He-E 806.01 - Definitions

He-E 806.01. Definitions

(a) "Accrual method of accounting" means revenues are reported in the period when they are earned, regardless of when they are collected, and expenses are reported in the period in which they are incurred, regardless of when they are paid.

(b) "Administration function" means those duties which are necessary to the general supervision and direction of the current operations of the facility.

(c) "Allowances" means the deductions granted for damage, delay, shortage, imperfection, or other causes, excluding discounts and returns.

(d) "Approved educational activities" means formally organized or planned programs of study engaged in by a nursing facility (NF) provider and his or her staff in order to enhance the quality of resident care in a facility or to improve the administration of the facility.

(e) "Arm's length transaction" means a transaction in which one party is not associated with, affiliated with, or controlled by the other party.

(f) "Bad debts" means the amounts considered to be uncollectable from accounts and notes receivable which were created or acquired in providing services.

(g) "Bed day" means any paid day of care at a nursing facility regardless of the payer.

(h) "Centers for Medicare and Medicaid Services (CMS)" means the federal agency responsible for administering the Medicare and Medicaid programs, formerly known as the Health Care Financing Administration or HCFA.

(i) "Chain operation" means an organization which consists of a group of 2 or more health care facilities which are owned, leased or controlled by a home office.

(j) "Charity allowances" means the reductions in charges made by the provider of services because of the indigence of the resident.

(k) "Compensation" means the total benefit provided for the services rendered to the NF provider. It includes fees, salaries, wages, payroll taxes, fringe benefits, and other increments paid to, or for the benefit of, those providing the services.

(l) "Cost center" means an organizational unit, generally a department or its subunit, having a common functional purpose for which direct and indirect costs are accumulated, allocated and apportioned.

(m) "Courtesy allowances" means reductions in charges in the form of allowances to physicians, clergy, members of religious orders, or others as approved by the governing body of the facility, for services received from the NF provider.

(n) "Department" means the New Hampshire department of health and human services.

(o) "Discounts" means reductions in the cost of purchases classified as cash, trade or quantity discounts.

(p) "Fair market value" means the price that the asset would bring by bona fide bargaining between well-informed buyers and sellers at the date of acquisition.

(q) "Generally accepted accounting principles (GAAP)" means accounting principles approved by the American Institute of Certified Public Accountants or the Institute of Management Accountants.

(r) "Hill-Burton funds" means federal funds made available through the Hill-Burton Act, Title VI of the Public Health Service Act, for building or remodeling.

(s) "Historical cost" means the cost incurred by the present owner in acquiring the asset, subject to the limitations specified in 42 CFR 413.134(j).

(t) "Home office" means the controlling organization of a chain operation which furnishes central management and administrative services such as accounting, purchasing, and personnel services, but is not an NF provider.

(u) "Home office costs" means costs of a home office to furnish services to its related organizations.

(v) "Intermediate care facility for individuals with intellectual disabilities (ICF-IID)" means a nursing care facility certified to provide long term care for individuals with intellectual disabilities or individuals with related conditions, such as cerebral palsy.

(w) "Luxurious" means the aspect of any item or service which provides comfort, pleasure or enjoyment but is not essential for resident care.

(x) "Necessary interest" means interest, other than working capital interest or interest on lines of credit, which are incurred:

(1) On a loan made to satisfy a financial need of the NF provider for a purpose reasonably related to resident care; and

(2) On a loan repaid in payments over a period of time not to exceed the estimated useful life of the asset purchased with the loan.

(y) "Net cost" means the cost of approved activities less any reimbursement from grants, tuition and specific donations.

(z) "Nursing facility (NF)" means an institution or a distinct part of an institution, including ICF-IIDs, that provide one or more of the following as defined in Section 1919(a) of the Social Security Act and is not primarily for the care and treatment of mental diseases:

(1) Skilled nursing care and related services for residents who require medical or nursing care;

(2) Rehabilitation services for the rehabilitation of injured, disabled or sick individuals; or

(3) On a regular basis, health-related care and services to individuals who because of their mental or physical condition require care and services above the level of room and board which can be made available to them only through an institution.

(aa) "Nursing facility rate" means the Medicaid per diem for each certified NF as set by the department.

(ab) "Picture date" means the date on which resident data is gathered from all facilities to be used to calculate the Medicaid rate.

(ac) "Proper interest" means that interest is incurred at a rate not in excess of what a prudent borrower would have had to pay in an arm's length transaction at the time the loan was made.

(ad) "Prospective per diem rate" means a per diem amount calculated using a historical cost period as a basis and inflated forward.

(ae) "Quantity discounts" mean reductions from list prices granted because of the size of individual or aggregate purchase transactions.

(af) "Related organizations" means organizations that are associated or affiliated with, have control over, or are controlled by, each other.

(ag) "Related parties" means parties that are associated or affiliated with, have control over, or are controlled by, each other.

(ah) "Reserved bed day" means a 24-hour period, midnight to midnight, when the resident of a NF is not present during the midnight census at the conclusion of the day, and that is chargeable to Medicaid.

(ai) "Routine services" means regular room, dietary and nursing services, minor medical and surgical supplies, and the use of equipment and facilities.

(aj) "State owned and operated institutions" means the Glencliff Home for the Elderly.

(ak) "Straight-line method of depreciation" means that the cost or other basis less its estimated salvage value, if any, is determined first, and then this amount is distributed in equal amounts over the period of the estimated useful life of the asset.

(al) "Trade discounts" mean reductions from list prices granted to a certain class of customers before consideration of credit terms.

(Amended by Volume XXXVIII Number 02, Filed January 11, 2018, Proposed by #12440, Effective 12/23/2017, Expires 6/21/2018. Amended by Volume XXXVIII Number 28, Filed July 12, 2018, Proposed by #12566, Effective 6/29/2018, Expires 6/29/2028.)

#8547, eff 1-24-06 (formerly He-W 593.01); ss by #9623, eff 12-24-09

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