D.C. Mun. Regs. tit. 29, r. 29-972
The standards established in this section are to provide guidance in determining whether certain cost items will be recognized as allowable base year costs. In the absence of specific instructions or guidelines, each facility shall follow the principles and instructions set forth in the Medicare Provider's Reimbursement Manual.
Bed Occupancy Allowance - For purposes of calculating the base year cost, each facility shall maintain at a minimum an average annual occupancy rate of 85%. For each facility with less than an 85% occupancy rate, the bed occupancy allowance shall be computed using an 85% factor instead of the lower, actual percentage of occupancy. A reserved bed paid under Medical Assistance shall be counted as an occupied bed. The occupancy level adjustment is applicable to fixed costs, such as depreciation, rent, interest, insurance and taxes. The occupancy level adjustment does not apply to variable costs such as staffing and food, since these costs decrease as the occupancy level decreases.
General Administrative Salaries - Salaries of the facility's administrator, comptroller, purchasing agent, personnel director and other persons performing general supervision or managements duties shall be included for consideration as allowable costs. If the owners of a facility perform management duties on a full or part-time basis, their salary may be included to the extent their time is documented. Compensation to an owner includes salary paid on a current or deferred basis.
Nursing Care Allowance - The minimum staffing standards for classes of nursing personnel shall comply with the requirements as specified in 42 C.F.R. §§442 and 483, D.C. Law 5-48, and Chapter 35 of Title 22 of the District of Columbia Municipal Regulations.
General Management and Consulting Fees - These items shall be included in the costs of general administration. These costs will be allowed and evaluated on the basis of reasonable and customary fees for such services.
Volunteer Services and Donated Services - Volunteer or religious organizations may donate the services of individuals to serve on a regularly scheduled basis in positions customarily held by full time employees to provide normal patient care or assist in the operation of the facility. Actual costs to the facility for maintaining or utilizing the services of such individuals will be considered as an allowable cost. The actual costs for these services shall be supported by documented expenditures for payments made for maintaining such individuals.
Physical Therapy and Rehabilitative Services - The cost of physical therapy and rehabilitative maintenance services including occupational therapy and speech therapy provided by persons employed on an hourly or salary basis under contract with the facility will be considered as an allowable cost when such treatment is ordered by a physician. However, these costs shall not include such services and payments covered by Medicare Part B or any payments on a fee-for-service basis.
Physician Services - The cost of physician services shall be allowed if required for maintaining the quality of medical services. Examples include the medical director and patient medical services provided by staff physicians. Payment for independent and group practice physician fees for services provide. to Medicaid patients, which are reimbursed separately from payments made to ICFs/MR, shall be excluded
Drug Services - All drugs furnished by a facility shall be based on a physician's written order or prescription; administered judiciously; and limited to the medical necessity of the patient. All drugs administered to a patient shall be recorded timely on the patient's chart. A facility shall not be reimbursed for prescription drugs dispensed to Medicaid patients which are filled by a pharmacy at the request of a patient. A facility shall be reimbursed for drugs ordered or refilled from a pharmacy for a Medicaid patient and administered to another patient or drugs purchased and administered after discharge or death of a patient. Medicaid patients in ICFs/MR shall receive routine and emergency drug prescriptions through their outpatient drug benefits. Drugs which are not covered by the outpatient drug benefit which would otherwise be allowable are included in the inpatient per diem rate.
Utilization and Medical Review and Program Audits - All services mandated by federal and District rules governing utilization reviews, medical reviews and program audits may be included under "Utilization Review" as a separate item for purposes of reimbursement.
Reimbursement of Capital-Related Costs Resulting from a Change in Ownership - For purposes of establishing an appropriate allowance for depreciation, interest on capital indebtedness, and return on equity capital for an asset obtained by during a change of ownership, the valuation of the asset after such change of ownership shall be the lesser of the allowable acquisition cost of the asset to the owner of record on July 18, 1984, or the acquisition cost of the asset to the new owner.
Depreciation on capital assets, including assets for normal, standby or emergency use is an allowable cost subject to the following conditions:
The fixed asset records shall include:
Interest shall be allowed subject to the following conditions:
Bad debts shall not be recognized as an allowable cost.
Costs pertaining to raising funds for operating expenses and cash flow shall be recognized as an allowable expense up to 10% of the amount raised.
A related organization can furnish services and supplies to a facility under the prudent buyer concept, provided the costs of such services and supplies are consistent with costs of such items furnished by independent third party providers in the same geographic area.
Reasonable rental expense shall be an allowable cost for leasing of a facility from a non-related party if it is an arm's length transaction.
The purchase or rental by a facility of any property, plant, equipment, services, and supplies shall not exceed the cost that a prudent buyer would pay in the open market to obtain these items.
D.C. Mun. Regs. tit. 29, r. 29-972