La. Admin. Code tit. 50 § II-10151
Current through Register Vol. 50, No. 11, November 20, 2024
Section II-10151 - Cost ReportsA. Initial Cost Report. The initial cost report submitted by all providers of Long Term Care services under the Medicaid Program shall be based on the most recent fiscal year end.1. An exception to the initial cost report requirement may be recognized on an individual basis upon request by the provider prior to the due date. If an exception is allowed, the provider shall attach to the cost report a statement fully describing the nature of the exception for which written permission was requested and granted.2. For the initial reporting period only, the provider may allocate costs to the various cost centers on a reasonable basis if the required departmental cost breakdown is not available.B. Subsequent Cost Reports. Subsequent cost reports shall be submitted annually by each provider within 90 days of the close of its normal fiscal year end.C. Changes of Ownership. In the event of a change in ownership of the facility, the old entity operating the facility shall be required to submit a final cost report from the date of its last fiscal year end to the date of sale or lease. 1. If the new legal entity continues the operations of the facility as a provider of Medicaid services, the new legal entity shall be required to furnish the BHSF-HSS with an initial cost report from the date of purchase or lease to the new fiscal year end selected by the new legal entity. EXAMPLE: Ms. New purchased Facility A from Mr. Old on September 1, 1985. Facility A's fiscal year end prior to the sale was December 31. Mr. Old is required to file a cost report for the period January 1, 1985 through August 31, 1985. If Ms. New decides to change Facility A's fiscal year end to June 30, her first report shall be due for the 10 month period ending June 30, 1986 and annually thereafter.
a. Furthermore, when a facility changes ownership on or after October 1, 1985, the Consolidated Omnibus Budget Reconciliation Act limits evaluation of facility assets to the acquisition costs of the previous owner increased by 50 percent of the Consumer Price Index or 50 percent of Nursing Facility Construction Cost Index, whichever is lower.b. In auditing cost reports, DHH will apply this HIM-15 regulation in determining actual cost applicable to sales.c. If full disclosure of the facts has not been made to the Department of Health and Hospitals and the Department of Health and Hospitals approves a transaction, such approval is qualified on the basis of the facts presented. Any questions concerning a relatedness situation should be directed in writing to Bureau of Health Services Financing.2. New Facilities a. A new facility is defined as a newly constructed facility, a facility not currently participating in the Medicaid program or a Medicaid program facility which has been certified for a higher level of care.b. A new facility may select an initial cost reporting period of at least one month but not to exceed 13 months.c. Thereafter, the cost reports shall be submitted as in subsequent cost reports described above. EXAMPLE: A new facility began Medicaid participation on September 15, 1985. The owner wishes to adopt a reporting period ending September 30. The owner must file a report for the period September 15, 1985 to September 30, 1986. He/She cannot file a report for the 15-day period ending September 30, 1985.
Note: Facilities purchased as ongoing concerns are not considered new facilities for Medicaid purposes.
3. Final Cost Reports. When a provider ceases to participate in the Medicaid Program, he/she must file a cost report covering a period up to the effective date the facility ceases to participate in the program. Depending upon the circumstances involved in the preparation of the provider's final cost report, the provider may file for a period not less than one month and not more than 13 months.4. Due Date Extensions. If the facility experiences unavoidable difficulties in preparing its cost report by the prescribed due date, one 30 day extension may be permitted upon written request to the Bureau of Health Services Financing Medicaid Program prior to the due date. Extensions beyond the 30 day time limit may be approved for situations beyond the facility's control. An extension of the cost report due date cannot be granted when the provider agreement is terminated or a change in ownership occurs.5. Basis of Accounting. a. All cost report information shall be submitted in accordance with generally accepted accounting principles (GAAP) as well as state and federal regulations. The accrual method of accounting is the only acceptable method for private providers. State institutions shall be allowed to submit data on the cash basis.b. General ledger accounts should follow the Chart of Accounts previously provided each participating facility.8. Related Party Transactions. Chapter 10 of HIM-15 explains the treatment of cost(s) applicable to services, facilities, and supplies provided to the facility by organizations related by common ownership or control. The Medicaid Cost Report can only include the actual cost(s) to the related organization for those services, facilities, and supplies. The cost(s) must not exceed the price of comparable services, facilities, or supplies that could be purchased elsewhere.9. Cost Report Form. The cost report form shall be used by all private providers of nursing facility services. State institutions shall use the same form with additional information for covered ancillary services. All providers shall determine allowable costs utilizing the Standards for Payment Manual and the Medicare Provider Reimbursement Manual (HIM-15) instructions provided with the cost report form.10. Financial Records. All providers who elect to participate in the Medicaid Program shall maintain all financial and statistical information necessary to substantiate cost data for three years following submission of the cost report or until all audit exceptions are resolved, whichever period is longer. All providers are required to make these records available upon demand to representatives of the state or federal health agencies or their contractual representatives.11. Allowable Costs a. Allowable costs for reimbursement to Long Term Care Facilities providing services under Medicaid shall follow the general provisions outlined in the HIM-15.b. For costs to be allowable, they must be reasonable and related to resident care. The reasonableness of all allowable costs shall be assessed by the BHSF with input from the Audit Contractor, industry representatives, and other interested parties.c. Allowable cost limits are listed below. More comprehensive explanations of these allowable costs are included in the HIM-15.12. Salaries. Allowable costs for salaries for Administrator, Assistant Administrator, and other facility managers are limited to the maximum set by the state based on the audit contractors review of cost reports statewide, regardless of the size of the nursing facility.13. Related Travel Expenses. Reasonable travel expenses are allowable only as related to administration of the facility and resident care.14. Insurance. Insurance rates are allowable for ordinary and necessary coverage and shall be limited to a reasonable price in addition to any interim increases initiated by the insurance company.15. Interest. Necessary and proper interest on both current and capital indebtedness is allowable and shall be limited to that which can be specifically related to the purchase of an asset or is necessary for the operation of the facility.16. Motor Vehicles. Depreciation and interest expenses are allowable for certain types of motor vehicles if limited to the statewide average list price published at the beginning of each fiscal year by the Bureau of Health Services Financing. This list includes a new standard size auto or van depreciated over 36 months at the prevailing new auto interest rate charged by lending institutions. a. Lease costs are limited to charges over 36 months by bank-related leasing companies or actual lease costs, whichever is less.b. Vehicle taxes, tags, titles and insurance charges may be claimed as an allowable cost in the year paid.c. All use of such vehicles shall be related to patient care or administration of the facility.d. The following types of vehicles are specifically disallowed: i. recreational vehicles;ii. pickup trucks equipped for camping; andiii. airplanes and boats.17. Rent. Rents paid to unrelated parties in accordance with HIM-15 are allowable costs. Rental payments between related parties are not allowable costs. Costs of ownership, such as depreciation, interest, etc. may be included in the cost report.18. Dues. Reasonable dues to one professional trade association or organization are considered an allowable cost.19. Management Fees and Central Office Overhead a. Contracts for management services are allowable costs. They shall specify exactly what services are covered by the fee.b. The charges by a related management firm are limited to actual cost which shall not exceed what the service would cost from unrelated management companies. Note: If a facility's management fees/central office overhead costs are the results of related party transactions, the provider shall submit a separate cost report for the related management company/central office. Salaries shall be limited to Civil Service maximums.
20. Nurse Assistant Training. There shall be a supplemental cost report for nurse aide training and these costs shall not be included in the regular cost report.21. Owner's Compensation. All types of owners' compensation costs are allowable based on the following limitations. a. The position filled by the owner is normal to the industry.b. The salary paid to the owner is in line with employees' salaries for similar positions as shown in the paragraph entitled Salaries.c. Facility records document shows that the owner does perform the service for which he/she is being compensated.22. Depreciation. Only the straight-line method of depreciation shall be allowed. NOTE: Depreciation of assets being used by a vendor at the time he enters the Medicaid program is allowed. This applies even though such assets be fully or partially depreciated on the vendor's books. As long as an asset is being used, its useful life is considered not to have ended. Consequently, the asset is subject to depreciation based on a revised estimate of the asset's useful life as determined by the provider and approved by the Medicaid program.
23. Costs Not Allowable a. Dues paid to more than one professional trade association or organization, bad debts, unreasonable costs, costs not related to resident care, fines and penalties, and related party costs in excess of actual costs are examples of unallowable costs.b. Nursing facilities are not to show any cost relating to ventilator equipment in their cost reports to Bureau of Health Services Financing.c. In cases where nursing service expense at the various levels of care is not kept separate, the following formula may be used for allocating these costs: i. step one, multiply the number of resident days at each level of care by the weighted factor; NOTE: The factor represents the number of nursing hours required per patient day at each level of care.
ii. step two, compute the weighted percentage of patient days for each level of care;iii. step three, apply the percentage computed in step two to the total nursing service expense for the period;iv. step four, the result obtained in step three is carried to the appropriate schedule of the cost report.La. Admin. Code tit. 50, § II-10151
Promulgated by the Department of Health and Hospitals, Office of the Secretary, Bureau of Health Services Financing, LR 22:34 (January 1996).AUTHORITY NOTE: Promulgated in accordance with R.S. 46:153.