Pennsylvania Code › Title 55 - HUMAN SERVICES › Part III - MEDICAL ASSISTANCE MANUAL › Chapter 1187 - NURSING FACILITY SERVICES › Subchapter E - ALLOWABLE PROGRAM COSTS AND POLICIES › Section 1187.59 - Nonallowable costs

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Nonallowable costs related to expenses and revenues.
The
				  Department will not recognize as allowable costs the expenses or revenues of a
				  nursing facility related to:
(1) Nonworking
				  officers' or owners' salaries.
(2)
				  Fundraising expenses for capital and replacement items exceeding 5% of the
				  amount raised and, for operating expenses and cash flow, fundraising expenses
				  exceeding 10% of the amount raised.
(3) Free care or discounted
				  services.
(4) Parties and social
				  activities not related to resident care.
(5) Organizational memberships not necessary
				  to resident care.
(6) Personal
				  telephone service.
(7) Personal
				  television service.
(8) The direct
				  and indirect costs related to nonallowable cost centers, including gift, flower
				  and coffee shops, homes for administrators or pastors, convent areas and
				  nurses' quarters, except as provided in §
											1187.55(3)
				  (relating to selected resident care and other resident related cost
				  policies).
(9) Vending
				  machines.
(10) Charitable
				  contributions.
(11) Employee and
				  guest meals.
(12) Pennsylvania
				  Capital Stock and Franchise Tax.
(13) Income tax.
(14) Ambulance costs.
(15) Promotional advertising, including a
				  yellow page listing larger than a minimum insert.
(16) Late payment penalties.
(17) Taxes based upon net income.
(18) Officers' and directors' life insurance,
				  including life insurance premiums necessary to obtain mortgages and other
				  loans.
(19) Bad debts or
				  contractual adjustments.
(20)
				  Collection expenses associated with bad debts.
(21) Losses on the sale of fixed and movable
				  assets.
(22) Remuneration of any
				  kind for any purpose, including travel expenses for members of the Board of
				  Directors.
(23) Dry cleaning,
				  mending or other specialty laundry services.
(24) Depreciation on fixed or movable
				  property, capital interest, amortization-capital costs and rental expense for
				  fixed property.
(25) Expenses or
				  revenues not necessary to resident care.
(26) Costs, including legal fees, accounting
				  and administrative costs, travel costs and the costs of feasibility studies,
				  attributable to the negotiation or settlement of the sale or purchase of a
				  capital asset-by acquisition or merger-for which payment has previously been
				  made under Title XVIII of the Social Security Act (42 U.S.C.A. §§
												1395-1395yy) if the sale or purchase
				  was made on or after July 18, 1984.
(27) Letter of credit costs.
(28) Legal expenses related to an appeal or
				  action challenging a payment determination under this chapter until a final
				  adjudication is issued sustaining the nursing facility's appeal. If the nursing
				  facility prevails on some but not all issues raised in the appeal or action, a
				  percentage of the reasonable legal expenses is allowable based upon the
				  proportion of additional reimbursement received to the total additional
				  reimbursement sought on appeal.
(29) Nonstandard or nonuniform fringe
				  benefits.
(30) Return on net equity
				  and net worth.