New Mexico Administrative Code › Title 8 - SOCIAL SERVICES › Chapter 312 - LONG TERM CARE SERVICES - NURSING SERVICES › Part 3 - COST RELATED REIMBURSEMENT OF NURSING FACILITIES › Section 8.312.3.7 - DEFINITIONS

Current through Register Vol. 35, No. 13, July 16, 2024
A.
Accrual
				basis of accounting:
Under the accrual basis of accounting, revenue is
				recorded in the period when it is earned, regardless of when it is collected.
				The expenditures for expense and asset items are recorded in the period in
				which they are incurred, regardless of when they are paid.
B.
Allocable costs:
An item or
				group of items of cost chargeable to one or more objects, processes, or
				operations in accordance with cost responsibilities, benefits received, or
				other identifiable measure of application or consumption.
C.
Applicable credits:
Those
				receipts or types of transactions which offset or reduce expense items that are
				allocable to cost centers as direct or indirect costs. Typical examples of such
				transactions are: purchase discounts, rebates, or allowances; recoveries or
				indemnities on losses; sales of scrap or incidental services; adjustments of
				over-payments or erroneous charges; and other income items which serve to
				reduce costs. In some instances, the amounts received from the federal
				government to finance hospital activities or service operations should be
				treated as applicable credits.
D.
Cash basis of accounting:
Under the cash basis of accounting,
				revenues are recognized only when cash is received and expenditures for expense
				and asset items are not recorded until cash is disbursed for them.
E.
Charges:
The regular rates
				established by the provider for services rendered to both beneficiaries and to
				other paying patients whether inpatient or outpatient. The rate billed to the
				department shall be the usual and customary rate charged to all
				patients.
F.
Closed
				facility:
A facility which has been either voluntarily or involuntarily
				terminated from participation in the medicaid program not to include
				termination for construction of a replacement facility.
G.
Cost center:
A division,
				department, or subdivision thereof, a group of services or employees or both,
				or any other unit or type of activity into which functions of an institution
				are divided for purposes of cost assignment and allocations.
H.
Cost finding:
A
				determination of the cost of services by the use of informal procedures, i.e.,
				without employing the regular processes of cost accounting on a continuous or
				formal basis. It is the determination of the cost of an operation by the
				allocation of direct costs and the proration of indirect costs.
I.
Facility:
The actual physical
				structure in which services are provided.
J.
General service cost centers:
Those cost centers which are operated for the benefit of other general service
				areas as well as special or patient care departments. Examples of these are:
				housekeeping, laundry, dietary, operation of plant, maintenance of plant, etc.
				Costs incurred for these cost centers are allocated to other cost centers on
				the basis of services rendered.
K.
Governmental institution:
A provider of services owned and
				operated by a federal, state or local governmental agency.
L.
Imputed occupancy:
The level
				of occupancy attributed for the purpose of calculating the reimbursement
				rate.
M.
Inpatient cost
				centers:
Cost centers established to accumulate costs applicable to
				providing routine and ancillary services to inpatients for the purposes of cost
				assignment and allocation.
N.
Owner:
The entity holding legal title to the facility.
O.
Provider:
The entity
				responsible for the provision of services. The provider must have entered into
				a valid agreement with the medicaid program for the provision of such
				services.
P.
RCC:
This
				is the ratio of charges to charges. The bases or charges used in the RCC
				formula vary as to the costs to be allocated. The ratios may be expressed as
				follows:
(1) ratio of beneficiary charges to
				total charges on a departmental basis.
(2) ratio of beneficiary charges for
				ancillary services to total charges for ancillary services.
(3) ratio of total patient charges by patient
				care center to the total charges of all patient care centers.