Section 29-6512. ALLOWABLE COSTS

 

6512.1Allowable costs shall include, but not be limited to all items of expense the provider incurs in the provision of routine services related to resident care including:

 

(a)Room and board, including dietary, food, laundry and linen, housekeeping, plant operations and maintenance;

 

(b)Medical direction;

 

(c)Nursing care;

 

(d)Minor medical and surgical supplies;

 

(e)Social and resident activity services;

 

(f)Special services required by the resident, including physical, occupational, or speech therapy, oxygen therapy, but not dental care;

 

(g)Incontinency care;

 

(h)Tray service;

 

(i)Resident gowns;

 

(j)Canes, crutches, walkers and wheelchairs, excluding customized wheelchairs;

 

(k)Traction equipment and other durable medical equipment for multi-resident use;

 

(l)Special dietary services, including tube or hand feeding and special diets; and

 

(m)Laundry services, except personal laundry.

 

6512.2The occupancy rate used in determining the per diem rate for each cost category shall be the greater of:

 

(a)The actual paid occupancy, including paid reserve bed days; or

 

(b)Ninety-three percent (93%) of certified bed days available during the cost reporting period.

 

6512.3General and administrative expenses shall include but not be limited to:

 

(a)Administrative salaries, including fringe benefits;

 

(b)Professional services, including accounting and auditing expenses, fees of management consultants and legal fees;

 

(c)General liability insurance;

 

(d)Telephone;

 

(e)Licenses;

 

(f)Travel and entertainment;

 

(g)Office expenses, including services and supplies;

 

(h)Personnel and procurement;

 

(i)Dues and subscriptions;

 

(j)Home office costs;

 

(k)Interest on working capital; and

 

(l)OSHA costs.

 

6512.4Depreciation allowance shall be determined in accordance with the Medicare Principles of Reimbursement set forth at 42 CFR Part 413 Subpart G, except that:

 

(a)Only the straight line method shall be used; and

 

(b)The useful life of the assets must comply with the most recent guidelines for hospitals published by the American Hospital Association, and approved by the Medicare program.

 

6512.5Consistent use of either the component or composite asset depreciation schedule shall be required, as follows:

 

(a)Component depreciation is permitted in the case of a newly constructed facility and for recognized building improvements where the costs can be separated and acceptable useful lives determined; and

 

(b)Composite depreciation shall be applied for a newly purchased existing facility.

 

6512.6Donated assets shall be recorded at fair market value at the time received, based on the lesser of at least two bona fide appraisals.

 

6512.7Leasehold improvements shall be depreciated over the lesser of the asset's useful life or the remaining life of the lease.

 

6512.8When a facility is sold, the depreciation basis shall be subject to the limitation of the reevaluation of assets mandated by section 1861(v) (1) (o) of Title XVIII of the Social Security Act.

 

6512.9Necessary and proper interest on both current and capital indebtedness shall be allowable costs, determined in accordance with the Medicare Principles of Reimbursement set forth at 42 CFR 413.153.

 

6512.10Bad debts, charity, and courtesy allowances, as defined at 42 CFR 413.80(b), shall not be recognized as allowable costs.

 

6512.11Cost of services, facilities, and supplies furnished to the provider by an organization related to the provider by common ownership or control are included in the allowable cost of the provider at the cost to the related organization. The cost shall not exceed the price of comparable services, facilities or supplies that could be purchased by independent providers in the Washington metropolitan area.

 

6512.12Return on equity capital of proprietary providers shall be determined according to the Medicare Principles of Reimbursement.

 

6512.13Reasonable rental expense shall be an allowable cost for leasing of a facility from a non-related party if it is an arm's length transaction.

 

6512.14The purchase or rental by a facility of any property, plant, equipment, services and supplies shall not exceed the cost that a prudent buyer would pay in the open market to obtain these items.

 

6512.15District of Columbia provider tax costs shall be excluded from allowable costs.

 

6512.16Home office costs and management fees shall be subject to the following conditions and limitations:

 

(a)Home office cost allocations and management fees between related parties shall be reported without mark-up by the nursing facility;

 

(b)Costs that are not allowable, such as those related to nonworking officers or officers' life insurance, shall not be included in home office allocations or management fees;

 

(c)The nursing facility's audited certified cost allocation plan relating to home office and management fees shall be provided.

 

6512.17Respiratory therapy costs including equipment rental, supplies and labor and staffing costs associated with providing ventilator care shall be excluded from allowable costs.

 

6512.18For purposes of this section, the phrases "related to the provider", "common ownership" and "control" shall have the same meaning as set forth in 42 CFR 413.17(b).

 

source

Final Rulemaking published at 53 DCR 1370 (February 24, 2006).