Pennsylvania Code › Title 61 - REVENUE › Part II - Auditor General › Subpart C - Audits of State-Aided Institutions › Chapter 521 - FINANCIAL REPORT TO COMMONWEALTH › Section 521.7 - Specific instructions

Current through Register Vol. 54, No. 28, July 13, 2024
Form AG12 shall be completed in accordance with the
					 following instructions:
Page 1. Provider Identification and
					 Certifications
This page provides for identification of the provider and
					 the period covered by the report. Certification is required by the provider's
					 administrator, chief financial officer, and by the preparer if other than the
					 provider.
Page 2. Inpatient Statistics and Reimbursable
					 Costs
I.
Statistical
				  Data.
Inpatient bed complement and occupancy. The bed complement
					 is classified by the number of beds regularly available for inpatient routine
					 services in the institution. Bassinets are those located in the nursery for
					 regular use by newborn infants.
Separate statistics are required for reporting "General
					 Care Units" and "Special Care Units." A special care unit is defined as one in
					 which the care required is extraordinary, on a concentrated and continuous
					 basis, and must be physically identifiable as separate from general care areas.
					 There must be specific written policies for each of such designated units which
					 include, but are not limited to, burn, coronary care, pulmonary care, trauma
					 and intensive care units but exclude postoperative recovery rooms, post
					 anesthesia recovery rooms, or maternity labor rooms.
Statistics for the special care units should be entered in
					 the aggregate in column 2 of Section I; the detail statistics for each of such
					 special care units must be separately recorded as indicated in Section
					 II.
Items No. 1 and No. 2
. State the number
					 of beds and, separately, newborn bassinets available for use at the beginning
					 of the period by each classification of patient. Enter all data applicable to
					 general care units in column 1 and data applicable to special care units in
					 column 2.
Item No. 3
. Total bed and bassinet days
					 available. Compute the total days available for the period by multiplying the
					 number of beds and bassinets by the number of days in the period. Any increase
					 or decrease in the number of beds must be taken into consideration as well as
					 the number of days elapsed during such increase or decrease.
Items No. 4, 5 and 6. Inpatient days
. A
					 patient day is the period of service for one day of care provided an inpatient
					 adult, child, or newborn infant. Newborn inpatient days are counted as those
					 days newborn infants occupy bassinets in the nursery. Days of care for infants
					 remaining after the mother's discharge and transferred from the nursery should
					 be counted with other patient days and not included in the count of newborn
					 inpatient days.
The day of the patient's admission is counted but not the
					 day of discharge. A patient admitted and discharged on the same day is counted
					 as one patient day, provided a regular hospital bed is occupied and a hospital
					 chart is set up for the patient.
Total patient days applicable to all patients are
					 classified between general care units and special care units in columns 1 and 2
					 respectively. Compensable inpatient days of care eligible for reimbursement
					 under the Medical Assistance Program are reported in the designated columns
					 applicable to the respective classification of service in column 3 and in
					 column 4.
Item 7. Percent occupancy
. The ratio of
					 actual patient days to the total available bed days should be shown separately
					 for each classification. Determine the ratio for each classification of
					 patients (columns 1 and 2) by dividing the actual inpatient days, line 6, by
					 the total bed days available for the classification, line 3. Example:
Actual patient days-general care units ... 58,400
Total general care unit days available during year (200
					 beds x 365 days) ... 73,000
Percent Occupancy-general care units (58,400 ÷
					 73,000) ... 80%
Item 8. Discharges, including deaths
. The
					 formal release of patients. The day on which the patient begins a leave of
					 absence is treated as a day of discharge and is not counted as an inpatient day
					 unless he returns to the hospital by midnight of the same day. The day the
					 patient returns to the hospital from such an absence is treated as a day of
					 admission and is counted as an inpatient day if he is present at midnight of
					 that day.
Item 10. Admissions
. An inpatient
					 admission is the acceptance by the provider of a patient for service involving
					 the occupancy of a hospital bed, crib, or bassinet, and the maintenance of a
					 hospital chart during the period of care. Births of newborn infants in the
					 institution are counted as admissions and are to be included in the total
					 number reported.
Item 11. Average number of employes for
					 period
. The number of fulltime equivalent employes is determined by
					 adding the total number of hours worked by all full-time and part-time employes
					 for a specific period and dividing the sum by the number of hours in the
					 standard work period. Example:
Total hours worked by all employes for fiscal year ...
					 1,040,000
Standard hours worked by full-time employe (40 hours X 52
					 weeks) ... 2,080
Number of full-time equivalent employes (1,040,000 total
					 hours ÷ 2,080 standard hours) ... 500
II.
Determination of Reimbursable
				  Cost
This section provides for summarizing reimbursable costs
					 applicable to the Medical Assistance Program by users of either the
					 DEPARTMENTAL or COMBINATION method of apportionment.
The cost of inpatient routine services for Medical
					 Assistance patients is determined on the basis of a separate average cost per
					 diem for general care units:
Line 1. General care units.
Column 1
. Enter the total inpatient days
					 of service provided all patients. This total must agree with the number of days
					 entered in Section 1, line 6, column 1.
Column 2
. Enter the total inpatient days
					 of service provided Medical Assistance patients. This total must agree with the
					 number of days entered in Section I, line 6, column 3. It is required that the
					 reported days and related charges applicable to Medical Assistance patients be
					 supported by auditable summaries and detail records (kept available for
					 examination and verification) of the eligibility of patients and approvals for
					 services and charges.
Column 3
. Enter the average cost per diem
					 brought forward from Schedule C, page 8, line 3 of column 8.
Column 4
. Provides for entering the
					 routine service costs applicable to Medical Assistance patients by providers
					 using the DEPARTMENTAL METHOD of apportioning costs. The amount is determined
					 by multiplying the average cost per diem of general care units (column 3) times
					 the eligible inpatient days of care provided Medical Assistance patients
					 (column 2).
Column 5
. Provides for entering the
					 routine service costs applicable to Medical Assistance patients by providers
					 using the COMBINATION METHOD of apportioning costs. The amount is determined by
					 multiplying the average cost per diem of general care units (column 3) times
					 the eligible inpatient days of care provided Medical Assistance patients
					 (column 2).
Lines 2-6. Special care units.
These lines provide for the apportionment of inpatient
					 routine service cost of special care units to the Medical Assistance Program.
					 Under the DEPARTMENTAL METHOD, reimbursement is determined on the basis of an
					 average cost per diem for each special care unit. Under the COMBINATION METHOD,
					 reimbursement is determined on an aggregate average cost per diem for all
					 special care units.
Column 1
. Enter the total days of service
					 for each special care unit on lines 2 through 5. Enter the sum total days for
					 all such units on line 6. This total must agree with the number of days entered
					 in Section I, line 6, column 2.
Column 2
. Enter the total inpatient days
					 of service provided Medical Assistance patients, for each special care unit, on
					 lines 2 through 5. Enter the sum total Medical Assistance days for all such
					 units on line 6. This total must agree with the number of days entered in
					 Section I, line 6, column 4.
Column 3
. Enter the average cost per diem
					 brought forward from Schedule C:
Providers using the DEPARTMENTAL METHOD will bring forward
					 the average cost per diem from Schedule C, page 8, column 8, lines 4 through 7,
					 and enter such amounts on the appropriate line (2 through 5) applicable to each
					 specified special care unit.
Providers using the COMBINATION METHOD will bring forward
					 the average cost per diem from Schedule C, page 8, column 8, line 8, and enter
					 that amount on line 6.
Column 4
. Provides for entering the
					 routine service cost of special care units applicable to Medical Assistance
					 patients by users of the DEPARTMENTAL METHOD of apportioning costs. The amount
					 is determined by multiplying the average cost per diem for each special care
					 unit (column 3) times the eligible special care unit days of care provided
					 Medical Assistance patients (column 2).
Column 5
. Provides for entering the
					 routine service cost of special care units applicable to Medical Assistance
					 patients by users of the COMBINATION METHOD of apportioning costs. The amount
					 is determined by multiplying the aggregate average cost per diem for all
					 special care units (column 3, line 6) times the sum total of eligible special
					 care unit days of care provided Medical Assistance patients (column 2, line
					 6).
Line 7. Ancillary services.
Line 7 provides for entering the ancillary service costs
					 apportioned to care provided Medical Assistance patients. The ancillary service
					 costs are apportioned on Schedule C, page 8, and brought forward to page 2,
					 line 7, column 4 (DEPARTMENTAL), or column 5 (COMBINATION).
Line 8. Reimbursable cost-Medical Assistance
					 Program.
Column 4
. The sum of the figures in column
					 4 (line 1, general care units cost; lines 2-5, special care units cost; and
					 line 7, ancillary services cost) is entered on line 8, column 4, and is the
					 reimbursable cost applicable to Medical Assistance patients as determined by
					 providers using the DEPARTMENTAL METHOD of cost apportionment.
Column 5
. The sum of the figures in column
					 5 (line 1, general care units cost; line 6, special care units cost; and line
					 7, ancillary service cost) is entered on line 8, column 4, and is the
					 reimbursable cost applicable to Medical Assistance patients as determined by
					 providers using the COMBINATION METHOD of cost apportionment.
Cost Finding
Procedures and methods for cost finding, and for
					 determining reimbursable costs applicable to services provided Medical
					 Assistance patients, are incorporated in the forms provided.
In the preparation of this report under the DEPARTMENTAL
					 METHOD of cost apportionment, costs attributable to nonrevenue-producing
					 centers (general service cost centers) are allocated, by the use of step-down
					 method procedures, to all other cost centers served. DEPARTMENTAL METHOD
					 providers must use Work-sheets B and B-1 which provide for allocating the costs
					 of the general service cost centers by the use of stepdown procedures.
					 Schedules B and B-1 are not applicable to providers having more than 99
					 beds.
In the preparation of this report under the COMBINATION
					 METHOD of cost apportionment, costs are allocated by the use of simplified cost
					 finding. Simplified cost finding provides for combining the costs of general
					 service cost centers having a common basis of allocation. The total costs of
					 each combined group of centers are allocated in one process. The allocation
					 bases to be used and the cost centers which are to be combined for allocation
					 are not optional but are identified and provided for. COMBINATION METHOD
					 providers must use Schedules B and B-1 which provide for allocating the costs
					 of the general service cost center by the use of the simplified cost finding
					 method. Worksheets B and B-1 are not applicable to providers having less than
					 100 beds.
Page 3. Schedule A
-Reclassification and
					 adjustment of trial balance of expenses
This schedule provides for the preparation of the trial
					 balance of expense accounts from the provider's accounting books and records.
					 It also provides for the necessary reclassifications and adjustments to
					 specific accounts. The accounts, or cost centers, are listed on this schedule
					 in a manner which facilitates the combination of the various groups of cost
					 centers for purposes of simplified cost finding under the COMBINATION METHOD.
					 This schedule is also to be completed by providers required to use the
					 DEPARTMENTAL METHOD.
Columns 1, 2 and 3
-Direct expenses per
					 books. The expenses listed in these columns should be in accordance with the
					 provider's accounting books and records. List on the appropriate lines in
					 columns 1, 2 and 3, the total expenses incurred during the reporting period.
					 The expenses must be detailed between salaries (column 1) and all other
					 expenses (column 2). The sum of columns 1 and 2 must equal column 3. Any needed
					 reclassifications and adjustments should be recorded in columns 4 and 6, as
					 appropriate.
Column 4
-Reclassifications. Enter in this
					 column any reclassifications to the total expenses in column 3 which are needed
					 to effect proper cost allocation.
Page 5
. Schedule A-2, is provided to show
					 the details of reclassification adjustments to the Administrative and General
					 Expenses per books, line 12, column 3 of Schedule A.
On Schedule A-2, lines 2 through 10, the total of the
					 employe health and welfare expenses listed are deducted from line 1, Total
					 Administrative and General Expenses. Total Employe Health and Welfare Expenses,
					 line 10, may then be reclassified on Schedule A for allocation on the basis of
					 "gross salaries." Providers may use the blank, lower section of page 5, or
					 prepare additional schedules as necessary, to reclassify any expenses which are
					 not specifically provided for.
Expenses pertaining to buildings, fixtures, and movable
					 equipment, must be allocated on the same basis as the respective depreciation
					 expense. Such expenses include insurance, rent, interest on funds borrowed to
					 purchase buildings and equipment, and property taxes. Interest on funds
					 borrowed for the payment of operating expenses must be allocated with
					 Administrative and General Expenses.
Providers using the COMBINATION METHOD are required to
					 reclassify cost between Central Services and Supply, line 15, and Cost of
					 Medical Supplies Sold, line 29; similarly, costs related to drugs charged to
					 patients which are included on line 16. Pharmacy, must be reclassified and
					 included with like costs on line 22, Cost of Drugs Charged to Patients. The
					 expenses in each cost center should be separately reclassified on the basis of
					 the total amount of "costed" or priced requisitions applicable to each cost
					 center. When costing the requisitions, a factor should be added to give effect
					 to the direct salaries and expenses of the respective cost centers.
Where the provider's routine accounting procedures include
					 inter-departmental charges for various overhead costs, and the charges are
					 based on appropriate statistics and records, reclassifications of the costs to
					 the general service cost centers listed on Schedule A are not necessary.
Column 5
-Trial balance reclassified.
					 Adjust the amounts entered in column 3 by the amounts entered in column 4,
					 increase or (decrease), and extend the net balances to column 5.
Column 6
-Adjustments to expenses. Where
					 the provider's operating costs include amounts not related to patient care,
					 specifically not reimbursable under the program, or flowing from the provision
					 of luxury items or services (that is, those items or services substantially in
					 excess of or more expensive than those generally considered necessary for the
					 provision of needed health services), such amounts will not be
					 allowable.
Schedule A-1 is provided for listing the increases and
					 (decreases) of the trial balance of expense and summarizing the total
					 adjustments in column 6 of Schedule A. The adjustments should include costs and
					 expenses for supplies and services which are not covered under the program,
					 which are specifically unallowable as being not related to patient care, that
					 are not appropriate, or that are out of line with other facilities in the same
					 area, similar in size, scope of service, utilization, and other relevant
					 factors. Such costs include, but are not limited to, costs of memberships in
					 organizations not related to patient care or the efficient operation of the
					 facility; expenses related to social activities, parties, and entertainment;
					 similar costs and expenses contrary to applicable State and Federal laws and
					 regulations.
The adjustments should include all income which is
					 deductible from operating expenses, and revenue which is a return of expense
					 rather than income. For example, income from patients for telephone and
					 television services should be used to reduce expense since the expense related
					 to these services are included in total expenses, and payment has already been
					 received in these amounts by the provider.
The descriptions set forth on the various lines of Schedule
					 A-1 indicate the more common items affecting allowable costs, or that result in
					 costs incurred for objectives other than patient care, and requiring
					 adjustments. The provider should indicate by the letter "A" when the cost has
					 been determined and forms the basis for adjustment. Where costs are not
					 determinable, the notation "B" should be made to indicate that the amount
					 received for the service is the basis for the adjustment. Other examples of
					 specific transactions for which adjustments would be indicated are:
A provider may arrange to process billings and collect the
					 proceeds on behalf of a specialist, such as a therapist, and charge a fee for
					 the services. Administrative and General Expenses, on line 12 of Schedule A,
					 must be reduced by the amount of such fees received;
Expenses incurred in fund raising activities related to the
					 solicitation of donations, contributions, and similar appeals are not
					 reimbursable under the Medical Assistance Program and must be eliminated from
					 allowable costs;
Where depreciation expense computed in accordance with the
					 principles for cost reimbursement differs from the depreciation expense per the
					 provider's books (and reported on Schedule A, lines 1 and 2) the amount of the
					 difference must be shown on the indicated lines of this Schedule A-1.
The preparer should make sure that the amounts on this
					 schedule are correctly summarized and carried forward to the proper line in
					 column 6 of Schedule A.
Column 7
-Reclassified adjusted expenses.
					 Adjust the amounts in column 5 by the amounts in column 6, increase or
					 (decrease), and extend the net balances to column 7. On line 44, Total
					 Expenses, column 7 must equal column 5 plus or minus column 6.
Providers using the COMBINATION METHOD (having less than
					 100 beds) should transfer the costs in column 7, on lines marked with an
					 asterisk (*), to Schedules B and B-1 as indicated.
Providers using the DEPARTMENTAL METHOD (having more than
					 99 beds) should transfer the individual amounts in column 7 to Worksheet B,
					 column 1, as appropriate.
Line 8-Nursing administration and service.
Providers that do not charge nursing costs directly to the
					 various patient care cost centers must allocate, on the appropriate cost
					 finding schedule (or worksheet), the total nursing administration and nursing
					 service cost. Providers that charge the cost of nursing service directly to the
					 various patient care cost centers will allocate from this line the cost of
					 nursing administration only.
Lines 33, 34 and 35.
These lines should be appropriately labeled to indicate the
					 purpose for which they are being used.
Line 44-Total expenses.
These total expenses are the sums of the amounts on lines
					 5, 6, 7, 11, 19, 20, 21, 22, 30, 31, 32, 33, 34, 35, 36, 37, 41, 42 and
					 43.
Page 6. Schedule B Cost Allocation-General Service
					 Costs.
Page 7. Schedule B-1 Cost Allocation-Statistical
					 Basis.
Schedules B and B-1 provide for cost finding under the
					 COMBINATION METHOD of cost apportionment. This method provides for allocating
					 the costs of the general service cost centers, lines 1-19 of Schedule A,
					 directly to the revenue producing and nonreimbursable cost centers on Schedule
					 B. Schedule B-1 provides for the statistics necessary to allocate the general
					 service costs to the revenue producing and nonreimbursable cost centers on
					 Schedule B.
The statistical bases and applicable cost centers in the
					 allocation of costs are identified and provided for on Schedule B-1.
The following procedures, numbered (1)-(17), will serve as
					 a guide in the process of completing these schedules:
(1) Enter on Schedule B, columns 2-7 line A,
				  and on Schedule B-1, columns 2-7, line 16, the following general service costs
				  to be allocated. These costs are obtained from page 3, Schedule A, as follows:
FROM: PAGE 3 SCHEDULE A,COLUMN 7
TO: SCH.
								B,LINE AADD SCH. B-1,LINE 26
Line
Column
5
Depreciation, Operation &
								Maint-enance of Plant, & Housekeeping ... 2
6
Employee Health and Welfare ... 3
7
Dietary and Cafeteria ... 4
11
Nursing and Intern-Resident Services ...
								5
19
Other General Service Cost Centers ...
								7
(2)
				  On Schedule B, column 1, line A, enter the total of columns 2-7, line
				  A.
(3) On Schedule B, column 1,
				  lines 1-14, enter the direct costs of the revenue producing and nonreimbursable
				  cost centers which are obtained from page 3, Schedule A, as follows:
FROM: PAGE 3SCHEDULE A,COLUMN 7
TO:
								SCHEDULE B,COLUMN 1
Line
Column
20
Radiology ... 1
21
Laboratory ... 2
22
Cost of drugs sold ... 3
30
Other ancillary service cost centers ...
								4
31
General care units ... 5
32
Newborn nursery ... 6
33
Special care unit (specify) ... 7
34
(Specify) ... 8
35
(Specify) ... 9
36
Clinic and referred ... 10
37
Emergency ... 11
41
Nonreimbursable cost centers ... 12
42
Research ... 13
43
Other (specify) ... 14
(4)
				  On Schedule B, line 15, enter the total of column 1 (line A plus lines 1-14).
				  This total must equal the amount on Schedule A, column 7, line 44.
(5) On Schedule B-1, columns 2-5, enter on
				  lines 1-14 the portion of the statistical base over which the expenses of the
				  general service cost centers are to be allocated. The statistical base to be
				  used in each column is identified in the column heading and is to reflect only
				  those statistics applicable to the revenue producing and nonreimbursable cost
				  centers. Do not include any general service cost center statistics. Enter on
				  line 15 of columns 2-5, the sum of lines 1-14.
(6) On Schedule B-1, columns 2-5, line 17,
				  determine the "Unit Cost Multiplier" by dividing the amount of "General Service
				  Costs," line 16, by the statistics on line 15.
(7) On Schedule B-1 multiply the appropriate
				  unit cost multipliers computed in step 6 by the individual cost center
				  statistics in columns 2-5. Enter the resulting amounts in the appropriate
				  columns and corresponding lines of Schedule B.
(8) On Schedule B, columns 2-5, enter on line
				  15 the sum of the amounts computed on lines 1-14. Do not include in these
				  totals, the amounts entered on line A. For each column, the amount on line 15
				  must equal the amount on line A.
(9) On Schedule B, in column 6, enter on each
				  of lines 1-14 the sum of the amounts in columns 1-5.
(10) On Schedule B, column 6, line 15, enter
				  the total of lines 1-14. This total plus the amount in column 7, line A, must
				  equal the amount in column 1, line 15.
(11) Transfer the amounts on Schedule B,
				  column 6, lines 1-15, to Schedule B-1, column 7, lines 1-15.
(12) On Schedule B-1, column 7, line 17,
				  determine the "Unit Cost Multiplier" by dividing the amount in line 16 by the
				  amount in line 15.
(13) On Schedule
				  B-1, multiply the "Unit Cost Multiplier," computed in step 12, by the
				  individual cost center amounts in column 7. Enter the resulting amounts on
				  Schedule B, column 7, lines 1-14. Upon completing the extensions, the total of
				  the amounts computed should be added to verify that the total agrees with the
				  amount in column 7, line A. Enter on line 15, column 7, the verified totals of
				  lines 1-14.
(14) On Schedule B,
				  column 8, lines 1-14, enter the sum of columns 6 and 7.
(15) On Schedule B, column 8, line 11a, enter
				  the subtotal of lines 1-11. The costs on these lines must be further
				  distributed to the various patient care departments on Schedules C and
				  C-1.
(16) On Schedule B, column 8,
				  line 15, enter the total of lines 11a-14. The amount on line 15, column 8, must
				  equal the amount in column 1, line 15.
(17) The amounts entered on Schedule B,
				  column 8, lines 1-11a, are transferred to the applicable lines on Schedule C,
				  column 2, lines 1-23.
Page 6. Worksheet B Cost Apportionment-General
					 Services.
Page 7. Worksheet B-1 Cost Apportionment-Statistical
					 Basis.
Worksheets B and B-1 provide for cost finding under the
					 DEPARTMENTAL METHOD of cost apportionment, which incorporates stepdown
					 procedures for the departmental distribution of costs on logical bases to all
					 other departments receiving the services involved.
Enter on Worksheet B, column 1, the expenses for
					 apportionment forwarded from page 3, Schedule A, each amount in column 7, on
					 lines 1 through 44. Enter on Worksheet B-1, on the first line of the column for
					 each department to be apportioned, the total of the statistical basis for
					 apportionment. The individual statistics should be entered on each appropriate
					 departmental line. The individual statistics entered should be added to verify
					 that the sum agrees with the total entered on the first line of the column.
					 Enter on line 40 of each column, the verified totals of lines 2-39. On line 41
					 of each column, enter the total costs to be apportioned, brought forward from
					 Worksheet B.
The "Unit Cost Multiplier," to be entered on line 42, is
					 determined by dividing the total statistical data, line 40, into the total
					 costs to be apportioned, line 41. This "Unit Cost Multiplier" is the factor
					 used for multiplying the statistical data recorded on the line of each
					 applicable departmental cost center.
Worksheet B provides for the distribution of departmental
					 costs by the use of the "Unit Cost Multiplier" applied to each line of
					 statistical data on Worksheet B-1. The product of each extension is entered
					 directly on Worksheet B. Upon completing the extensions for each department
					 column, the line items should be added to verify that the total apportioned
					 agrees with the total expenses of the department.
All the stepped down costs are eventually apportioned to
					 the various patient care and other cost centers. The amounts in columns 4
					 through 18, for each line (17 through 39) are totaled in the last column (19)
					 on Worksheet B. On Worksheet B, column 19, Line 35a, enter the subtotal of
					 lines 17-35. The costs on these lines must be further distributed to the
					 various patient care departments on Schedules C and C-1. On Worksheet B, column
					 19, line 40, enter the total of lines 35a-39. The amount on line 40, column 19,
					 must equal the amount in column 1, line 40. The amounts entered on Worksheet B,
					 column 19, lines 17-35a are transferred to the applicable lines on Schedule C,
					 column 1, lines 1-23.
Page 8. Schedule C Departmental Distribution of Patient
					 Care Costs.
Page 9. Schedule C-1 Departmental Distribution of Patient
					 Care Charges.
The allowable costs brought forward for distribution to the
					 various classifications of patient care are entered on Schedule C, column 1,
					 (DEPARTMENTAL METHOD) or column 2 (COMBINATION METHOD). The basis to be used
					 for the distribution is the ratio of charges to charges applied to cost.
					 Percentage ratios for apportionment are developed on Schedule C-1: The total
					 gross charges in each patient care center is related to the gross charges, in
					 that center, for charges to outpatients, hospital inpatients, and "other"
					 patient charges as specified. The ratios developed on Schedule C-1 are applied
					 on Schedule C to apportion the allowable costs in column 1 (DEPARTMENTAL
					 METHOD), or column 2 (COMBINATION METHOD), to the respective patient
					 classification: outpatients, hospital inpatients and "other" patients as
					 specified.
The following procedures, numbered (1)-(4), will serve as a
					 guide in completing Schedule C-1:
(1)
				  Enter in column 1 on the appropriate lines, above the dotted rules, the total
				  gross charges applicable to all patient services.
(2) Enter in columns 2 through 4 on the
				  appropriate lines, the portion of the total gross charges in column 1 that is
				  applicable to each patient care classification. The sum of the charges entered
				  in columns 2 through 4 must equal the total charges entered in column
				  1.
(3) Divide the charges entered
				  in each column, 2 through 4 respectively, by the total charges entered in
				  column 1. Enter the resulting percentages below the dotted rule in each of the
				  patient care classifications.
(4)
				  For each line, the total of the percentages in columns 2 through 4 must equal
				  100 percent.
The percentage ratios developed in the foregoing procedures
					 provide the base for the distribution of the costs of the revenue producing
					 cost centers to the various patient care departments or classifications.
					 Following are the procedures in the apportionment of the allowable costs
					 entered on Schedule C, column 1 (DEPARTMENTAL METHOD) or column 2 (COMBINATION
					 METHOD), to the patient classifications in column 3-Outpatient Costs, column
					 4-Hospital Inpatient Costs, and column 5-Other Inpatient Costs as
					 specified:
(1) Multiply the
				  total expenses in column 1 (or column 2) by each of the percentages developed
				  on Schedule C-1. Enter the resulting amounts in the related columns and lines
				  on Schedule C.
(2) After the total
				  patient care costs of each cost center have been distributed enter the totals
				  on lines 3, 8, 22 and 23, as appropriate. The amounts entered in columns 3, 4
				  and 5, must equal the amounts entered in column 1, or column 2, as applicable.
Column 6. Total billed hospital inpatient
					 charges
. On Schedule C, column 6, lines 1 through 23, list on each
					 line for the service centers indicated, the gross billed charges for hospital
					 inpatient services for all patients of the provider for the period, brought
					 forward from Schedule C-1, column 3, lines 1 through 23.
Column 7. Medical Assistance hospital inpatient
					 charges
. On Schedule C, column 7, list on each line for the service
					 centers indicated, the relevant gross billed charges for covered Medical
					 Assistance Program inpatient services. The amounts listed must be after the
					 exclusion of the patient resources considered in determining the amount of the
					 Medical Assistance payment for the patients' care. These charges must be
					 supported by summaries and auditable detail records, kept available for
					 examination and verification, of the eligibility of patients and approvals for
					 services and charges. Do not include any charges for inpatients' Medicare
					 deductibles or coinsurance paid by Medical Assistance.
Column 8. Average cost per diem-Inpatient routine
					 services.
GENERAL CARE UNITS, (DEPARTMENTAL METHOD). Divide the total
					 costs in column 4, line 3, by the total inpatient days from page 2, Section II,
					 column 1, line 1. Enter the resulting average cost per diem on Schedule C,
					 column 8, line 3.
SPECIAL CARE UNITS. (DEPARTMENTAL METHOD). Divide the total
					 costs in column 4, lines 4, 5, 6 and 7-separately, by the total related patient
					 days from page 2, Section II, column 1, lines 2, 3, 4 and 5-separately. Enter
					 the resulting average cost per diem (for each special care unit) on Schedule C,
					 column 8, lines 4, 5, 6, and 7, respectively. (COMBINATION METHOD) Divide the
					 total costs in column 5, line 8, by the total patient days for all special care
					 units from page 2, Section II, column 1, line 6. Enter the resulting average
					 cost per diem (for the aggregate of all special care units) on Schedule C,
					 column 8, line 8.
Column 8. Ratio of medical assistance charges-Ancillary
					 services.
(DEPARTMENTAL METHOD). The cost of ancillary services is
					 apportioned to the Medical Assistance Program on the basis of the ratio of
					 covered charges, for ancillary services provided under the Program, applied to
					 the total costs of the ancillary services. The ratio is determined by dividing
					 the covered inpatient charges in column 7 by the total inpatient charges for
					 ancillary services in column 6, on lines 9 through 21. Enter the resulting
					 percentage ratio on the applicable lines, 9 through 21, in column 8. Multiply
					 the hospital inpatient ancillary costs in column 4 by each of the ratios
					 entered in column 8. Enter the resulting amounts on the related lines, 9
					 through 21, of column 9 Schedule C. Enter on line 22, column 9, the sum of
					 lines 9 through 21. (COMBINATION METHOD) The ratio of covered Medical
					 Assistance inpatient charges for all ancillary services to total patient
					 charges for such services is applied to the total cost of all ancillary
					 services. The ratio is determined by dividing the covered inpatient charges in
					 Schedule C, column 7, line 22, by the total inpatient charges for ancillary
					 services in column 6, line 22. Enter the resulting percentage ratio in column
					 8, line 22. Multiply the hospital inpatient ancillary costs in column 4, line
					 22, by the ratio entered in column 8, line 22. Enter the resulting cost of
					 ancillary services apportioned to the Program on Schedule C, column 10, line
					 22.
Page 10. Schedule D-Balance Sheet.
Schedules of the assets, liabilities, and principal
					 accounts comprising the provider's organization are required. Items making up
					 the various special purpose or temporary funds should be included with the
					 current (general) fund. Reconcile the current surplus balance by identifying
					 the changes where indicated, or on a separate schedule if additional space is
					 required. The amount shown for "net income (loss) for period" should be the
					 same as that entered on Statement of Income and Expense, page 11, line 37;
					 explain any differences.
Page 11. Statement of Income and Expense.
This statement providing the summary of income or (loss) is
					 required for the period covered. Information for listing the operating expenses
					 in the "natural classification" may not be directly at hand from the provider's
					 records. The data can be readily assembled by scheduling the expenses, in the
					 natural classification sequence, by each cost center. The resulting summary can
					 then be transferred to the statement in the natural classification required.
					 The total of the operating expenses, line 18, should agree with the trial
					 balance of expenses on page 3, column 3, line
					 44.