New Mexico Administrative Code
Title 8 - SOCIAL SERVICES
Chapter 312 - LONG TERM CARE SERVICES - NURSING SERVICES
Part 3 - COST RELATED REIMBURSEMENT OF NURSING FACILITIES
Section 8.312.3.7 - DEFINITIONS

A. Accrual basis of accounting: Under the accrual basis of accounting, revenue is recorded in the period when it is earned, regardless of when it is collected. The expenditures for expense and asset items are recorded in the period in which they are incurred, regardless of when they are paid.

B. Allocable costs: An item or group of items of cost chargeable to one or more objects, processes, or operations in accordance with cost responsibilities, benefits received, or other identifiable measure of application or consumption.

C. Applicable credits: Those receipts or types of transactions which offset or reduce expense items that are allocable to cost centers as direct or indirect costs. Typical examples of such transactions are: purchase discounts, rebates, or allowances; recoveries or indemnities on losses; sales of scrap or incidental services; adjustments of over-payments or erroneous charges; and other income items which serve to reduce costs. In some instances, the amounts received from the federal government to finance hospital activities or service operations should be treated as applicable credits.

D. Cash basis of accounting: Under the cash basis of accounting, revenues are recognized only when cash is received and expenditures for expense and asset items are not recorded until cash is disbursed for them.

E. Charges: The regular rates established by the provider for services rendered to both beneficiaries and to other paying patients whether inpatient or outpatient. The rate billed to the department shall be the usual and customary rate charged to all patients.

F. Closed facility: A facility which has been either voluntarily or involuntarily terminated from participation in the medicaid program not to include termination for construction of a replacement facility.

G. Cost center: A division, department, or subdivision thereof, a group of services or employees or both, or any other unit or type of activity into which functions of an institution are divided for purposes of cost assignment and allocations.

H. Cost finding: A determination of the cost of services by the use of informal procedures, i.e., without employing the regular processes of cost accounting on a continuous or formal basis. It is the determination of the cost of an operation by the allocation of direct costs and the proration of indirect costs.

I. Facility: The actual physical structure in which services are provided.

J. General service cost centers: Those cost centers which are operated for the benefit of other general service areas as well as special or patient care departments. Examples of these are: housekeeping, laundry, dietary, operation of plant, maintenance of plant, etc. Costs incurred for these cost centers are allocated to other cost centers on the basis of services rendered.

K. Governmental institution: A provider of services owned and operated by a federal, state or local governmental agency.

L. Imputed occupancy: The level of occupancy attributed for the purpose of calculating the reimbursement rate.

M. Inpatient cost centers: Cost centers established to accumulate costs applicable to providing routine and ancillary services to inpatients for the purposes of cost assignment and allocation.

N. Owner: The entity holding legal title to the facility.

O. Provider: The entity responsible for the provision of services. The provider must have entered into a valid agreement with the medicaid program for the provision of such services.

P. RCC: This is the ratio of charges to charges. The bases or charges used in the RCC formula vary as to the costs to be allocated. The ratios may be expressed as follows:

Q. Related organization: Organizations related to the provider by common ownership or control as defined by the provisions of the medicare provider reimbursement manual (HIM-15).

R. Replaced facility: The facility replaced by a replacement facility as defined above.

S. Replacement facility: A facility which replaces a facility that was participating in medicaid on July 1, 1984, or whose construction received Section 1122 approval by July 1, 1984, and where the basic structure of the facility to be replaced is at least 25 years old and has been in continuous use as a skilled nursing or intermediate care facility for at least 25 years or which facility has been destroyed by catastrophic occurrence and rendered unusable and irreparable, or condemned by eminent domain.

T. Special service cost centers: Commonly referred to as ancillary cost centers. Such centers usually provide direct identifiable services to individual patients, and include departments such as the physical therapy and supply departments.