Current through Supplement No. 394, October, 2024
1. Several items of
income must be considered as offsets against various costs as recorded in the
books of the facility. Income in any form received by the facility must be
offset up to the total of the appropriate actual allowable costs, with the
following exceptions:
a. An established
rate;
b. Income from payments made
under the Workforce Investment Act;
c. Bed reduction incentive
payments;
d. Donations;
e. The deferred portion of patronage
dividends credited to the facility and not previously offset;
f. Charges for private rooms or special
services;
g. Noncovered bed hold
days; or
h. Sales tax revenue
received from a political subdivision or local taxing authority for a facility
located in a community with a population of less than twelve thousand five
hundred people.
2. If
actual costs are not identifiable, income must be offset up to the total of
costs described in this section. If costs relating to income are reported in
more than one cost category, the income must be offset in the ratio of the
costs in each cost category. Sources of income include:
a. "Activities income". Income from the
activities department and the gift shop must be offset to activity
costs.
b. "Dietary income". Amounts
received from or on behalf of employees, guests, or other nonresidents for
lunches, meals, or snacks must be offset to dietary and food costs.
c. "Drugs or supplies income". Amounts
received from employees, doctors, or others not admitted as residents must be
offset to nursing supplies. Medicare part B income for drugs and supplies must
be offset to nursing supplies.
d.
"Insurance recoveries income". Any amount received from insurance for a loss
incurred must be offset against the appropriate cost category, regardless of
when or if the cost is incurred, if the facility did not adjust the basis for
depreciable assets.
e. "Interest or
investment income". Interest received on investments, except amounts earned on
funded depreciation or from earnings on gifts where the identity remains
intact, must be offset to interest expense.
f. "Laundry income". All amounts received for
laundry services rendered to or on behalf of employees, doctors, or others must
be offset to laundry costs.
g.
"Private duty nurse income". Income received for the providing of a private
duty nurse must be offset to nursing salaries.
h. "Rentals of facility space income". Income
received from outside sources for the use of facility space and equipment must
be offset to property costs.
i.
"Telephone income". Income received from residents, guests, or employees must
be offset to administration costs. Income from emergency answering services
need not be offset.
j. "Therapy
income". Except for income from Medicare part A, income from therapy services
must be offset to therapy costs unless the provider has elected to make therapy
costs nonallowable under subsection 40 of section
75-02-06-12.1.
k. "Vending income". Income from the sale of
beverages, candy, or other items must be offset to the cost of the vending
items or, if the cost is not identified, all vending income must be offset to
the cost category where vending costs are recorded.
l. "Bad debt recovery". Income for bad debts
previously claimed must be offset to property costs in total in the year of
recovery.
m. "Other cost-related
income". Miscellaneous income, including amounts generated through the sale of
a previously expensed or depreciated item, such as supplies or equipment, or
the amount related to the default of a contractual agreement related to
education expense assistance, must be offset, in total, to the cost category
where the item was expensed or depreciated.
n. "Medicare part B income". Income from
Medicare part B must be offset to the cost category where the expense is
recorded. Medicare part B therapy income must be offset unless the provider has
elected to make therapy costs nonallowable under subsection 39 of section
75-02-06-12.1.
3. Payments to a provider by its
vendor must ordinarily be treated as purchase discounts, allowances, refunds,
or rebates, even though these payments may be treated as "contributions" or
"unrestricted grants" by the provider and the vendor. Payments that represent a
true donation or grant need not be treated as purchase discounts, allowances,
refunds, or rebates. Examples of payments that represent a true donation or
grant include contributions made by a vendor in response to building or other
fundraising campaigns in which communitywide contributions are solicited or
when the volume or value of purchases is so nominal that no relationship to the
contribution can be inferred. The provider shall provide verification,
satisfactory to the department, to support a claim that a payment represents a
true donation.
4. When an owner,
agent, or employee of a provider directly receives from a vendor monetary
payments or goods or services for the owner's, agent's, or employee's own
personal use as a result of the provider's purchases from the vendor, the value
of the payments, goods, or services constitutes a type of refund or rebate and
must be applied as a reduction of the provider's costs for goods or services
purchased from the vendor.
5. When
the purchasing function for a provider is performed by a central unit or
organization, all discounts, allowances, refunds, and rebates must be credited
to the costs of the provider and may not be treated as income by the central
unit or organization or used to reduce the administrative costs of the central
unit or organization.
6. Purchase
discounts, allowances, refunds, and rebates are reductions of the cost of
whatever was purchased.
7. For
purposes of this section, "Medicare part B income" means the interim payment
made by Medicare during the report year plus any cost settlement payments made
to the provider or due from the provider for previous periods which are made
during the report year and which have not been reported to the department prior
to June 30, 1997.
General Authority: NDCC 50-24.1-04,
50-24.4-02
Law Implemented: NDCC 50-24.4;
42 USC
1396a(a)(13)
