Current through Register Vol. 18, September 20, 2024
(1) This rule
applies for purposes of determining allowable costs for cost reporting periods
beginning on or after July 1, 1991. Allowable costs for cost reporting periods
beginning prior to July 1, 1991 will be determined in accordance with rules for
allowable costs then in effect.
(2) For purposes of reporting and determining
allowable costs, the department hereby adopts and incorporates herein by
reference the Provider Reimbursement Manual (PRM-15) , published by the United
States Department of Health and Human Services, Social Security Administration,
which provides guidelines and policies to implement Medicare regulations and
principles for determining the reasonable cost of provider services furnished
under the Health Insurance for Aged Act of 1965, as amended. A copy of the
PRM-15 may be obtained through the Department of Public Health and Human
Services, Senior and Long Term Care Division, P.O. Box 4210, 111 N. Sanders,
Helena, MT 59604-4210. Applicability of the PRM-15 is subject to the exceptions
and limitations specified in this rule.
(a)
The term "allowable costs" means costs which are allowable under the provisions
of this subchapter and which are considered in determining the costs of
providing Medicaid nursing facility services. The determination that a cost is
an allowable cost does not require the department to reimburse the provider for
that cost. Providers will be reimbursed only as specifically provided in these
rules.
(3) For purposes
of reporting costs as required in ARM
37.40.346, allowable costs will be
determined in accordance with the PRM-15, subject to the exceptions and
limitations provided in these rules, including but not limited to the
following:
(a) Return on net invested equity
is an allowable cost only for providers of intermediate care facility services
for individuals with intellectual disabilities which provide services on a
for-profit basis.
(b) Allowable
property costs are limited as follows:
(i)
The capitalized costs of movable equipment are not allowable in excess of the
fair market value of the asset at the time of acquisition.
(ii) Property-related interest, whether
actual interest or imputed interest for capitalized leases, is not allowable in
excess of the interest rates available to commercial borrowers from established
lending institutions at the date of asset acquisition or at the inception of
the lease.
(iii) Leases must be
capitalized according to generally accepted accounting principles.
(iv) Depreciation of real property and
movable equipment must be in accordance with American hospital association
guidelines. Depreciation of real property and movable equipment based upon
accelerated cost recovery guidelines is not an allowable cost.
(v) In accordance with sections 1861(v) (1)
(O) and 1902(a) (13) of the Social Security Act, allowable property costs shall
not be increased on the basis of a change in ownership which takes place on or
after July 18, 1984. Section 1861(v) (1) (O) and section 1902(a) (13) of the
Social Security Act are hereby adopted and incorporated herein by reference.
The cited statutes are federal statutes governing allowability of certain
facility property costs for purposes of Medicare and Medicaid program
reimbursement. Copies of these sections may be obtained through the Department
of Public Health and Human Services, Senior and Long Term Care Division, P.O.
Box 4210, 111 N. Sanders, Helena, MT 59604-4210.
(c) Administrator compensation is allowable
only as determined according to the PRM-15 provisions relating to owner
compensation, and as specifically limited in this rule.
(i) For purposes of reporting and determining
allowable administrator compensation, administrator compensation includes:
(A) all salary paid to the administrator for
managerial, administrative, professional or other services;
(B) all employee benefits except employer
contributions required by state or federal law for FICA, workers' compensation
insurance (WCI) , federal unemployment insurance (FUI) , and state unemployment
insurance (SUI);
(C) all deferred
compensation either accrued or paid;
(D) the value of all supplies, services,
special merchandise, and other valuable items paid or provided for the personal
use or benefit of the administrator;
(E) wages of any provider employee to the
extent such employee works in the home of the administrator;
(F) the value of use of an automobile owned
by the provider business to the extent used by the administrator for uses not
related to patient care;
(G)
personal life, health, or disability insurance premiums paid by the provider on
the administrator's behalf;
(H) the
rental value of any portion of the facility occupied by the administrator as a
personal residence;
(i) the value of any
other remuneration, compensation, fringe, or other benefits whether paid,
accrued, or contingent.
(d) Allowable costs include employee benefits
as follows:
(i) Employee benefits are defined
as amounts accrued on behalf of an employee, in addition to direct salary or
wages, and from which the employee or his beneficiary derives a personal
benefit before or after the employee's retirement or death, if uniformly
applicable to all employees. An item is an employee benefit only if it directly
benefits an individual employee and does not directly benefit the owner,
provider, or related parties.
(ii)
Employee benefits include all employer contributions which are required by
state or federal law, including FICA, WCI, FUI, SUI.
(iii) Costs of recreational activities or
facilities available to employees as a group, including but not limited to
condominiums, swimming pools, weight rooms and gymnasiums, are not
allowable.
(iv) For purposes of
this rule, an employee is one from whose salary or wages the employer is
required to withhold FICA. Stockholders who are related parties to the
corporate providers, officers of a corporate provider, and sole proprietors and
partners owning or operating a facility are not employees even if FICA is
withheld for them.
(v) Accrued
vacation and sick leave are employee benefits if the facility has in effect a
written policy uniformly applicable to all employees within a given class of
employees, and are allowable to the extent they are reasonable in
amount.
(e) Bad debts,
charitable contributions and courtesy allowances are deductions from revenue
and are not allowable costs.
(f)
Revenues received for services or items provided to employees and guests are
recoveries of cost and must be deducted from the allowable cost of the related
items.
(g) Dues, membership fees,
and subscriptions to organizations unrelated to the provider's provision of
nursing facility services are not allowable costs.
(h) Charges for services of a chaplain are
not an allowable cost.
(i) Subject
to (4) , fees for management or professional services (e.g., management, legal,
accounting or consulting services) are allowable to the extent they are
identified to specific services and the hourly rate charged is reasonable in
amount. In lieu of compensation on the basis of an hourly rate, allowable costs
may include compensation for professional services on the basis of a reasonable
retainer agreement which specifies in detail the services to be performed.
Documentation that such services were in fact performed must be maintained by
the provider. If the provider elects compensation under a retainer agreement,
allowable costs for services specified under the agreement are limited to the
agreed retainer fee.
(j) Travel
costs and vehicle operating expenses related to resident care are allowable to
the extent such costs are reasonable and adequately documented.
(i) Vehicle operating costs will be allocated
between business and personal use based on actual mileage logs, a percentage
derived from a sample mileage log and pre-approved by the department, or any
other method pre-approved by the department.
(ii) For vehicles used primarily by an
administrator, any portion of vehicle costs allocated to personal use shall be
included as administrator compensation and subject to the limits specified in
(3) (c) .
(iii) Allowable costs
include automobile depreciation calculated on a straight-line basis, subject to
salvage value, with a minimum of a three-year useful life. The total of
automobile depreciation and interest, or comparable lease costs will not be
allowable in excess of $7,500 per year.
(iv) Public transportation costs will be
allowable only at tourist or other available commercial rate (not first class)
.
(k) Allowable costs
for purchases, leases or other transactions between related parties are subject
to the following limitation:
(i) Allowable
cost of services, facilities and supplies furnished to a provider by a related
party or parties shall not exceed the lower of costs to the related party or
the price of comparable services, facilities or supplies obtained from an
unrelated party. A provider must identify such related parties and costs in the
annual cost report.
(4) Costs, including attorney's fees, in
connection with court or administrative proceedings are allowable only to the
extent that the provider prevails in the proceeding. Where such proceedings are
related to specific reimbursement amounts, the proportion of costs which are
allowable shall be the percentage of costs incurred which equals the percentage
derived by dividing the total cost or reimbursement on which the provider
prevails by the total cost or reimbursement at issue.
AUTH:
53-2-201,
53-6-113,
MCA; IMP:
53-6-101,
53-6-113,
MCA
