Nebraska Administrative Code › Topic - HEALTH AND HUMAN SERVICES SYSTEM › Title 471 - NEBRASKA MEDICAL ASSISTANCE PROGRAM SERVICES › Chapter 45 - RATES FOR NURSING FACILITY SERVICES › Section 471-45-008 - DEPRECIATION

Current through June 17, 2024
This subsection replaces Medicare regulations on depreciation in their
	 entirety, except those provisions concerning sale-leaseback and lease-purchase
	 agreements, Medicare's Provider Reimbursement Manual, HIM-15, Section 110, are
	 retained, subject to the following Medicaid depreciation regulations. At the
	 time of an asset acquisition, the nursing facility must use the American
	 Hospital Association Estimated Useful Lives of Depreciable Hospital Assets,
	 2004 edition, to determine the useful life span. In the event that the nursing
	 facility determines a useful life shorter than a life shown in the tables, the
	 facility must have documentation available to justify the unique circumstances
	 that required the shorter life.
008.01
CAPITALIZATION GUIDELINES.
Providers must devise and
  follow a written capitalization policy within the following guidelines. A copy
  of the policy must be available upon request by the Department.
008.01(A)
CAPITALIZATION
  THRESHOLD.
The capitalization threshold is a predetermined amount
  at which asset purchases must be capitalized rather than expensed. Each
  provider determines the capitalization threshold for their facility, but the
  threshold amount must be at least $100 and no greater than $5,000.
008.01(B)
ACQUISITIONS.
If a depreciable asset has at the time
  of its acquisition an estimated useful life of at least two years and an
  allowable cost equal to or exceeding the capitalization threshold, its cost
  must be capitalized and written off ratably over the estimated useful life of
  the asset. If a depreciable asset has an allowable cost less than the
  capitalization threshold, or if the asset has a useful life of less than 2
  years, its cost is allowable in the year it is acquired.
008.01(C)
ACQUISITIONS UNDER
  $100.
Acquisitions after July 1, 2005, with a per unit cost of
  less than $100 cannot be depreciated. Costs of these items are included in the
  applicable operating cost category on the cost report in the current
  period.
008.01(D)
INTEGRATED SYSTEM PURCHASES.
When items are purchased
  as an integrated system, all items must be considered as a single asset when
  applying the capitalization threshold.
008.01(E)
MULTIPLE ITEMS WITH PER
  UNIT COST GREATER THAN OR EQUAL TO $100.
Items that have a
  stand-alone functional capability may be considered on an item-by-item basis or
  as an aggregate single purchase. Each provider's capitalization policy must
  describe how the provider elects to treat these items.
008.01(F)
NON-CAPITAL
  PURCHASES.
Purchases of equipment and furnishings over $100 per
  item and under the provider's capitalization threshold are included in the
  Plant Related cost category on the Cost Report in the current period.
008.01(G)
BETTERMENTS AND
  IMPROVEMENTS.
Betterments and improvements extend the life,
  increase the productivity, or significantly improve the safety of an asset as
  opposed to repairs and maintenance which either restore the asset to, or
  maintain it at, its normal or expected service life. Repair and maintenance
  costs are always allowed in the current accounting period.