Section 471-45-006 - LIMITATIONS FOR RATE DETERMINATIONThe Department applies the following limitations for rate determination.
006.01EXPIRATION OR TERMINATION OF LICENSE OR CERTIFICATION. The Department does not make payment for care provided 30 days after the date of expiration or termination of the provider's license or certificate to operate under Medicaid. The Department does not make payment for care provided to individuals who were admitted after the date of expiration or termination of the provider's license or certificate to operate under Medicaid.006.02TOTAL INPATIENT DAYS. In computing the provider's allowable per diem rates, total inpatient days are used. Payment for holding beds for patients in acute hospitals or on therapeutic home visits is permitted if the policy of the facility is to hold beds for private patients and if the patient's bed is actually held. Bed holding is allowed for 15 days per hospitalization and for up to 18 days of therapeutic home visits per calendar year. Both bed hold days and therapeutic leave days for in-state nursing facilities are reimbursed equal to the resident's applicable level of care classification. Medicaid inpatient days are days for which claims or electronic Standard Health Care Claim: Institutional transaction, ASC X12N 837, from the provider have been processed by the Department. The Department will not consider days for which a claim has not been processed unless the provider can show justification to the Department's satisfaction. Days for which the client's Medicaid eligibility is in a spenddown category are considered Medicaid inpatient days in compiling inpatient days. A facility may not impose charges that exceed the payment rate established under this chapter for these days. An inpatient day is: (A) A day on which a patient occupies a bed at midnight. When a client is admitted to a facility and dies before midnight on the same day, one day is counted and paid; or(B) A day on which the bed is held for hospital leave or therapeutic home visits.006.03START-UP COSTS. All new providers entering Medicaid must capitalize and amortize their allowable start-up costs. Only those costs incurred three months before the admission of the first resident, private or Medicaid, may be capitalized and amortized. These costs must be documented and submitted with the provider's initial cost report. Amortization of these costs begins on the date of the first admission and must extend over at least 36 months but must not exceed 60 months.006.04COMMON OWNERSHIP OR CONTROL. Costs applicable to services, facilities, and supplies furnished to a provider by organizations related to the provider by common ownership or control must not exceed the lower of the cost to the related organization or the price of comparable services, facilities, or supplies purchased elsewhere. An exception to the general rule applies if the provider demonstrates by convincing evidence to the Department's satisfaction that:(A) The supplying organization is a bona fide separate organization;(B) A substantial part of the supplying organization's business activity is transacted with other than the provider and organizations related to the supplier by common ownership or control, and there is an open competitive market for the type of services, facilities, or supplies furnished by the organization;(C) The services, facilities, or supplies are those which commonly are obtained by institutions like the provider from other organizations and are not a basic element of patient care ordinarily furnished directly to patients by similar institutions. Costs of contracted labor obtained from a related party are limited to the salaries paid to the individual workers for their time working at the facility, plus applicable payroll taxes and employee benefits. The exception to the related party rule does not apply; and(D) The charge to the provider is in line with the charge for those services, facilities, or supplies in the open market, and is no more than the charges made under comparable circumstances to others by the organization for those services, facilities, or supplies.006.05LEASED FACILITIES. Allowable costs leased facilities including all personal property covered in the lease, entered into after July 31, 1982, must not exceed the actual cost of the lessor for depreciation, interest on lessor's mortgage, and other costs of ownership incurred as a condition of the lease. If the lessor sells the facility, all provisions of this chapter will apply. All interest must be specifically identified or reasonably allocated to the asset. All actual costs to the lessor are computed according to the rate setting principles of this section. If costs are claimed for leases, the lease agreement must provide that the lessor will: (A) Provide an itemized statement at the end of each provider's report period which includes depreciation, interest, and other costs incurred as a condition to the lease; and(B) Make records available for audit upon request of the Department, the federal Department of Health and Human Services, or their designated representatives.006.06HOME OFFICE COSTS - CHAIN OPERATIONS. A chain organization consists of a group of two or more health care facilities which are owned, leased, or through any other device, controlled by one organization. Chain organizations include, but are not limited to, chains operated by proprietary organizations and chains operated by various religious, charitable, and governmental organizations. A chain organization may also include business organizations which are engaged in other activities not directly related to healthcare. Home offices of chain organizations vary greatly in size, number of locations, staff, mode of operations, and services furnished to the facilities in the chain. The home office of a chain is not a provider in itself; therefore, its costs may not be directly reimbursed by the program. The relationship of the home office to the Medicaid program is that of a related organization to participating providers. To the extent the home office furnishes services related to patient care to a provider, the reasonable costs of such services are includable in the cost report. Costs allocated under HIM-15, Section 2150.3.B, are limited to direct patient care services provided at the facility and must be included in the applicable cost category. Costs allocated under HIM-15, Sections 2150.3C and 2150.3D, are included in the administration cost category. The Medicaid does not distinguish between capital related and non-capital related interest expense and interest income.006.07INTEREST EXPENSE. Interest cost will not be allowed on loan principal balances which are in excess of 80 percent of the fixed asset cost recognized by the Department for nursing facility care. This limitation does not apply to government owned facilities.006.08RECOGNITION OF FIXED COST BASIS. The fixed cost basis of real property, and personal property for facilities purchased on or after July 1, 2020, as an ongoing operation or for newly constructed facilities or facility additions is the lesser of, the acquisition cost of the asset to the purchaser; or for facilities purchased as an ongoing operation on or after July 1, 2020, the seller's Medicaid net book value at the time of purchase. Costs, including legal fees, accounting and administrative costs, travel costs, and the costs of feasibility studies, attributable to the negotiation or settlement of the sale or purchase of any capital asset, by acquisition or merger, for which any payment has previously been made are not allowable.006.09SALARIES OF ADMINISTRATORS, OWNERS, AND DIRECTLY RELATED PARTIES. Compensation received by an administrator, owner, or directly related party is limited to a reasonable amount for the documented services provided in a necessary function. Reasonable value of the documented services rendered by an administrator is determined from Medicare regulations and administrator salary surveys for the Kansas City Region, adjusted for inflation by the federal Department of Health and Human Services. Beginning with the following calendar year base numbers for 12/31/2010, the Administrator Compensation Maximum Amounts can be calculated based on the following methodology.006.09(A)2010 BASE NUMBERS. The base numbers for 2010 to be used in the below calculation are: HIM%: 1.5%; Beds 0-74: 81,490; Beds 75-79: 82,954; Beds 100-149: 98,569; Beds 150-200: 99,544; Beds 200 or greater: 146,388.006.09(B)CALCULATION. To determine the maximum amount for state fiscal year 2011, for each bed category, add 1 to the Calendar Year 2010 HIM % and multiply this amount by 50% of the Calendar Year 2010 bed total. To this amount add 50% of the Calendar Year 2010 bed total. For future years update the calendar year information above (A) by replacing the HIM % with the updated HIM % from HIM 15 Section 905.6.006.09(C)COMPENSATION TO BE INCLUDED. All compensation received by an administrator is included in the administration cost category unless an allocation has prior approval from the Department. Reasonable value of the documented services rendered by an owner or directly related party who hold positions other than administrator is determined by comparison to salaries paid for comparable position or positions within the specific facility, if applicable, or, if not applicable, then comparison to salaries for comparable position or positions as published by the Department of Administrative Services, Division of State Personnel in the State of Nebraska Salary Survey.006.10ADMINISTRATION EXPENSE. In computing the provider's allowable cost for determination of the rate, administration expense is limited to no more than 14 percent of the total otherwise allowable direct nursing and support services components for the facility. This computation is made by dividing the total allowable direct nursing and support services Components, less the administration cost category, by 0.86. The resulting quotient is the maximum allowable amount for the direct nursing and support services components, including the administration cost category. If a facility's actual allowable cost for the two components exceeds this quotient, the excess amount is used to adjust the administration cost category.006.11DIRECT NURSING COSTS. Direct nursing costs include cost report lines 94 through 103.006.12PLANT RELATED COSTS. Plant related costs include cost report lines 129 through 163.006.13EQUIPMENT LEASE AND MAINTENANCE AGREEMENTS. Costs of equipment lease or maintenance agreements that include or are tied to usage or supplies must be reported in the operating cost category that most closely relates to the equipment.006.14OTHER LIMITATIONS. Other limitations to specific cost components of the rate are included in the rate determination provision of this system.006.15NURSING FACILITY QUALITY ASSESSMENT. The nursing facility quality assessment is an allowable cost addressed through the nursing facility quality assessment component.471 Neb. Admin. Code, ch. 45, § 006
Adopted effective 6/6/2022Amended effective 6/2/2024