Or. Admin. R. 411-070-0359 - Allowable Costs
(1) ALLOWABLE
COSTS. Allowable costs are the necessary costs incurred for the customary and
normal operation of a facility, to the extent that they are reasonable and
related to resident services.
(a) Accounting,
Auditing, and Data Processing -- The costs of recording, summarizing, and
reporting the results of operations are allowable.
(b) Advertising -- Help wanted advertising
and the expense related to the alphabetical listing in the yellow pages of a
phone directory are allowable.
(c)
Allowable Workers Compensation Dividends (Refunds) or Billings of the nursing
facility are those dated in the fiscal reporting period.
(d) Auto and Travel Expense -- Expense of
maintenance and operation of a vehicle and travel expense related to resident
services are reimbursable. The allowance for mileage reimbursement must not
exceed the amount determined reasonable by the Internal Revenue Service for the
period reported. Allowable out-of-state travel is restricted to Washington,
Idaho, and Northern California, no farther south than San Francisco. One out of
state/contiguous area trip per year for two employees shall be allowed, as long
as it relates to resident services.
(e) Bad Debts -- Bad debts related to Title
XIX recipients are allowable.
(f)
Bank and Finance Charges -- Charges for routine maintenance of accounts are
allowable.
(g) Communications --
Charges for routine telephone service, including pagers, and cable television
fees, are allowable.
(h)
Compensation of Owners -- Owner's compensation in accordance with OAR
411-070-0330 is allowable.
(i)
Consultant Fees -- Consultant fees are allowable provided they meet the
criteria as outlined in OAR 411-070-0320.
(j) COVID-19 -- Costs of COVID-19 related
expenses not reimbursed by the State of Oregon or the federal government are
allowable. The Emergency Health Care Center (EHCC) revenue is
non-allowable.
(k) Criminal Records
Checks -- Costs of criminal records checks of facility employees if mandated by
federal or state law are allowable.
(l) Depreciation and Amortization --
Depreciation schedules on buildings and equipment must be maintained.
Depreciation expense is not allowable for land. Lease-hold improvements may be
amortized. Depreciation and amortization must be calculated on a straight-line
basis and prorated over the estimated useful life of the asset. Effective July
1, 2003, these costs must be reported in accordance with OAR 411-070-0365, OAR
411-070-0375, and OAR 411-070-0385.
(m) Education and Training -- Registration,
tuition, and book expense associated with education and training of personnel
is allowed provided it is related to resident services. The costs associated
with training and certifying nurse aides are not allowable for inclusion in the
annual NFFS. These costs are reimbursed separately by SPD per OAR
411-070-0470.
(n) Employee Benefits
-- Employee benefits that are made available to all employees, are for the
primary use of the employees, are generally considered by the industry as
reasonable and important benefits to provide for employees, are not taxable as
wages, and are allowable to the extent of employer participation.
(o) Food -- Food products and supplements
used in food preparation are allowable.
(p) Home Office Costs -- Home office costs
are allowable in accordance with OAR 411-070-0345.
(q) Insurance -- Premiums for insurance on
assets or for liability purposes, including vehicles, are allowable to the
extent that they are related to resident services. Self-insurance costs are
allowable only when expense is actually incurred.
(r) Interest -- Interest on debt related to
the provision of resident services is an allowable expense, except on or after
July 1, 1984, interest expense related to that portion of the acquisition price
of a long-term facility that exceeds the depreciable basis (OAR 411-070-0375)
will not be reimbursable.
(s) Legal
Fees -- Legal fees directly related to resident services are allowable. Legal
fees related to non-allowable costs are not allowable. Legal fees claimed as
related to resident services must be explained and listed on Schedule A. Fees
related to legal and administrative actions to resolve a disagreement with the
state shall be allowable if the action is resolved in the provider's favor, and
the judge or hearings officer does not order the state to pay the provider's
legal fees.
(t) Licenses, Dues, and
Subscriptions -- Fees for facility licenses, dues in professional associations,
and costs of subscriptions for newspapers, magazines, and periodicals provided
for resident and staff professional use are allowable.
(u) Linen and Bedding -- Linen and bedding
costs for the facility are allowable.
(v) Management Fees -- Management fees are
allowable provided they meet the criteria for OAR 411-070-0350.
(w) Postage and Freight -- Postage expense is
considered an office supply cost. Freight must be posted to the same account as
the item purchased.
(x) Property
Costs -- Costs related to purchase or lease of a facility are to be reported in
Accounts 452 through 459 and 461.
(y) Purchased Services -- Services that are
received under contract arrangements are reimbursable to the extent that they
are related to resident services and the sound conduct and operation of the
facility.
(z) Rent or Lease
Payments -- Payments for the lease or rental of land, buildings, and equipment
are to be reported. Payments for lease agreements entered into with a related
party are limited to the lower of actual costs or the lease payments.
(aa) Repairs and Maintenance -- Costs of
maintenance and minor repairs are allowable when related to the provision of
resident services.
(bb) Salaries
(Except Owners and Related Parties) -- Salaries and wages of all employees
engaged in resident service activities or overall operation and maintenance of
the facility, including support activities of home offices and regional
offices, are allowable.
(cc)
Supplies -- Cost of supplies used in resident services or providing services
related to resident services are allowable.
(dd) Taxes -- Property taxes on assets used
in rendering resident services are allowable. Long term facility taxes paid on
resident days are allowable, effective July 1, 2003.
(ee) Utilities -- Costs for facility heating,
lighting, water-sewer, and garbage provisions are allowable.
(ff) Utilization Review -- Costs incurred for
utilization review are Medicare related and are not allowable for Medicaid
reimbursement.
(2)
EXCEPTIONS. Exceptions to the items listed in section (1) of this rule must be
approved in writing to be allowable. Exceptions shall not be granted for the
following items:
(a) Amortization of
non-competitive agreement;
(b)
Goodwill;
(c) Federal and other
governmental income taxes;
(d)
Penalties and fines;
(e) Costs of
services and items otherwise reimbursable through DMAP, other third party
payors (see section (3) of this rule), or the resident's personal
funds;
(f) The cost related to the
functioning of Corporate Boards of Directors;
(g) Advertising for purposes of soliciting
potential residents, except for listings in the yellow pages (see section
(1)(b) of this rule);
(h) The cost
of salaries and supplies devoted to religious activities; or
(i) Gifts and contributions.
(3) THIRD PARTY PAYORS. The
purpose of this section is to assure that facilities are not paid twice, once
through the Medicaid bundled rate and again through a third party payor, for
providing a service. This section includes both allowed and non-allowed costs.
(a) Facilities must bill third party payors
for nursing facility services whenever payment from a third party payor is or
may be available. Examples of such payors are Medicare, Veterans
Administration, insurance companies, or a private resident when the items are
not included in the basic rate.
(b)
Failure to bill or collect from third party payors whenever appropriate may not
cause these expenses to be considered allowable.
(c) The cost of services incurred for therapy
services performed by non-employee therapists are reimbursable through a third
party payor or DMAP and are non-allowable on the NFFS.
(d) The cost of supplies and equipment
medically necessary in the performance of therapy services that are
reimbursable through a third party payor or DMAP, are non-allowable on the
NFFS.
Notes
Statutory/Other Authority: ORS 410.070 & 414.065
Statutes/Other Implemented: ORS 410.070 & 414.065
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