Title: Section 86-5.17 - Allowable costs

86-5.17 Allowable costs.

(a) To be considered as allowable in determining reimbursement rates, costs shall be properly chargeable to necessary patient care. Except as otherwise provided in this Subpart, 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 title XVIII of the Federal Social Security Act (Medicare) program.

(b) Allowable costs shall include a monetary value assigned to services provided by religious orders and for services rendered by an owner and operator of a LTHHCP.

(c) Allowable costs shall not include amounts in excess of reasonable or maximum title XVIII of the Federal Social Security Act (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.

(d) Allowable costs shall not include expenses or portions of expenses reported by individual LTHHCP which are determined by the commissioner not to be reasonably related to the efficient production of long-term home health care services because of either the nature or the amount of the particular item.

(e) Allowable costs shall not include costs not properly related to patient care or treatment which principally afford diversion, entertainment or amusement to owners, operators or employees of LTHHCPs.

(f) Allowable costs shall not include any interest charged related to rate determination or penalty imposed by governmental agencies or courts, and the costs of policies obtained solely to insure against the imposition of such a penalty.

(g) Allowable costs shall not include costs of contributions or other payments to political parties, candidates or organizations.

(h) Allowable costs shall include only that portion of the dues paid to any professional association which has been demonstrated, to the satisfaction of the commissioner, to be allocable to expenditures other than for public relations advertising or political contributions.

(i) Allowable costs shall not include the interest paid to a lender related through control, ownership, affiliation, or personal relationship to the borrower, except in instances where the prior approval of the Commissioner of Health has been obtained.

(j) Allowable costs shall be reduced by income earned for Medicare Part B eligible services.

(k) Allowable costs shall include those costs allocated to the LTHHCP from a related organization to the extent that:

(1) those costs are reasonably related to the efficient production of long-term home health care services; and

(2) the bases of allocation of such costs are consistent with regulations applicable to the cost reporting of the related organization.