Pennsylvania Code › Title 55 - HUMAN SERVICES › Part III - MEDICAL ASSISTANCE MANUAL › Chapter 1181 - NURSING FACILITY CARE › Subchapter B - MANUAL FOR ALLOWABLE COST REIMBURSEMENT FOR SKILLED NURSING AND INTERMEDIATE CARE FACILITIES › OTHER COST ITEMS › Section 1181.259a - Elimination of funded depreciation-statement of policy

Current through Register Vol. 54, No. 28, July 13, 2024
(a) The Department has abolished at 55 Pa.
					 Code §§
											1181.259(q) and
					 6211.79(q)
					 (relating to depreciation allowance) the requirement that county and general
					 nursing facilities fund the depreciation portion of their MA payment
					 rate.
(b) The Department's decision
					 to repeal the funded depreciation requirement permits many providers, currently
					 required to fund depreciation, to eliminate funding, to liquidate present
					 funded depreciation accounts, if they choose to do so, and to resolve present
					 administrative appeals. It also eliminates the need of providers that choose to
					 liquidate their funded depreciation accounts to complete Schedule M of the MA
					 11 in cost reporting periods following the period in which the funded
					 depreciation account was liquidated. Providers that choose to liquidate their
					 funded depreciation account should document their decision to do so for MA
					 audit purposes; the funded depreciation account should then be liquidated prior
					 to the start of their next fiscal year. The Department will treat the offset of
					 investment income earned on the funded depreciation account of providers that
					 choose to liquidate the account in accordance with the principles of Medicare's
					 Health Insurance Manual 15 (HIM-15).
(c) Providers are not required to liquidate
					 their funded depreciation accounts. They may choose to continue to maintain the
					 funded depreciation accounts as a prudent fiscal management practice and in
					 order to immunize income earned on the fund from offset against interest
					 expense. To immunize the investment income earned on the funded depreciation
					 account from offset, the account should be maintained in accordance with the
					 principles of HIM-15. Income earned in an account maintained under the
					 Department's guidelines between July 1, 1983, and the start of the provider's
					 next fiscal year, will not be subject to offset as a result of an inconsistency
					 between the Department's guidelines and the guidelines for funded depreciation
					 accounts in HIM-15, as long as the income is retained in the account and the
					 account itself is thereafter maintained according to HIM-15 guidelines.
					 Providers who retain the funded depreciation account but have not maintained it
					 in accordance with the HIM-15 principles, will have until the start of their
					 next fiscal year to reorganize their account in order to maintain it in
					 accordance with HIM-15 guidelines.
(d) The Office of Medical Assistance Programs
					 will cease making disallowances based on the funding requirement.
This section cited in 55 Pa. Code §
													6211.80 (relating to elimination
						  of funded depreciation requirement-statement of
						  policy).