Oregon Administrative Rules › Chapter 411 - DEPARTMENT OF HUMAN SERVICES, AGING AND PEOPLE WITH DISABILITIES AND DEVELOPMENTAL DISABILITIES › Division 70 - NURSING FACILITIES/MEDICAID GENERALLY AND REIMBURSEMENT › Section 411-070-0359 - Allowable Costs

Current through Register Vol. 63, No. 7, July 1, 2024
(1) ALLOWABLE
			 COSTS. Allowable costs are the necessary costs incurred for the customary and
			 normal operation of a facility, to the extent that they are reasonable and
			 related to resident services.
(a) Accounting,
			 Auditing, and Data Processing -- The costs of recording, summarizing, and
			 reporting the results of operations are allowable.
(b) Advertising -- Help wanted advertising
			 and the expense related to the alphabetical listing in the yellow pages of a
			 phone directory are allowable.
(c)
			 Allowable Workers Compensation Dividends (Refunds) or Billings of the nursing
			 facility are those dated in the fiscal reporting period.
(d) Auto and Travel Expense -- Expense of
			 maintenance and operation of a vehicle and travel expense related to resident
			 services are reimbursable. The allowance for mileage reimbursement must not
			 exceed the amount determined reasonable by the Internal Revenue Service for the
			 period reported. Allowable out-of-state travel is restricted to Washington,
			 Idaho, and Northern California, no farther south than San Francisco. One out of
			 state/contiguous area trip per year for two employees shall be allowed, as long
			 as it relates to resident services.
(e) Bad Debts -- Bad debts related to Title
			 XIX recipients are allowable.
(f)
			 Bank and Finance Charges -- Charges for routine maintenance of accounts are
			 allowable.
(g) Communications --
			 Charges for routine telephone service, including pagers, and cable television
			 fees, are allowable.
(h)
			 Compensation of Owners -- Owner's compensation in accordance with OAR
			 411-070-0330 is
			 allowable.
(i) Consultant Fees --
			 Consultant fees are allowable provided they meet the criteria as outlined in
			 OAR 411-070-0320.
(j) COVID-19 -- Costs of COVID-19 related
			 expenses not reimbursed by the State of Oregon or the federal government are
			 allowable. The Emergency Health Care Center (EHCC) revenue is
			 non-allowable.
(k) Criminal Records
			 Checks -- Costs of criminal records checks of facility employees if mandated by
			 federal or state law are allowable.
(l) Depreciation and Amortization --
			 Depreciation schedules on buildings and equipment must be maintained.
			 Depreciation expense is not allowable for land. Lease-hold improvements may be
			 amortized. Depreciation and amortization must be calculated on a straight-line
			 basis and prorated over the estimated useful life of the asset. Effective July
			 1, 2003, these costs must be reported in accordance with OAR
			 411-070-0365, OAR
			 411-070-0375, and OAR
			 411-070-0385.
(m) Education and Training -- Registration,
			 tuition, and book expense associated with education and training of personnel
			 is allowed provided it is related to resident services. The costs associated
			 with training and certifying nurse aides are not allowable for inclusion in the
			 annual NFFS. These costs are reimbursed separately by SPD per OAR
			 411-070-0470.
(n) Employee Benefits -- Employee benefits
			 that are made available to all employees, are for the primary use of the
			 employees, are generally considered by the industry as reasonable and important
			 benefits to provide for employees, are not taxable as wages, and are allowable
			 to the extent of employer participation.
(o) Food -- Food products and supplements
			 used in food preparation are allowable.
(p) Home Office Costs -- Home office costs
			 are allowable in accordance with OAR
			 411-070-0345.
(q) Insurance -- Premiums for insurance on
			 assets or for liability purposes, including vehicles, are allowable to the
			 extent that they are related to resident services. Self-insurance costs are
			 allowable only when expense is actually incurred.
(r) Interest -- Interest on debt related to
			 the provision of resident services is an allowable expense, except on or after
			 July 1, 1984, interest expense related to that portion of the acquisition price
			 of a long-term facility that exceeds the depreciable basis (OAR
			 411-070-0375) will not be
			 reimbursable.
(s) Legal Fees --
			 Legal fees directly related to resident services are allowable. Legal fees
			 related to non-allowable costs are not allowable. Legal fees claimed as related
			 to resident services must be explained and listed on Schedule A. Fees related
			 to legal and administrative actions to resolve a disagreement with the state
			 shall be allowable if the action is resolved in the provider's favor, and the
			 judge or hearings officer does not order the state to pay the provider's legal
			 fees.
(t) Licenses, Dues, and
			 Subscriptions -- Fees for facility licenses, dues in professional associations,
			 and costs of subscriptions for newspapers, magazines, and periodicals provided
			 for resident and staff professional use are allowable.
(u) Linen and Bedding -- Linen and bedding
			 costs for the facility are allowable.
(v) Management Fees -- Management fees are
			 allowable provided they meet the criteria for OAR
			 411-070-0350.
(w) Postage and Freight -- Postage expense is
			 considered an office supply cost. Freight must be posted to the same account as
			 the item purchased.
(x) Property
			 Costs -- Costs related to purchase or lease of a facility are to be reported in
			 Accounts 452 through 459 and 461.
(y) Purchased Services -- Services that are
			 received under contract arrangements are reimbursable to the extent that they
			 are related to resident services and the sound conduct and operation of the
			 facility.
(z) Rent or Lease
			 Payments -- Payments for the lease or rental of land, buildings, and equipment
			 are to be reported. Payments for lease agreements entered into with a related
			 party are limited to the lower of actual costs or the lease payments.
(aa) Repairs and Maintenance -- Costs of
			 maintenance and minor repairs are allowable when related to the provision of
			 resident services.
(bb) Salaries
			 (Except Owners and Related Parties) -- Salaries and wages of all employees
			 engaged in resident service activities or overall operation and maintenance of
			 the facility, including support activities of home offices and regional
			 offices, are allowable.
(cc)
			 Supplies -- Cost of supplies used in resident services or providing services
			 related to resident services are allowable.
(dd) Taxes -- Property taxes on assets used
			 in rendering resident services are allowable. Long term facility taxes paid on
			 resident days are allowable, effective July 1, 2003.
(ee) Utilities -- Costs for facility heating,
			 lighting, water-sewer, and garbage provisions are allowable.
(ff) Utilization Review -- Costs incurred for
			 utilization review are Medicare related and are not allowable for Medicaid
			 reimbursement.