Indiana Administrative Code › Title 405 - OFFICE OF THE SECRETARY OF FAMILY AND SOCIAL SERVICES › Article 1 - MEDICAID PROVIDERS AND SERVICES › Rule 14.6 - Rate-Setting Criteria for Nursing Facilities › Section 14.6-16 - Unallowable costs; cost adjustments; charity and courtesy allowances; discounts; rebates; refunds of expenses

Current through July 10, 2024
Authority: IC
				  12-15-1-10; IC
				  12-15-21-2
Affected: IC
				  12-13-7-3; IC 12-15
Sec. 16.
(a) Charity,
				courtesy allowances, discounts, refunds, rebates, and other similar items
				granted by a provider shall not be included in allowable costs. Bad debts
				incurred by a provider shall not be an allowable cost.
(b) Payments that must be reported on the
				annual financial report form that are received by a provider, an owner, or
				other official of a provider in any form from a vendor shall be considered a
				reduction of the provider's costs for the goods or services from that
				vendor.
(c) The cost of goods or
				services sold to nonpatients shall be offset against the total cost of such
				service to determine the allowable patient-related expenses. If the provider
				has not determined the cost of such items, the revenue generated from such
				sales shall be used to offset the total cost of such services.
(d) For nursing facilities that are certified
				to provide Medicare-covered skilled nursing facility services and are required
				by the Medicare fiscal intermediary to submit a full Medicare cost report, the
				office shall remove from allowable indirect care and administrative costs the
				portion of those costs that are allocable to therapy services reimbursed by
				other payers and nonallowable ancillary services. In determining the amount of
				indirect care costs and administrative costs that shall be removed from
				allowable costs, the office shall calculate a ratio of indirect cost to direct
				cost based on the direct and total therapy and nonallowable ancillary costs
				reported on each facility's Medicare cost report.
(e) For nursing facilities that are certified
				to provide Medicare-covered skilled nursing facility services that are not
				required by the Medicare fiscal intermediary to submit a full Medicare cost
				report, the office shall remove from allowable indirect care and administrative
				costs the portion of those costs that are allocable to therapy services
				reimbursed by other payers and nonallowable ancillary services. In determining
				the amount of indirect care costs and administrative costs that shall be
				removed from allowable costs, the office shall remove the indirect and
				administrative costs reimbursed by other payers based on a statewide average
				ratio, excluding hospital based facilities, of indirect costs to direct costs
				for such therapy and ancillary services, as determined from full Medicare cost
				reports. The statewide average ratio shall be computed on a statewide basis
				from the most recently completed desk reviewed annual financial report and
				shall be maintained by the office with revisions made four (4) times per year
				effective January 1, April 1, July 1, and October 1.