101 CMR, § 129.04 - General Payment Provisions

(1) Reimbursement as Full Payment. Each ICF that provides services to publicly aided patients shall, as a condition of receipt of payment, accept reimbursement at rates established by EOHHS as full payment and discharge of all obligations to such individuals. There shall be no duplication or supplementation of payment for services provided to publicly assisted patients.

(2) Reimbursement Limitation. Reimbursement determined under 101 CMR 129.00 for publicly assisted patients shall not exceed that reimbursement that would result from application of the Principles of Reimbursement of Provider Costs established under 42 U.S.C. §§ 1395 et seq., the Medicare Act.

(3) Allowable Costs.

(a) Pursuant to the requirements and rate and charge determination formulas of 101 CMR 129.00, ICFs shall be reimbursed for allowable costs. These costs must be reasonable costs and must be directly related to health care and services.

(b) Except as otherwise required in 101 CMR 129.00 and the instructions to the ICF Cost Report, allowable costs for inpatient care and services shall be determined in accordance with the Principles of Reimbursement for Provider Costs under 42 U.S.C. §§ 1395 et seq. as set forth in 42 CFR 413, et seq. and the Provider Reimbursement Manual.

(c) Depreciation shall be an allowable cost provided that it is based on historical cost and is calculated by the straight line method. The useful life of assets shall be determined in accordance with the most recent version of the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets.

(d) Costs for leased facilities and fixed equipment shall be an allowable cost to the extent that such costs do not exceed the allowable cost that would have been recognized if the ICF had purchased the equipment or facilities and to the extent that such costs do not exceed rental charges of comparable equipment or facilities.

(e) Costs for equipment and facilities leased under contractual provisions that provide a purchase option at the end of the lease term without more than nominal payment shall not be allowed. Depreciation shall be allowed pursuant to 101 CMR 129.04(3)(c).

(f) Interest expense in excess of interest income shall be an allowable cost.

(g) Administrative and general cost in excess of miscellaneous income shall be an allowable cost.

(h) Overhead expenses shall be allocated to non-patient services.

(i) Costs for consultants shall be amortized over the useful life of the asset that consultant work is related to, and the amortized cost shall be an allowable cost.

(j) Payments to professional organizations, trade associations and the like, and comprehensive health planning agencies shall be allowed.

(k) Limitation of basis for depreciation, interest, and equity. Where there has been a change of ownership on or after July 18, 1984, the allowable basis of fixed assets shall be the lower of the acquisition cost or the basis allowed the immediate prior owner reduced by the amount of actual depreciation paid to the prior owner of the facility during all years in which the prior owner participated in the MassHealth program.

(4) Excluded Costs. The following costs are excluded under 101 CMR 129.00:

(a) costs for whole blood, appliances, and patient take-home items;

(b) bad debts, charity, courtesy allowances, and free care to medically indigent persons; and

(c) 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 payment has previously been made by the MassHealth agency.

Notes

101 CMR, § 129.04