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Title: Section 86-5.19 - Depreciation for voluntary and public LTHHCP

Effective Date


86-5.19 Depreciation for voluntary and public LTHHCP.

(a) Reported depreciation based on approved historical cost of buildings, fixed equipment and capital improvements made thereto is recognized as a proper element of cost for voluntary and public LTHHCPs. Useful lives shall be the higher of the reported useful life or those useful lives from Estimated Useful Lives of Depreciable Hospital Assets, 1983 edition. Copies of this publication are available from the American Hospital Association, 840 North Lake Shore Drive, Chicago, IL 60611, and a copy is available for inspection and copying at the offices of the records access officer of the Department of Health, Corning Tower, Empire State Plaza, Albany, NY 12237.

(b) In the computation of the rates effective for voluntary LTHHCPs, depreciation shall be included on a straight-line method on plant and nonmovable equipment. Depreciation shall be funded unless the Commissioner of Health shall have determined, upon application by the LTHHCP, and after inviting written comments from interested parties, that the requested waiver of the requirements for funding is a matter of public interest and necessity. In instances where funding is required, such fund may be used only for capital expenditures with approval as required or for the amortization of capital indebtedness. Funding for plant and fixed equipment shall mean that the transfer of monies to the funded accounts shall occur by the end of the fiscal period in which the depreciation is recorded. Board-designated funds and the accrual of liabilities to the funded depreciation accounts (due to/from accounts) shall not be recognized as funding of depreciation. Deposits to the funded depreciation accounts must remain in such accounts to be considered as valid funding transactions unless expended for the purpose for which it was funded.

(c) In the computation of rates for public LTHHCPs, depreciation is to be included on a straight-line method on plant and nonmovable equipment.


VOLUME A-2 (Title 10)