
classification of transactions when costs are recorded in the books and records
of the facility. The classification of costs must be made according to the cost
categories defined in part
9553.0040.
B. In addition to costs which must be
included in the administrative cost category, indirect costs such as generic
supplies that cannot be readily assignable to one or more cost categories must
be classified to the administrative cost category.
C. Except for persons in top management, the
compensation of any person having multiple duties, including persons who have
only nominal top management responsibilities, must be directly identified and
classified to the appropriate cost categories on the basis of time distribution
records that show actual time spent, or an accurate estimate of time spent on
various activities. Except as provided in item D, the compensation of persons
who have top management responsibilities may be classified to a cost category
other than administrative operating costs to the extent justified in time
distribution records showing the actual time spent, or an accurate estimate of
time spent on various activities. Any facility or provider group choosing to
estimate the time spent in different cost categories must use a statistically
valid method.
D. The compensation
of a person who is classified as top management personnel and who performs any
service for the central, affiliated, or corporate office must be allocated to
the facility's administrative cost category in accordance with subpart
4, item C if the facility or
provider group served by the central, affiliated, or corporate office has more
than 48 licensed beds.
Subp.
2.
Allocation of personal expenses for owners whose primary
residence is in the facility.
Allocation procedures in this subpart must be applied to
personal expenses of owners whose primary residence is in the facility to the
extent that these costs were included in the facility's costs.
A. Dietary services cost allocation must be
based on the number of meals served.
B. Housekeeping, plant operations, and
maintenance cost allocation must be based on the ratio of square feet of floor
space devoted to personal use divided by the total square feet of floor space
of the facility.
C. Depreciation,
interest, real estate and personal property taxes, and property and liability
insurance costs must be allocated based on the ratio of square feet of floor
space devoted to personal use divided by the total square feet of floor space
of the facility.
D. Laundry and
linen costs, and administrative costs for items such as telephones and
vehicles, must be allocated based on a reasonable estimate of actual
use.
Subp. 3.
Cost
allocations for other services.
Costs associated with services other than ICF/DD services such
as apartments, semi-independent living services, and any other revenue
generating operations, except respite care, must be allocated using the
principles in subpart
1 and the procedures in
subpart
2.
Subp. 4.
Central, affiliated, or
corporate office costs.
Cost allocation for central, affiliated, or corporate offices
shall be governed by items A to F.
A.
Central, affiliated, or corporate office salary expense representing services
of consultants required by law or regulation in areas including dietary,
pharmacy, program, or other resident care related activities may be allocated
to the appropriate cost category, but only to the extent that those salary
expenses are directly identified by the facility.
B. Central, affiliated, or corporate office
costs representing services of consultants not required by law in the areas of
program, quality assurance, medical records, dietary, other care related
services, and plant operations may be allocated to the appropriate operating
cost category of a facility according to subitems (1) to (5).
(1) Only the salary, fringe benefits, and
payroll taxes associated with the individual performing the service may be
allocated. No other costs must be allocated.
(2) The allocation must be based on direct
identification and to the extent justified in time distribution records which
show the actual time spent by the consultant performing services in the
facility.
(3) The cost in subitem
(1) for each consultant must be allocated to only one operating cost category
in the facility. If more than one facility is served by a consultant, all
facilities shall allocate the consultant's cost to the same operating cost
category.
(4) Top management
personnel shall not be considered consultants for purposes of this
item.
(5) The consultant's entire
job responsibility is to provide the services identified in this
item.
C. Except as
provided in items A and B, central, affiliated, or corporate office costs must
be allocated to the administrative cost category of each facility within the
group served by the central, affiliated, or corporate office according to
subitems (1) to (5).
(1) All costs that can be
directly identified with a specific facility must be classified to that
facility.
(2) All costs that can be
directly identified with a specific operation unrelated to the facility's
operation must be allocated to that unrelated operation.
(3) After the costs that can be directly
identified according to subitems (1) and (2) have been allocated, the remaining
central, affiliated, or corporate office costs must be allocated between
facility operations and unrelated operations based on the ratio of
expenses.
(4) Next, operations
which have facilities both in Minnesota and outside of Minnesota must allocate
the central, affiliated, or corporate office costs to Minnesota based on the
ratio of total resident days in Minnesota facilities to the total resident days
in all facilities.
(5) Finally, the
facility related central, affiliated, or corporate office costs must be
allocated to each facility based on resident days.
D. Central, affiliated, or corporate office
property-related costs of capital assets used directly by a facility in the
provision of ICF/DD services must be classified to the property-related cost
category of the facility which uses the capital asset. Central, affiliated, or
corporate office property-related costs of capital assets that are not used
directly by a facility in the provision of ICF/DD services must be allocated to
the administrative cost category of each facility using the methods described
in item C.
E. The useful life of a
capital asset maintained by a central, affiliated, or corporate office must be
determined as in part
9553.0060, subpart
1, item B.
F. A governmental or nonprofit organization
that has a federally approved cost allocation plan may allocate management fees
or central office costs to a related organization based on the governmental or
nonprofit organization's federal cost allocation plan. The provider must
document that the allocation plan has been approved by the federal
government.
Subp. 5.
Allocation of costs to related or nonrelated organizations.
A facility's costs associated with services or goods provided
by the facility to a related or nonrelated organization must be allocated on
the basis of items A to C.
A. Costs of
services must be allocated based on the documentation of time spent performing
the service by each individual providing services to the related organization
or nonrelated organization. All identifiable expenses including salary, fringe
benefits, and payroll taxes, travel, and supplies of an individual providing
services for related organizations or nonrelated organizations must be
allocated based on the ratio of actual time spent performing the services for
each related or nonrelated organization.
B. The cost of goods sold to or used by a
related organization or nonrelated organization must be directly allocated to
the organization. The cost of goods sold to or used by more than one
organization must be allocated proportionally to each related organization or
nonrelated organization based on a reasonable estimate of actual use.
C. The cost of goods or services allocated to
a related organization or nonrelated organization must not be an allowable cost
for the facility.
Subp.
6.
Payroll tax and fringe benefit cost allocation.
A facility's payroll taxes and fringe benefits reported in the
payroll taxes and fringe benefit cost category must be classified to the
program operating cost category, the maintenance operating cost category, and
the administrative operating cost category based on direct identification or an
allocation using the ratio of allowable salary costs in each of those cost
categories to total allowable salary costs.
Statutory Authority: MS s
256B.501
