N.H. Admin. Code § He-E 806.12

Current through Register No. 50, December 12, 2024

Section He-E 806.12 - Depreciation of Equipment and Property

Depreciation of equipment and property which has a purchase price of over $500.00 shall be an allowable cost pursuant to the following conditions:

(a) The depreciation shall be:

(1) Identifiable and recorded in the NF provider's accounting records;

(2) Based on the historical cost of the asset or fair market value at the time of donation in the case of donated assets; and

(3) Prorated over the estimated useful life of the asset using the straight line method and the guideline lives specified in the American Hospital Association "Useful Lives of Depreciable Hospital Assets", 2004 edition.

(b) Recording of the depreciation pursuant to (a) (1) above shall encompass:

(1) The identification of the depreciable asset in use;

(2) The asset's historical cost;

(3) The method of depreciation;

(4) The estimated useful life of the asset; and

(5) The asset's accumulated depreciation;

(c) Depreciation shall be allowed on assets financed with Hill-Burton or other federal or public funds.

(d) If an asset for which depreciation had been allowed in Medicaid reimbursement is sold at a gain, such reimbursement shall be subject to recapture as follows:

(1) Gain shall be determined to be the difference between net book value, that is, historical cost less accumulated straight line depreciation recognized for Medicaid reimbursement purposes, and the selling price;

(2) Gain shall be calculated in the aggregate without adjustment or offset for gain attributed to return on equity, inflationary increases in the market value of the remaining assets, or for increases in value due to supply and demand for the assets in the market place;

(3) Recapture shall be calculated as the depreciation paid by the program to the facility for the asset, but recapture shall not exceed the amount of the gain;

(4) The recapture provisions shall apply regardless of the seller's Medicaid provider enrollment status at the time of the gain;

(5) For recapture purposes, the transfer of stock or shares shall be recognized as a change in ownership except in the following circumstances:

a. the number of shares transferred does not exceed 25 percent of the total number of shares in any one class of stock;

b. the transferred stock or shares are those of a publicly traded corporation;

c. The transfer has been made solely as a method of financing, not as a method of transferring management or control; and

(6) The transfer of an asset shall not be subject to recapture if the transfer occurs between family members or other related parties.

(e) For recapture or depreciation, the department shall charge the NF provider interest when an NF provider does not pay in a timely manner or in the case of a dispute on the amount of recapture owed and the department prevails at an administrative hearing. The amount of the interest charged shall be payable to the department at the highest rate paid by the seller on loans for the facility.

N.H. Admin. Code § He-E 806.12

#8547, eff 1-24-06 (formerly He-W 593.10 )