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 411-070-0330 - Owner Compensation

Current through Register Vol. 63, No. 7, July 1, 2024
(1)
			 Reasonable compensation for services performed by owners (whether sole
			 proprietors, partners, or stockholders) is an allowable cost, provided the
			 services are actually performed, documented, and are necessary, and the
			 provisions of this rule are met.
(2) The allowance of compensation for
			 services of sole proprietors and partners is the amount determined by the
			 Department to be the reasonable value of the services rendered as long as
			 compensation was paid in conformance with this rule.
(3) Compensation for services performed by
			 owners may be included in allowable provider cost only to the extent that it
			 represents reasonable remuneration for managerial, administrative,
			 professional, and other services related to the operation of the facility and
			 rendered in connection with resident care. Services rendered in connection with
			 resident care include both direct and indirect activities in the provision and
			 supervision of resident care, such as administration, management, and overall
			 supervision of the institution. Services which are not related to either direct
			 or indirect resident care; e.g., those primarily for the purpose of managing or
			 improving the owner's financial investment are not recognized as an allowable
			 cost. Costs related to the owner's management and overall supervision of the
			 facility will be reported in Account 436.
(4) Payments to an owner that represent a
			 return on equity capital are not allowable costs for reimbursement purposes.
			 Such payments are not considered as compensation for purposes of determining
			 the reasonable level of reimbursement of the owner.
(5) The compensation allowance will be an
			 amount as would ordinarily be paid for comparable services in other nursing
			 facilities, as defined by section (6) of this rule. This determination will be
			 made by the Department depending upon the facts and circumstances of each
			 case.
(6) For purposes of
			 determining whether the compensation paid to or claimed by an owner is
			 reasonable, the total of all benefits and remuneration such as travel allowance
			 or key-man insurance, regardless of the form, will be considered. The
			 Department has established the 75th percentile ranking of average compensation
			 paid, in all facilities by job category, as being reasonable.
(7) Accrued compensation of an owner, if not
			 paid within 75 days after the end of the Nursing Facility Financial Statement
			 reporting period, may not be included as an allowable expense.
(8) An owner must not be compensated for
			 services in excess of 40 hours in one week. This rule applies even if an owner
			 may provide services in more than one area.
(9) The requirement that the function be
			 necessary means that had the owner not rendered the services, the institution
			 would have had to employ another person to perform them. The services must be
			 pertinent to the operation and sound conduct of the institution.
(10) Compensation paid to an employee who is
			 an immediate relative of the owner of the facility is also reviewable under the
			 test of reasonableness. For this purpose, the following persons are considered
			 "immediate relatives": Husband and wife; natural parent, child and sibling;
			 adopted child and adoptive parent; stepparent, stepchild, stepbrother and
			 stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law,
			 brother-in-law, and sister-in-law; and grandparent and grandchild, uncle, aunt,
			 nephew, niece, and cousin.
(11)
			 Where an owner provides services for more than one facility or is engaged in
			 other occupations or business activities, allowable compensation may be
			 adjusted to reflect an appropriate allocation of time spent in each area based
			 on the combined total of resident days.
(12) Where an owner functions as an
			 administrator or assistant administrator, the rules governing compensation of
			 these positions apply, in addition to the requirements of this rule.
Stat. Auth.: ORS
				  414.065 &
				  410
Stats. Implemented: ORS
				  410.070