Current through Register Vol. 49, No. 13, September 23, 2024
Subpart
1.
Required cost reports.
No later than April 30 of each year, the provider shall submit
an annual cost report on forms supplied by the commissioner in order to receive
medical assistance payments. The reports must cover the reporting year ending
December 31, except that for reporting years ending on or after December 31,
1987, a provider operating a facility that is attached to a nursing home that
is reimbursed under parts
9549.0010 to
9549.0080 may elect to report the
facility's costs and statistical information for the period covered by the
nursing home's reporting year. If a certified audit has been prepared, it must
be submitted with the cost report. In addition, a provider or provider group
which has 48 or more licensed beds shall submit an annual certified audit of
its financial records obtained from an independent certified public accountant
or licensed public accountant. The examination must be conducted in accordance
with generally accepted auditing standards as adopted by the American Institute
of Certified Public Accountants and generally accepted accounting principles. A
government owned facility may comply with these auditing requirements by
submitting the audit report prepared by the state auditor.
Subp. 2.
Required information.
A complete annual cost report must contain the following
items:
A. General facility information
and statistical data as requested on the cost report form.
B. Reports of historical operating costs and
property related costs with supporting calculations and worksheets as requested
on the cost report form.
C. The
provider's balance sheet and income statement for each facility prepared in
accordance with generally accepted accounting principles unless audited
financial statements are required to be submitted according to subpart
1. If audited financial
statements are required, the facility must submit a copy of its audited
financial statements for the reporting year. The audited financial statements
must include a balance sheet, income statement, statement of retained earnings,
statement of changes in financial position, notes to the financial statements,
and supplemental information, as required of an audit conducted in accordance
with generally accepted auditing standards, and the certified or licensed
public accountant's opinion. If the financial statements are not sufficiently
detailed or the facility's fiscal year is different from the reporting year,
the facility shall provide supplemental information that reconciles costs on
the financial statements with the cost report.
D. A list of the provider's capital debts and
working capital loans outstanding for each facility during the reporting year,
the name of the lender, the term of the debt, the interest rate of the debt,
interest and principal payments for the current year, and the original amount
of each loan.
E. A schedule of the
provider's funded depreciation account for each facility.
F. A statement of ownership for the facility,
including the name, address, and proportion of ownership of each owner, or a
statement that no changes have been made since the last cost report.
If a privately held or closely held corporation or partnership
has an ownership interest in the facility, the facility must report the name,
address, and proportion of ownership of all owners of the corporation or
partnership who have an ownership interest of five percent or more, except that
any owner whose compensation or portion of compensation is claimed for
reimbursement in the facility's cost report must be identified regardless of
the proportion of ownership interest.
If a publicly held corporation has an ownership interest of 15
percent or more in the facility, the facility must report the name, address,
and proportion of ownership of all owners of the publicly held corporation who
have an ownership interest of ten percent or more.
G. A list of all related organizations which
included costs in the cost report in excess of $1,000 annually, and a list of
all facilities in the provider group.
H. Copies of purchase agreements and other
documents related to purchase of the physical plant and land, or a signed
statement that no changes have been made in the documents which are on file
with the department.
I. Copies of
leases and other documents related to the lease of the physical plant and land,
or a signed statement indicating that no changes have been made in the
documents on file with the commissioner. Lease documents must include
information on the historical capital cost of the physical plant and land, and
the information listed in item D as paid by the lessor.
J. Complete lapsing depreciation schedules
calculated in accordance with part
9553.0060.
K. Charts showing staff assignments
classified according to the cost categories in part
9553.0040. The charts must contain
the information specified in the cost report form.
L. Documentation of costs included in the
payment rate for approved services for very dependent persons with special
needs under parts
9510.1020 to
9510.1140. These costs must be
reported on an individual resident basis unless the special needs payment rate
was approved for more than one resident.
M. An explanation of all adjustments made by
the provider to the cost report and the applicable rule citations.
N. A breakdown of all costs included in the
related organization's management fees or central, affiliated, or corporate
office costs charged to the provider and the related organization's costs
allocable to the facility in accordance with part
9553.0030. The breakdown must
contain all costs of items as listed in part
9553.0040, subpart
3 except that related
organizations that have a federally approved cost allocation plan which has
been documented by the provider, may break down the management fee or central
office costs according to the approved plan. The supporting schedules must
include the related organization's or the central, affiliated, or corporate
office income statement; the cost allocated to each facility, related
organization, or nonrelated organization; and an explanation of the method of
allocation used.
Subp.
3.
Supplemental reports.
In order to substantiate the payment rate, the commissioner may
require the provider to provide items A to E:
A. Except as provided in subpart
1, separate, certified
audited financial statements, if they have been prepared, for each related
organization which include costs in the cost report in excess of $1,000
annually. If a certified audited financial statement is not available, then
unaudited financial statements must be submitted for that entity. The
commissioner may also require that the financial statements include a balance
sheet, income statement, statement of retained earnings, statement of change in
financial position, notes to the financial statements, and supplemental
information as required of an audit conducted in accordance with generally
accepted auditing standards.
B.
Copies of purchase agreements, consultant contracts, and other documents
related to the purchase or acquisition of equipment, goods, and
services.
C. Copies of leases and
other documents related to the lease of depreciable equipment, furnishings, and
goods. Lease documents include information on the historical capital cost of
the equipment, furnishings, and goods, and the information listed in subpart
2, item D as paid by the
lessor.
D. Access to federal and
state income tax returns for an individual, provider, or provider group having
an ownership interest in the facility as specified in subpart
2, item F.
E. Other relevant information required to
support a payment rate.
Subp.
4.
Method of accounting.
The accrual method of accounting in accordance with generally
accepted accounting principles consistently applied is the only method
acceptable for purposes of satisfying reporting requirements. If a government
owned facility demonstrates that the use of the accrual method of accounting is
not applicable to the facility, and that a cash or modified accrual method of
accounting more accurately reports the facility's financial operations, the
commissioner shall permit the provider to use a cash or modified accrual method
of accounting.
Subp. 5.
Records.
The provider must maintain statistical and accounting records
in sufficient detail to support the five most recent annual cost reports
submitted to the commissioner.
Subp.
6.
Conflicts.
If conflicts occur between parts
9553.0010 to
9553.0080 and generally accepted
accounting principles, then parts
9553.0010 to
9553.0080 shall prevail.
Subp. 7.
Certification of
reports.
Required reports must be accompanied by a signed statement
attesting to the accuracy of the information submitted on the required reports.
The statement must be signed either by the provider or, for a partnership, one
of the partners, or, for a corporation, the officer authorized to legally bind
the firm. If reports have been prepared by a person other than the above
individual, a separate statement signed by the preparer must also be
included.
Subp. 8.
Deadlines, extensions, and rejections.
Items A to C govern deadlines, extensions, and rejection of
reports.
A. The facility must submit
the required annual cost reports to the commissioner by April 30. The annual
cost report must cover the reporting year ending on December 31 of each year. A
facility that terminates participation in the medical assistance program during
a reporting year must submit the required annual cost report covering the
period from January 1 of that reporting year to the date of termination. The
annual cost report must be submitted within four months after
termination.
B. The commissioner
may reject any annual cost report filed by a facility that is incomplete or
inaccurate or may require supplemental information according to subpart
3. The corrected report or
the supplemental information requested must be returned to the commissioner
within 20 days of the request or the report must be rejected. The commissioner
shall extend this time if the facility submits a written request and if the
extension of time will not prevent the commissioner from establishing rates in
a timely manner. Except as provided in item C, failure to file the required
cost report and other required information or to correct the form of an
incomplete or inaccurate report shall result in the rejection of the cost
report and in a reduction of the payment rate as specified in subpart
10. Except as provided in
item C, failure to provide the additional information shall also result in a
reduction in the payment rate as specified in subpart
10 unless the total payment
rate can be calculated by the disallowance of the cost for which the additional
information was requested, in which case no rate reduction as specified in
subpart
10 shall occur.
C. Except for the copy of the lease
agreement, failure to provide the information in subpart
2, item I and subpart
3, item C when the lessor
refuses to provide the information shall not result in a reduction in the
payment rate as specified in subpart
10 if the lease or rental
agreement was arms-length in accordance with part
9553.0060, subpart
7, item B.
Subp. 9.
Effective date of
total payment rate.
The commissioner shall provide notice to each facility of its
total payment rate by September 1 of each year. The total payment rate is
effective from October 1 of that year to September 30 of the following
year.
Subp. 10.
Noncompliance.
A facility's failure to comply with reporting requirements
subjects the facility to items A to C.
A. If a facility fails to provide reports,
documentation, and worksheets required in this part, the commissioner shall
reduce the facility's total payment rate to 80 percent of the total payment
rate as provided in item B.
B. The
reduced total payment rate is effective:
(1)
21 days after a written request for additional information under subpart
8, item B is sent by the
commissioner, except when an extension has been granted pursuant to that
subpart;
(2) for failure to provide
the information required in subpart
1,
2, or
7, on April 30; or 21 days
after a written request for the correction or completion of inaccurate reports
or financial statements or at the expiration of such further time period as the
commissioner may allow under subpart
8, item B.
C. Reinstatement of the total
payment rate upon remedy of the failure or inadequacy is retroactive.
Subp. 11.
Audits.
Facility audits are subject to items A to C.
A. The department shall subject reports and
supporting documentation to desk and field audits to determine compliance with
parts
9553.0010 to
9553.0080. Retroactive adjustments
may be made as a result of desk or field audit findings. If the audits reveal
inadequacies in facility record keeping or accounting practices, the
commissioner may require the facility to engage competent professional
assistance to correct those inadequacies within 90 days of the written
notification by the commissioner so that the field audit may proceed.
B. Field audits may cover the four most
recent annual cost reports for which desk audits have been completed and
payment rates have been established. The field audit must be an independent
review of the facility's cost report. All transactions, invoices, or other
documents that support or relate to the costs claimed on the annual cost
reports are subject to review by the field auditor.
C. A field audit shall be completed within 90
days after commencement for a provider with a single facility or within 180
days for a provider group.
Subp.
12.
Suspension of audit.
The commissioner may suspend a field audit for good cause or if
the provider's books and records are unavailable or unauditable. The
commissioner shall notify the provider in writing when a field audit is
suspended. If the field audit is suspended, the commissioner shall indicate in
writing the date the field audit will again commence. If the field audit is
suspended because the provider's books and records are unavailable or
unauditable, the commissioner shall follow the procedures in subpart
11, item A. The deadline for
completion of the field audit must be extended by the length of the
suspension.
Subp. 13.
Adjustments.
Adjustments to the total payment rate may be made as a result
of desk or field audit findings or subject to part
9553.0050, subpart
3. Desk or field audit
adjustments are made according to items A to G.
A. Field audit adjustments must be made only
if the adjustment would result in at least a five cent per resident day or
$2,000 cost change, whichever is less.
B. Retroactive adjustments to the facility's
total payment rate must be made as a result of desk and field audit findings,
except that field audit adjustments shall be limited by the restrictions in
item A.
C. If the adjustment
results in a payment from the provider, payment must be made by the provider
within 120 days after the date of the written notice. If the payment rate
adjustment results in a payment to the provider, the medical assistance program
payment to the provider must be made within 120 days after the date of the
written notice. Interest charges must be assessed on balances outstanding after
120 days of written notification to the provider.
D. If an appeal has been filed under part
9553.0080, any payments owed by
the provider or by the commissioner must be made within 120 days of the written
notification to the provider of the commissioner's ruling on the appeal.
Interest charges must be assessed on balances outstanding after 120 days of
written notification of the commissioner's ruling on the appeal.
E. The annual interest rate charged in items
C and D must be the rate charged by the commissioner of the Minnesota
Department of Revenue for late payment of taxes, which is in effect on the
121st day after the written notification.
F. Any changes, adjustments, or amendments
which result in a reimbursement to the facility shall be subject to the
limitations in part
9553.0070, subpart
2.
G. Adjustments to the payment rate are
limited to the four complete reporting years preceding the date on which an
audit commences. Changes in the total payment rate which result from desk or
field audit adjustments to cost reports for reporting years beyond the four
most recent annual cost reports, must be made to the four most recent annual
cost reports, the current cost report, and future cost reports to the extent
that those adjustments affect the total payment rate established by those
reporting years.
Subp.
14.
Amended reports.
Amendments to previously filed annual cost reports are governed
by items A to E.
A. Facilities may
file amendments to previously filed cost reports when errors or omissions in
the annual cost report are discovered which would result in at least a five
cent per resident day or $2,000 adjustment, whichever is less for each
reporting year.
B. The commissioner
shall make retroactive adjustments to the total payment rate of an individual
facility if the amendment is filed within 14 months of the original cost report
to be amended. An error or omission for purposes of this item does not include
a facility's determination that a prior choice between alternative methods of
reporting costs permitted under the rules was not advantageous and should be
changed. Errors or omissions which do not meet the threshold amount required
for amended cost reports, or errors or omissions discovered after the 14-month
time limitation specified herein, may be claimed at the time of the field
audit.
C. Providers must not amend
a previously filed cost report for the purpose of removing costs of services
for which the facility seeks separate billing.
D. The amended cost report must consist of
the corrected cost report pages resulting in the amendment and supporting
documentation. The corrections or changes must be calculated according to parts
9553.0010 to
9553.0080.
E. Providers can file no more than two
amendments to a previously filed cost report in which they have found errors or
omissions.
Subp. 15.
False reports.
If a provider knowingly supplies inaccurate or false
information in a required report that results in an overpayment, the
commissioner shall do one or more of the following:
A. immediately adjust the facility's payment
rate to recover the entire overpayment;
B. terminate the commissioner's agreement
with the provider; and/or
C.
prosecute under applicable state or federal laws.
Subp. 16.
Reporting real estate taxes,
special assessments, and insurance.
The facility shall submit a copy of its statement of real
estate taxes payable for the calendar year in which the rate year begins and a
copy of the invoices for the real estate insurance and professional liability
insurance for coverage during the rate year by June 30 each year. Except as
provided in this subpart, the commissioner shall disallow the costs of real
estate taxes, special assessments, real estate insurance, and professional
liability insurance, if the documentation is not submitted by July 31. The
disallowance shall remain in effect until the facility provides the
documentation and amends the cost report under subpart
14. The historical operating
cost for the special operating costs during the reporting year must be shown on
the cost report.
Statutory Authority: MS s
256B.501
