Iowa Admin. Code r. 441-82.5 - Financial and statistical report
All facilities wishing to participate in the program shall
submit a Financial and Statistical Report, Form 470-0030, to the
(1)
Failure to maintain
records. Failure to maintain and submit adequate accounting or
statistical records shall result in termination or suspension of participation
in the program.
(2)
Accounting procedures. Financial information shall be based on
that appearing in the audited financial statement. Adjustments to convert to
the accrual basis of accounting shall be made when the records are maintained
on other accounting bases. Facilities which are a part of a larger health
facility extending short-term, intensive, or other health care not generally
considered nursing care may submit a cost apportionment schedule prepared in
accordance with recognized methods and procedures. The schedule shall be
required when necessary for a fair presentation of expense attributable to
intermediate care facility patients.
(3)
Submission of reports.
The facility's cost report shall be received by the Iowa Medicaid provider cost
audit and rate setting unit no later than September 30 each year except as
described in subrule 82.5(14).
a. The
submission shall include a working trial balance that corresponds to all
financial data contained on the cost report. The working trial balance must
provide sufficient detail to enable the Iowa Medicaid provider cost audit and
rate setting unit to reconcile accounts reported on the general ledger to those
on the financial and statistical report. For reporting costs that are not
directly assigned to the facility in the working trial balance, an allocation
method must be identified for each line, including the statistics used in the
calculation. Reports submitted without a working trial balance shall be
considered incomplete, and the facility shall be subject to the rate reductions
set forth in paragraph 82.5(3)"c."
b. If the financial statements have been
compiled, reviewed or audited by an outside firm, a copy of the compilation,
review or audit, including notes, for the reporting period shall be included
with the submission of the financial and statistical report.
c. Failure to timely submit the complete
report shall reduce payment to 75 percent of the current rate.
(1) The reduced rate shall be effective
October 1 and shall remain in effect until the first day of the month after the
delinquent report is received by the Iowa Medicaid provider cost audit and rate
setting unit.
(2) The reduced rate
shall be paid for no longer than three months, after which time no further
payments will be made until the first day of the month after the delinquent
report is received by the Iowa Medicaid provider cost audit and rate setting
unit.
d. Amended reports.
The department , in its sole discretion, may reopen a review of a financial and
statistical report at any time. No other entity or person has the right to
request that the department or its contractor reopen a review of a financial
and statistical report, or submit an amended financial and statistical report
for review by the department , after the facility is notified of its per diem
payment rate following a review of a financial and statistical
report.
e. When an intermediate
care facility for persons with an intellectual disability continues to include
in the total costs an item or items which had in a prior period been removed
through an adjustment made by the department or its contractor, the contractor
shall recommend to the department that the per diem be reduced to 75 percent of
the current payment rate for the entire quarter beginning the first day of the
fourth month after the facility's fiscal year end. If the adjustment has been
contested and is still in the appeals process, the facility may include the
cost, but must include sufficient detail so the Iowa Medicaid provider cost
audit and rate setting unit can determine if a similar adjustment is needed in
the current period. The department may, after considering the seriousness of
the offense, make the reduction.
f.
Nothing in this subrule relieves a facility of its obligation to immediately
inform the department that the facility has retained Medicaid funds to which
the facility is not entitled as a result of any cost report process. A facility
shall notify the Iowa Medicaid when the facility determines that funds have
been incorrectly paid or when an overpayment has been detected.
(4)
Payment at new
rate. When a new rate is established, payment at the new rate shall be
effective with services rendered as of the first day of the month in which the
report is postmarked, or if the report was personally delivered, the first day
of the month in which the report was received by the department . Adjustments
shall be included in the payment the third month after the receipt of the
report.
(5)
Accrual
basis. Facilities not using the accrual basis of accounting shall
adjust recorded amounts to the accrual basis. Expenses which pertain to an
entire year shall be properly amortized by month in order to be properly
recorded for the annual fiscal year report. Records of cash receipts and
disbursements shall be adjusted to reflect accruals of income and
expense.
(6)
Census of
Medicaid members. Census figures of Medicaid members shall be obtained
on the last day of the month ending the reporting period.
(7)
Patient days. In
determining inpatient days, a patient day is that period of service rendered a
patient between the census-taking hours on two successive days, the day of
discharge being counted only when the patient was admitted that same
day.
(8)
Opinion of
accountant. The department may require that an opinion of a certified
public accountant or public accountant accompany the report when adjustments
made to prior reports indicate disregard of the certification and reporting
instructions.
(9)
Calculating patient days. When calculating patient days,
facilities shall use an accumulation method.
a. Census information shall be based on a
patient status at midnight each day. A patient whose status changes from one
class to another shall be shown as discharged from the previous status and
admitted to the new status on the same day.
b. When a member is on a reserve bed status
and the department is paying on a per diem basis for the holding of a bed, or
any day a bed is reserved for a public assistance or nonpublic assistance
patient and a per diem rate for the bed is charged to any party, the reserved
days shall be included in the total census figures for inpatient
days.
(10)
Revenues. Revenues shall be reported as recorded in the
general books and records. Expense recoveries credited to expense accounts
shall not be reclassified in order to be reflected as revenues.
a. Routine daily services shall represent the
established charge for daily care. Routine daily services are those services
which include room, board, nursing services, and such services as supervision,
feeding, incontinency, and similar services, for which the associated costs are
in nursing service.
b. Revenue from
ancillary services provided to patients shall be applied in reduction of the
related expense.
c. Revenue from
the sale of medical supplies, food or services to employees or nonresidents of
the facility shall be applied in reduction of the related expense. Revenue from
the sale to private-pay residents of items or services which are included in
the medical assistance per diem will not be offset.
d. Investment income adjustment is necessary
only when interest expense is incurred, and only to the extent of the interest
expense.
e. Laundry revenue shall
be applied to laundry expense.
f.
Accounts receivable charged off or provision for uncollectible accounts shall
be reported as a deduction from gross revenue.
(11)
Limitation of expenses.
Certain expenses that are not normally incurred in providing patient care shall
be eliminated or limited according to the following rules.
a. Federal and state income taxes are not
allowed as reimbursable costs. These taxes are considered in computing the fee
for services for proprietary institutions.
b. Fees paid directors and nonworking
officer's salaries are not allowed as reimbursable costs.
c. Personal travel and entertainment are not
allowed as reimbursable costs. Certain expenses such as rental or depreciation
of a vehicle and expenses of travel which include both business and personal
shall be prorated. Amounts that appear excessive may be limited after
considering the specific circumstances. Records shall be maintained to
substantiate the indicated charges.
d. Loan acquisition fees and standby fees are
not considered part of the current expense of patient care, but should be
amortized over the life of the related loan.
e. A reasonable allowance of compensation for
services of owners or immediate relatives is an allowable cost, provided the
services are actually performed in a necessary function. For this purpose, the
following persons are considered immediate relatives: husband and wife; natural
parent, child and sibling; adopted child and adoptive parent; stepparent,
stepchild, stepbrother and stepsister; father-in-law, mother-in-law,
son-in-law, daughter-in-law, brother-in-law, and sister-in-law; grandparent and
grandchild. Adequate time records shall be maintained. Adjustments may be
necessary to provide compensation as an expense for nonsalaried working
proprietors and partners. Members of religious orders serving under an
agreement with their administrative office are allowed salaries paid persons
performing comparable services. When maintenance is provided these persons by
the facility, consideration shall be given to the value of these benefits and
this amount shall be deducted from the amount otherwise allowed for a person
not receiving maintenance.
(1) Compensation
means the total benefit received by the owner or immediate relative for
services rendered. Compensation includes all remuneration, paid currently or
accrued, for managerial, administrative, professional and other services
rendered during the period. Compensation shall include all items that should be
reflected on IRS Form W-2, Wage and Tax Statement, including, but not limited
to, salaries, wages, and fringe benefits; the cost of assets and services
received; and deferred compensation. Fringe benefits shall include, but are not
limited to, costs of leave, employee insurance, pensions and unemployment
plans. If the facility's fiscal year end does not correlate to the period of
the W-2, a reconciliation between the latest issued W-2 and current
compensation shall be required to be disclosed to the Iowa Medicaid provider
cost audit and rate setting unit. Employer portions of payroll taxes associated
with amounts of compensation that exceed the maximum allowed compensation shall
be considered unallowable for reimbursement. All compensation paid to related
parties, including payroll taxes, shall be required to be reported to the Iowa
Medicaid provider cost audit and rate setting unit with the submission of the
financial and statistical report. If it is determined that there have been
undisclosed related-party salaries, the cost report shall be determined to have
been submitted incomplete and the facility shall be subject to the penalties
set forth in paragraph 82.5(3)"c."
(2) Reasonableness-requires that the
compensation allowance be such an amount as would ordinarily be paid for
comparable services by comparable institutions and depends upon the facts and
circumstances of each case.
(3)
Necessary-requires that the function be such that had the owner or immediate
relative not rendered the services, the facility would have had to employ
another person to perform the service, and be pertinent to the operation and
sound conduct of the institution.
(4) The base maximum allowed compensation for
an administrator who is involved in ownership of the facility or who is an
immediate relative of an owner of the facility is $1,926 per month plus $20.53
per month per licensed bed capacity for each bed over 60, not to exceed $2,852
per month. An administrator is considered to be involved in ownership of a
facility when the administrator has ownership interest of 5 percent or more.
On an annual basis, the maximum allowed compensation amounts for these administrators shall be increased or decreased by the inflation factor applied to facility rates.
(5) The maximum allowed compensation for an
assistant administrator who is involved in ownership of the facility or who is
an immediate relative of an owner of the facility in facilities having a
licensed capacity of 151 or more beds is 60 percent of the amount allowed for
the administrator. An assistant administrator is considered to be involved in
ownership of a facility when the assistant administrator has ownership interest
of 5 percent or more.
(6) The
maximum allowed compensation for a director of nursing or any employee who is
involved in ownership of the facility or who is an immediate relative of an
owner of the facility is 60 percent of the amount allowed for the
administrator. Persons involved in ownership or relatives providing
professional services shall be limited to rates prevailing in the community not
to exceed 60 percent of the allowable rate for the administrator on a
semiannual basis. Records shall be maintained in the same manner for an
employee involved in ownership as are maintained for any employee of the
facility. Ownership is defined as an interest of 5 percent or more.
(7) The maximum allowed compensation for
employees as set forth in subparagraphs 82.5(11)"e"(4) to
82.5(11)"e"(6) shall be adjusted by the percentage of the
average work week that the employee devoted to business activity at the
intermediate care facility for persons with an intellectual disability for the
fiscal year of the financial and statistical report. The time devoted to the
business shall be disclosed on the financial and statistical report and shall
correspond to any amounts reported to the Medicare fiscal intermediary. If an
owner's or immediate relative's time is allocated to the facility from another
entity (e.g., home office), the compensation limit shall be adjusted by the
percentage of total costs of the entity allocated to the facility. In no case
shall the amount of salary for one employee allocated to multiple facilities be
more than the maximum allowed compensation for that employee had the salary
been allocated to only one facility.
f. Management fees and home office costs
shall be allowed only to the extent that they are related to patient care and
replace or enhance but do not duplicate functions otherwise carried out in a
facility.
g. Depreciation based
upon tax cost using only the straight-line method of computation, recognizing
the estimated useful life of the asset as defined in the American Hospital
Association Useful Life Guide, may be included as a patient cost. When
accelerated methods of computation have been elected for income tax purposes,
an adjustment shall be made. For change of ownership, refer to subrule
82.5(12).
h. Necessary and proper
interest on both current and capital indebtedness is an allowable cost.
(1) Interest is the cost incurred for the use
of borrowed funds. Interest on current indebtedness is the cost incurred for
funds borrowed for a relatively short term. Interest on capital indebtedness is
the cost incurred for funds borrowed for capital purposes.
(2) "Necessary" requires that the interest be
incurred on a loan made to satisfy a financial need of the provider, be
incurred on a loan made for a purpose reasonably related to patient care, and
be reduced by investment income except where the income is from gifts and
grants whether restricted or unrestricted, and which are held separate and not
commingled with other funds.
(3)
"Proper" requires that interest be incurred at a rate not in excess of what a
prudent borrower would have had to pay in the money market on the date the loan
was made, and be paid to a lender not related through control or ownership to
the borrowing organization.
(4)
Interest on loans is allowable as cost at a rate not in excess of the amount an
investor could receive on funds invested in the locality on the date the loan
was made.
(5) Interest is an
allowable cost when the general fund of a provider borrows from a
donor-restricted fund, a funded depreciation account of the provider, or the
provider's qualified pension fund, and pays interest to the fund, or when a
provider operated by members of a religious order borrows from the
order.
(6) When funded depreciation
is used for purposes other than improvement, replacement or expansion of
facilities or equipment related to patient care, allowable interest expense is
reduced to adjust for offsets not made in prior years for earnings on funded
depreciation. A similar treatment will be accorded deposits in the provider's
qualified pension fund where the deposits are used for other than the purpose
for which the fund was established.
i. Costs applicable to supplies furnished by
a related party or organization are a reimbursable cost when included at the
cost to the related party or organization. The cost shall not exceed the price
of comparable supplies that could be purchased elsewhere.
(1) Related means that the facility, to a
significant extent, is associated with or has control of or is controlled by
the organization furnishing the services, facilities, or supplies.
(2) Common ownership exists when an
individual or individuals possess significant ownership or equity in the
facility and the institution or organization serving the provider.
(3) Control exists where an individual or an
organization has power, directly or indirectly, to significantly influence or
direct the actions or policies of an organization or institution.
(4) When the facility demonstrates by
convincing evidence that the supplying organization is a bona fide separate
organization; that a substantial part of its business activity of the type
carried on with the facility is transacted with others and there is an open
competitive market for the type of services, facilities, or supplies furnished
by the organization; that the services, facilities, or supplies are those which
commonly are obtained by similar institutions from other organizations and are
not a basic element of patient care ordinarily furnished directly to patients
by the institutions; and that the charge to the facility is in line with the
charge for services, facilities, or supplies in the open market and no more
than the charge made under comparable circumstances to others by the
organization for the services, facilities, or supplies, the charges by the
supplier shall be allowable costs.
j. A facility entering into a new or renewed
rent or lease agreement on or after June 1, 1994, shall be subject to the
provisions of this paragraph.
When the operator of a participating facility rents from a nonrelated party, the amount of rent expense allowable on the cost report shall be the lesser of the actual rent payments made under the terms of the lease or an annual reasonable rate of return applied to the cost of the facility. The cost of the facility shall be determined as the historical cost of the facility in the hands of the owner when the facility first entered the Iowa Medicaid program. Where the facility has previously participated in the program, the cost of the facility shall be determined as the historical cost of the facility, as above, less accumulated depreciation claimed for cost reimbursement under the program. The annual reasonable rate of return shall be defined as one and one-half times the annualized interest rate of 30-year Treasury bonds as reported by the Federal Reserve Board on a weekly-average basis, at the date the lease was entered into.
When the operator of a participating facility rents the building from a related party, the amount of rent expense allowable on the cost report shall be limited to the lesser of the actual rent payments made under the terms of the lease or the amount of property costs that would otherwise have been allowable under the Iowa Medicaid program to an owner-provider of that facility.
The lessee shall submit a copy of the lease agreement, documentation of the cost basis used and a schedule demonstrating that the limitations have been met with the first cost report filed for which lease costs are claimed.
k. Each
facility which supplies transportation services as defined in Iowa Code section
324A.1, subsection 1, shall provide current documentation of compliance with or
exemption from public transit coordination requirements as found in Iowa Code
chapter 324A and department of transportation rules 761-Chapter 910 at the time
of annual contract renewal. Failure to cooperate in obtaining or in providing
the required documentation of compliance or exemption after receipt from the
Iowa department of transportation, public transit division, shall result in
disallowance of vehicle costs and other costs associated with transporting
residents.
l. Depreciation,
interest and other capital costs attributable to construction of new
facilities, expanding existing facilities, or the purchase of an existing
facility, are allowable expenses only if prior approval has been gained through
the health planning process specified in rules of the public health department ,
641-Chapter 201.
m. Reasonable
legal, accounting, consulting and other professional fees, including
association dues, are allowable costs if the fees are directly related to
patient care. Legal, accounting, consulting and other professional fees,
including association dues, described by the following are not considered to be
patient-related and therefore are not allowable expenses:
(1) Any fees or portion of fees used or
designated for lobbying.
(2)
Nonrefundable and unused retainers.
(3) Fees paid by the facility for the benefit
of employees.
(4) Legal fees,
expenses related to expert witnesses, accounting fees and other consulting fees
incurred in an administrative or judicial proceeding. Exception: Facilities may
report the reasonable costs incurred in an administrative or judicial
proceeding if all of the following conditions are met. Recognition of any costs
will be in the fiscal period when a final determination in the administrative
or judicial proceeding is made.
1. The costs
have actually been incurred and paid,
2. The costs are reasonable expenditures for
the services obtained,
3. The
facility has made a good-faith effort to settle the disputed issue before the
completion of the administrative or judicial proceeding, and
4. The facility prevails on the disputed
issue.
n.
Penalties or fines imposed by federal or state agencies are not allowable
expenses.
o. Penalties, fines or
fees imposed for insufficient funds or delinquent payments are not allowable
expenses.
(12)
Termination or change of owner.
a. A participating facility contemplating
termination of participation or negotiating a change of ownership shall provide
the department with at least 60 days' prior notice. A transfer of ownership or
operation terminates the participation agreement. Anew owner or operator shall
establish that the facility meets the conditions for participation and enter
into anew agreement. The person responsible for transfer of ownership or for
termination is responsible for submission of a final financial and statistical
report through the date of the transfer. No payment to the new owner will be
made until formal notification is received. The following situations are
defined as a transfer of ownership:
(1) In
the case of a partnership which is a party to an agreement to participate in
the medical assistance program, the removal, addition, or substitution of an
individual for a partner in the association, in the absence of an express
statement to the contrary, dissolves the old partnership and creates a new
partnership which is not a party to the previously executed agreement and a
transfer of ownership has occurred.
(2) When a participating nursing home is a
sole proprietorship, a transfer of title and property to another party
constitutes a change of ownership.
(3) When the facility is a corporation,
neither a transfer of corporate stock nor a merger of one or more corporations
with the participating corporation surviving is a transfer of ownership. A
consolidation of two or more corporations resulting in the creation of a new
corporate entity constitutes a change of ownership.
(4) When a participating facility is leased,
a transfer of ownership is considered to have taken place. When the entire
facility is leased, the total agreement with the lessor terminates. When only
part of the facility is leased, the agreement remains in effect with respect to
the unleased portion but terminates with respect to the leased
portion.
b. No increase
in the value of the property shall be allowed in determining the Medicaid rate
for the new owner with any change of ownership (including lease agreements).
When filing the first cost report, the new owner shall either continue the
schedule of depreciation and interest established by the previous owner, or the
new owner may choose to claim the actual rate of interest expense. The results
of the actual rate of interest expense shall not be higher than would be
allowed under the Medicare principles of reimbursement and shall be applied to
the allowed depreciable value established by the previous owner, less any down
payment made by the new owner.
c.
Other acquisition costs of the new owner such as 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 the
property shall not be allowed.
d.
In general, the provisions of Section 1861(v)(1)(0) of the Social Security Act
regarding payment allowed under Medicare principles of reimbursement at the
time of a change of ownership shall be followed, except that no return on
equity or recapture of depreciation provisions shall be employed.
e. A new owner or lessee wishing to claim a
new rate of interest expense must submit documentation which verifies the
amount of down payment made, the actual rate of interest, and the number of
years required for repayment with the next semiannual cost report. In the
absence of the necessary supportive documentation, interest and other property
costs for all facilities which have changed or will change ownership shall
continue at the rate allowed the previous owner.
(13)
Assessed fee. The fee
assessed pursuant to 441-Chapter 36 shall not be an allowable cost for cost
reporting and audit purposes. In lieu of treating the fee as an allowable cost,
a per diem assessment amount is added to the reimbursement rate calculated
under subrule 82.5(14), not subject to the maximum allowable base cost or
maximum rate set at the eightieth percentile. The per diem assessment amount
will be calculated by dividing the annual assessment paid by the reported total
patient days.
(14)
Payment
to new facility. A facility receiving Medicaid ICF/ID certification on
or after July 1, 1992, shall be subject to the provisions of this subrule.
a. A facility receiving initial Medicaid
certification for ICF/ID level of care shall submit a budget for six months of
operation beginning with the month in which Medicaid certification is given.
The budget shall be submitted at least 30 days in advance of the anticipated
certification date. The Medicaid per diem rate for anew facility shall be based
on the submitted budget subject to review by the accounting firm under contract
with the department . The rate shall be subject to a maximum set at the
eightieth percentile of all participating community-based Iowa ICFs/ID with
established base rates. The eightieth percentile maximum rate shall be adjusted
July 1 of each year. The state hospital schools shall not be included in the
compilation of facility costs. The beginning rates for a new facility shall be
effective with the date of Medicaid certification.
b. Initial cost report. Following six months
of operation as a Medicaid-certified ICF/ID, the facility shall submit a report
of actual costs. The rate computed from this cost report shall be adjusted to
100 percent occupancy plus the annual percentage increase of the Consumer Price
Index for all urban consumers, U.S. city average (hereafter referred to as the
Consumer Price Index). Business start-up and organization costs shall be
accounted for in the manner prescribed by the Medicare and Medicaid standards.
Any costs that are properly identifiable as start-up costs, organization costs
or capitalizable as construction costs must be appropriately classified as
such.
(1) Start-up costs. In the period of
developing a provider's ability to furnish patient care services, certain costs
are incurred. The costs incurred during this time of preparation are referred
to as start-up costs. Since these costs are related to patient care services
rendered after the time of preparation, the costs must be capitalized as
deferred charges and amortized over a five-year period.
Start-up costs include, for example, administrative and program staff salaries, heat, gas and electricity, taxes, insurance, mortgage and other interest, employee training costs, repairs and maintenance, and housekeeping.
(2)
Organization costs. Organization costs are those costs directly related to the
creation of a corporation or other form of business. These costs are an
intangible asset in that they represent expenditures for rights and privileges
which have a value to the enterprise. The services inherent in organization
costs extend over more than one accounting period and affect the costs of
future periods of operation. Organization costs must be amortized over a
five-year period.
1. Allowable organization
costs. Allowable organization costs include, but are not limited to, legal fees
incurred in establishing the corporation or other organization (such as
drafting the corporate charter and bylaws, legal agreements, minutes of
organization meetings, terms of original stock certificates), necessary
accounting fees, expenses of temporary directors and organizational meetings of
directors and stockholders, and fees paid to states for
incorporation.
2. Unallowable
organization costs. The following types of costs are not considered allowable
organization costs: costs relating to the issuance and sale of shares of
capital stock or other securities, such as underwriters' fees and commissions,
accountant's or lawyer's fees; costs of qualifying the issues with the
appropriate state or federal authorities; and stamp taxes.
c. Standardization of cost
reporting period for new facilities.
(1)
Facilities receiving initial certification between July 1 and December 31
(inclusive) shall submit three successive six-month cost reports covering their
first 18 months of operation. The fourth six-month cost report shall cover the
January 1 to June 30 period. Thereafter, the facility shall submit a cost
report on an annual basis of July 1 to June 30.
(2) Facilities receiving initial
certification between January 1 and June 30 (inclusive) shall submit two
successive six-month cost reports covering the first 12 months of operation.
The third six-month cost report shall cover the January 1 to June 30 period.
Thereafter, the facility shall submit a cost report on an annual basis of July
1 to June 30.
(3) All facilities
shall comply with the requirements of subrule 82.5(3) when submitting
reports.
d. Completion of
12 months of operation. Following the first 12 months of operation as a
Medicaid-certified ICF/ID as described in subrule 82.5(14), the facility shall
submit a cost report for the second six months of operation. An on-site audit
of facility costs shall be performed by the accounting firm under contract with
the department . Based on the audited cost report, a rate shall be established
for the facility. This rate shall be considered the base rate until rebasing of
facility costs occurs.
(1) A new maximum
allowable base cost will be calculated each year by increasing the prior year's
maximum allowable base by the annual percentage increase of the Consumer Price
Index.
(2) Each year's maximum
allowable base cost represents the maximum amount that can be
reimbursed.
e. Maximum
rate. Facilities shall be subject to a maximum rate set at the eightieth
percentile of the total per diem cost of all participating community-based
ICFs/ID with established base rates. The eightieth percentile maximum rate
shall be adjusted July 1 of each year using cost reports on file December 31 of
the previous year.
f. Incentive
factor. New facilities which complete the second annual period of operation
that have an annual per unit cost percentage increase of less than the
percentage increase of the Consumer Price Index, as described in
82.5(14)"d," shall be given their actual percentage increase
plus one-half the difference of their actual percentage increase compared to
the allowable maximum percentage increase. This percentage difference
multiplied by the actual per diem cost for the annual period just completed is
the incentive factor.
(1) The incentive factor
will be added to the new reimbursement base rate to be used as the per diem
rate for the next annual period of operation.
(2) Facilities whose annual per unit cost
decreased from the prior year shall be given their actual per unit cost plus
one and one-half the percentage increase in the Consumer Price Index as an
incentive for cost containment.
g. Reimbursement for first annual period. The
reimbursement for the first annual period will be determined by multiplying the
per diem rate calculated for the base period by the Consumer Price Index plus
one.
(1) The projected reimbursement for each
period thereafter (until rebasing) will be calculated by multiplying the lower
of the prior year's actual or the projected reimbursement per diem by the
Consumer Price Index.
(2) If a
facility experiences an increase in actual costs that exceeds both the actual
reimbursement and the maximum allowable base cost as determined for that annual
period, the facility shall receive as reimbursement in the following period the
maximum allowable base as calculated.
(3) All calculated per diem rates shall be
subject to the prevailing maximum rate.
(15)
Payment to new owner.
An existing facility with a new owner shall continue with the previous owner's
per diem rate until a new financial and statistical report has been submitted
and a new rate established according to subrule 82.5(16). The facility may
submit a report for the period of July 1 to June 30 or may submit two cost
reports within the fiscal year provided the second report covers a period of at
least six months ending on the last day of the fiscal year. The facility shall
notify the department of the reporting option selected.
(16)
Payment to existing
facilities. The following reimbursement limits shall apply to all
non-state-owned ICFs/ID:
a. Each facility
shall file a cost report covering the period from January 1, 1992, to June 30,
1992. This cost report shall be used to establish a reimbursement rate to be
paid to the facility and shall be used to establish the base allowable cost per
unit to be used in future reimbursement rate calculations. Subsequent cost
reports shall be filed annually by each facility covering the 12 months from
July 1 to June 30.
b. The
reimbursement rate established based on the report covering January 1, 1992, to
June 30, 1992, shall be calculated using the method in place prior to July 1,
1992, including inflation and incentive factors.
c. The audited per unit cost from the January
1, 1992, to June 30, 1992, cost report shall become the initial allowable base
cost. A new maximum allowable base cost will be calculated each year as
described in 82.5(14)"d."
d. Facilities which have an annual per unit
cost percentage increase of less than the percentage increase of the Consumer
Price Index shall be given their actual percentage increase plus one-half the
difference of their actual percentage increase compared to the allowable
maximum percentage increase.
This percentage difference multiplied by the actual per diem costs for the annual period just completed is the incentive factor.
(1) The incentive factor will be added to the
new reimbursement base rate to be used as the per diem rate for the following
annual period.
(2) Facilities whose
annual per unit cost decreased from the prior year shall receive their actual
per unit cost plus one and one-half the percentage increase in the Consumer
Price Index as an incentive for cost containment.
e. Administrative costs shall not exceed 18
percent of total facility costs. Administrative costs are comprised of those
costs incurred in the general management and administrative functions of the
facility. Administrative costs include, but are not necessarily limited to, the
administrative portion of the following:
(1)
Administrator wages.
(2) Business
office wages.
(3) Advertising and
marketing wages.
(4) Employer's
taxes (administrative).
(5)
Group/life and retirement benefits (administrative staff).
(6) Workers' compensation insurance
(administrative staff).
(7)
Employment advertising and recruitment (administrative staff).
(8) Criminal record checks (administrative
staff).
(9) Education and training
(administrative staff).
(10) Office
supplies (administrative staff).
(11) Telephone.
(12) Equipment rental.
(13) Home office costs.
(14) Management fees.
(15) Accounting fees.
(16) Professional organization
dues.
(17) Licensing
fees.
(18) Information technology
expenses.
(19) Legal fees-direct
patient-care-related.
(20) Legal
fees-other.
(21) Working capital
interest.
(22) General liability
insurance.
(23) Travel,
entertainment and auto expenses.
(24) Advertising and public
relations.
(25) Other.
f. Facility rates shall be rebased
using the cost report for the year covering state fiscal year 1996 and shall
subsequently be rebased each four years. The department shall consider allowing
special rate adjustments between rebasing cycles if:
(1) An increase in the minimum wage
occurs.
(2) A change in federal
regulations occurs which necessitates additional staff or expenditures for
capital improvements, or a change in state or federal law occurs, or a court
order with force of law mandates program changes which necessitate the addition
of staff or other resources.
(3) A
decision is made by a facility to serve a significantly different client
population or to otherwise make a dramatic change in program structure
(documentation and verification will be required).
(4) A facility increases or decreases
licensed bed capacity by 20 percent or more.
g. Total patient days for purposes of the
computation shall be inpatient days as determined in subrule 82.5(7) or 80
percent of the licensed capacity of the facility, whichever is greater. The
reimbursement rate shall be determined by dividing total reported patient
expenses by total patient days during the reporting period. This cost per day
will be limited by an inflation increase which shall not exceed the percentage
change in the Consumer Price Index.
h. State-owned ICFs/ID shall submit
semiannual cost reports and shall receive semiannual rate adjustments based on
actual costs of operation inflated by the percentage change in the Consumer
Price Index.
i. The projected
reimbursement for the first annual period will be determined by multiplying the
per diem rate calculated for the base period by the Consumer Price Index.
(1) The projected reimbursement for each
period thereafter (until rebasing) will be calculated by multiplying the lower
of the prior year's actual or the projected reimbursement per diem by the
Consumer Price Index.
(2) If a
facility experiences an increase in actual costs that exceeds both the actual
reimbursement and the maximum allowable base cost as determined for that annual
period, the facility shall receive as reimbursement in the following period the
maximum allowable base as calculated.
(17)
Wage add-on factor. A
wage add-on factor of $8.86 per day for community-based ICFs/ID shall be
included in rates effective July 1, 2022, and after, not subject to the maximum
allowable cost ceiling in paragraph 82.5(14)"e," until rates
are established using the cost reports for the period ending June 30, 2023.
a. In accordance with 2022 Iowa Acts, House
File 2578, section 31, the entire wage add-on factor shall be used for wages
and associated costs specific to wages, benefits, and required withholding of
direct support professionals and frontline management.
b. The wage add-on factor of $8.86 per day
shall be added to the maximum allowable base rate in subparagraph
82.5(14)"d"(1) until the next rebase using cost reports for
the period ending June 30, 2024.
c.
The wage add-on factor of $8.86 per day shall be added to the maximum allowable
cost ceiling, eightieth percentile of costs of all participating facilities in
paragraph 82.5(14)"e," until the eightieth percentile maximum
is established using the December 31, 2023, compilation for rates effective
beginning July 1, 2024.
This rule is intended to implement Iowa Code sections 249A.12 and 249A.16.
Notes
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