Title: Section 86-4.21 - Allowable costs
86-4.21 Allowable costs.
(a) To be considered as allowable in determining reimbursement rates, costs must be actual, reasonable and properly chargeable to necessary patient care. Except as otherwise provided in this Part, or in accordance with specific determination by the commissioner, allowable costs shall be determined by the application of the principles of reimbursement developed for determining payments under the title XVIII (Medicare) program.
(b) Allowable costs shall not include costs for services that have not been approved by the commissioner.
(c) Allowable costs shall include a monetary value assigned to services provided under contract by religious orders and to services rendered by an owner and operator of a facility or an operator's relatives in accordance with section 86-4.27 of this Subpart.
(d) Allowable costs may not include amounts in excess of reasonable or maximum title XVIII (Medicare) costs or in excess of customary charges to the general public. This provision shall not apply to services furnished by public providers free of charge or at a nominal fee. Allowable costs shall not include any amount for bad debts.
(e) Allowable costs shall not include expenses or portions of expenses reported by individual facilities which are determined by the commissioner not to be reasonably related to the efficient production of service because of either the nature or amount of the particular item.
(f) Allowable costs shall not include costs which principally afford diversion, entertainment or amusement to facility owners, operators or employees.
(g) Allowable costs shall not include any interest charged or penalty imposed by governmental agencies or courts, or the costs of policies obtained solely to insure against the imposition of such penalties.
(h) Allowable costs shall not include the direct or indirect costs of advertising (except help-wanted ads), public relations and promotion. Reasonable direct and indirect costs of outreach services designed to attract patients in need of medical services shall be allowable.
(i) Allowable costs shall not include costs or contributions or other payments to political parties, candidates or organizations.
(j) Allowable costs shall include only that portion of the dues paid to any professional association which has been determined by the commissioner to be allocable to expenditures other than for public relations, advertising and political contributions.
(k) Allowable costs shall not include any element of cost determined by the commissioner to have been created by the sale of a facility.
(l) Allowable costs shall include the cost of services incurred by the facility's staff to provide offsite services to registered patients of the facility. Allowable costs shall not include the cost of offsite services provided to nonregistered patients or the cost of services provided through arrangements with other facilities. When the cost of such services cannot be established, income from such services shall be used to adjust allowable costs.
(m) Allowable costs shall include the cost of National Health Service Corps personnel, based upon the liability incurred by the facility for the report period, not actual expenditures for the personnel during the report period.
(n) Allowable costs shall not include the cost of ordered ambulatory services. When the cost of such services cannot be determined, income from the services may be used to adjust allowable costs.
(o) Allowable costs may include certain costs not normally covered under Medicare (title XVIII of the Social Security Act), including but not limited to the cost of dental services, patient transportation, prescription drugs, eyeglasses, prosthetic or orthotic devices, podiatry services.
(p) Allowable costs shall not include the costs of education services, including special classroom programs for preschool and school-age children unable to attend public schools, unless such services are medically necessary.
(q) Allowable costs shall include the costs of recreational services rendered in accordance with a physician's plan of treatment. The costs of recreational services that provide leisure activities shall not be allowable.
(r) Allowable costs shall not include costs related to inpatient services rendered by hospitals or services related to living accommodations in a residential treatment program.
(s) All research costs shall be excluded from allowable costs. Research shall include those studies and projects which have as their purpose the enlargement of general knowledge and understanding, are experimental in nature and hold no prospect of immediate benefit to the facility or its patients.
(t) The costs of educational activities for employees, less tuition paid or reimbursed by other than the facility and supporting tuition or related grants, shall be allowable, provided such activities are directly related to patient care services.
VOLUME A-2 (Title 10)