Ala. Admin. Code r. 560-X-22-.10

Current through Register Vol. 43, No. 1, October 31, 2024

Section 560-X-22-.10 - Management And Administrative Costs

(1) Costs of a management or administrative nature, including but not limited to those costs outlined in Rule 560-X-22-.10(3), will be reported as such on the Medicaid Cost Report. Salaries of administrative personnel which would duplicate employee salary expenses in other cost centers cannot be allocated to such nonadministrative cost centers.

(2) Customarily, owner compensation results from a distribution of the profits. However, when the owner provides a necessary service to the facility, he/she can justifiably be compensated at a reasonable rate, then that owner compensation is an allowed cost. "Reasonable compensation" must meet the criteria of being paid to an employee who performs a necessary function in a facility and must be in an amount which would ordinarily be paid for comparable services in a comparable facility. To be "necessary," a function must be one that if that employee were not performing it, another would have to be employed to do so, and, additionally, the function must be directly related to providing nursing facility services.

(3) Examples of Allowable Management and Administrative Costs include, but are not limited to:

(a) Salaries and Bonuses:

1. Administrator.

2. Assistant Administrator.

3. Accountant.

4. Bookkeeper.

5. Computer Operator.

6. Medical Records Clerk.

7. Personnel Officer.

8. Secretary.

9. Typist.

10. Clerks.

11. Receptionist.

12. Telephone/Operator/Switchboard.

(b) Legal Fees (Legal fees related to patient care, except those specified in Rule 560-X-22-.22).

(c) Consultants - Medical Records.

(d) Outside Accounting and Auditing:

1. Routine Bookkeeping.

2. Preparation of costs reports.

3. Auditing and related statement.

(e) Data Processing:

1. Owned.

2. Rented.

3. Outside purchased service.

(f) Professional Development.

(g) Supplies:

1. General administration.

2. Medical records.

(h) Telephone Expense - Subject to limitations in Rule 560-X-22-.22(3)(v).

(i) License:

1. Business.

2. Administrator's.

3. Direct care professional staff (to be reported in the appropriate functional cost center).

4. Professional staff if their employment negates the need for contracting with a consultant (to be reported in the appropriate functional cost center).

(j) Insurance: Professional Malpractice and related deductibles.

(k) Employee Benefits - Administrative Employees:

1. Group Life.

2. Group Health.

3. FICA.

4. SUI.

5. FUTA.

6. Deferred Compensation Plans, Pension and Profit-Sharing, approved by IRS.

7. Workman's Compensation Insurance.

(l) Advertising:

1. Telephone, local.

2. Employment ads.3. Public Relations ads (not in excess of $100 per fiscal year).

(m) Postage.

(n) Management Home Office Cost (chain operation):

1. Management and administrative salaries and benefits. (To be reported on lines D5-1 and D5-2 as appropriate).

2. All building costs, including but not limited to: (To be reported on line D5-17).

(i) Insurance.

(ii) Rent.

(iii) Lease.

(iv) Utilities.

(v) Depreciation.

(vi) Interest.

(o) Interest Expense on working capital loans, subject to limitations contained in Rules 560-X-22-.11, 560-X-22-.22.

(p) Management fees not exceeding the cost of the provider of the services and not excluded under Rule 560-X-22-.22(3)(a).

Ala. Admin. Code r. 560-X-22-.10

Rule effective 10/1/1982. Amended effective 5/15/1983. This amendment will apply for cost reports for the fiscal year ending 6-30-83. Amended effective 10/1/1990. Emergency rule effective 9/12/1991. Amended effective 12/12/1991.

Author: Susan Mims

Statutory Authority: State Plan; Title XIX, Social Security Act; 42 C.F.R. §§ 447.200 - .272, et seq.