Washington Administrative Code › Title 388 - Social and Health Services, Department of › DEVELOPMENTAL DISABILITIES SERVICES › Chapter 388-835 - ICF/ID program and reimbursement system › DEFINITIONS › Section 388-835-0010 - What terms and definitions are important to understanding this chapter?

Current through Register Vol. 24-14, July 15, 2024
Unless the context clearly requires otherwise, the
					 following terms and definitions are used consistently throughout the
					 chapter:
"Accrual method of accounting"
is a method of
					 accounting where:
(1) Revenues are
				  reported when they are earned, regardless of when they are collected;
				  and
(2) Expenses are reported when
				  they are incurred, regardless of when they are paid.
"Active treatment,"
as used in this chapter,
					 is defined in 42 C.F.R.
					 483.440(a) and includes
					 implementation of an individual program plan for each resident as outlined in
					 42 C.F.R.
					 483.440(c) through
					 (f).
"Administration and management"
means
					 activities used to maintain, control, and evaluate an organization's use of
					 resources while pursuing its goals, objectives and policies.
"Admission"
means entering a state-certified
					 facility and being authorized to receive services from it.
"Allowable costs"
are documented costs
					 that:
(1) Are necessary, ordinary, and
				  related to providing ICF/ID services to ICF/ID residents; and
(2) Not expressly declared
"nonallowable"
by applicable statutes or regulations.
"Appraisal"
is a process performed by a
					 professional person either designated by the American Institute of Real Estate
					 Appraisers as a member, appraisal institute (MAI), or by the Society of Real
					 Estate Appraisers as a senior real estate analyst (SREA) or a senior real
					 property appraiser (SRPA). The appraisal process is used to establish the fair
					 market value of an asset or to reconstruct the historical cost of an asset that
					 was acquired in a past period. The appraisal process includes recording and
					 analyzing property facts, rights, investments and values based on a personal
					 inspection and a property inventory.
"Arm's-length transaction"
is a transaction
					 resulting from good faith bargaining between a buyer and seller who hold
					 adverse positions in the market place. Arm's-length transactions are presumed
					 to be objective transactions. A sale or exchange of ICF/ID or nursing home
					 facilities among two or more parties where all parties continue to own one or
					 more of the facilities involved in the transaction is not considered an
					 arm's-length transactions. The sale of an ICF/ ID facility that is subsequently
					 leased back to the seller within five years of the date of sale is not
					 considered an arm's-length transaction for purposes of chapter 388-835
					 WAC.
"Assets"
are economic resources of the
					 provider, recognized, and measured in conformity with generally accepted
					 accounting principles. Assets also include deferred charges that are recognized
					 and measured according to generally accepted accounting principles. (The value
					 of assets acquired in a change of ownership transaction entered into after
					 September 30, 1984, cannot exceed the acquisition cost of the owner of record
					 as of July 18, 1984.)
"Bad debts"
or
"uncollectable
					 accounts"
are amounts considered uncollectable from accounts and notes
					 receivable. Generally accepted accounting principles must be followed when
					 accounting for bad debts.
"Beds,"
unless otherwise specified, means the
					 number of set-up beds in an ICF/ID facility. The number of set-up beds cannot
					 exceed the number of licensed beds for the facility.
"Beneficial owner":
For a definition, see WAC
					 388-835-0015.
"Assisted living facility"
means any home or
					 other institution licensed according to the requirements of chapter 18.20
					 RCW.
"Capitalization"
means recording expenditures
					 as assets.
"Capitalized lease"
is a lease that is
					 recorded, according to generally accepted accounting principles, as an asset
					 with an associated liability.
"Cash method of accounting"
is a method of
					 accounting where revenues are recorded only when cash is received and expenses
					 are not recorded until cash is paid.
"Change of ownership,"
see WAC
					 388-835-0020.
"Charity allowances"
are reductions in a
					 provider's charges because of the indigence or medical indigence of a
					 resident.
"Consent"
means the process of obtaining a
					 person's permission before initiating procedures or actions against that
					 person.
"Contract"
means a contract between the
					 department and a provider for the delivery of ICF/ID services to eligible
					 medicaid recipients.
"Courtesy allowances"
are reductions in
					 charges to physicians, clergy, and others for services received from a
					 provider. Employee fringe benefits are not considered courtesy
					 allowances.
"Custody"
means the immediate physical
					 confinement, sheltering and supervision of a person in order to provide them
					 with care and protect their welfare.
"DDA"
means the developmental disabilities
					 administration of the department.
"Department"
means the department of social
					 and health services (DSHS) and its employees.
"Depreciation"
is the systematic distribution
					 of the cost (or depreciable base) of a tangible asset over its estimated useful
					 life.
"Discharge"
means the process that takes place
					 when:
(1) A resident leaves a
				  residential facility; and
(2) The
				  facility relinquishes any responsibility it acquired when the resident was
				  admitted.
"Donated asset"
is an asset given to a
					 provider without any payment in cash, property, or services. An asset is not
					 considered donated if the provider makes a nominal payment when acquiring it.
					 An asset purchased using donated funds is not a donated asset.
"Entity"
means an individual, partnership,
					 corporation, public institution established by law, or any other association of
					 individuals, capable of entering into enforceable contracts.
"Equity capital"
is the total tangible and
					 other assets that are necessary, ordinary, and related to resident care listed
					 on a provider's most recent cost report minus the total related long-term debt
					 from the same cost report plus working capital as defined in this
					 section.
"Exemption"
means a department approved
					 written request asking for an exception to a rule in this chapter.
"Facility"
means a residential setting
					 certified, according to federal regulations, as an ICF/ID by the department. A
					 state facility is a state-owned and operated residential living center. A
					 private facility is a residential setting licensed as a nursing home under
					 chapter
					 18.51 RCW or a boarding
					 home licensed under chapter 18.20 RCW.
"Fair market value"
is the purchase price of
					 an asset resulting from an arm's-length transaction between a well-informed
					 buyer and seller, neither being under any compulsion to buy or sell.
"Financial statements"
are statements prepared
					 and presented according to generally accepted accounting principles and
					 practice and the requirements of this chapter. Financial statements and their
					 related notes include, but are not limited to, balance sheet, statement of
					 operations, and statement of change in financial position.
"Fiscal year"
is the operating or business
					 year of a provider. Providers report on the basis of a twelve-month fiscal
					 year, but this chapter allows reports covering abbreviated fiscal
					 periods.
"Funded capacity,"
for a state facility, is
					 the number of beds on file with the office of financial management.
"Generally accepted accounting principles"
are
					 the accounting principles currently approved by the financial accounting
					 standard board (FASB).
"Generally accepted auditing standards"
are
					 the auditing standards currently approved by the American Institute of
					 Certified Public Accountants (AICPA).
"Goodwill"
is the excess of the purchase price
					 of a business over the fair market value of all identifiable, tangible, and
					 intangible assets acquired.
"Goodwill"
also means the excess of
					 the price paid for an asset over fair market value.
"Habilitative services"
means those services
					 required by an individual habilitation plan.
"Harmful"
is when an individual is at
					 immediate risk of serious bodily harm.
"Historical cost"
is the actual cost incurred
					 in acquiring and preparing an asset for use, including feasibility studies,
					 architects' fees, and engineering studies.
"Imprest fund"
is a fund:
(1) Regularly replenished for the amounts
				  expended from it; and
(2) The cash
				  in the fund and the receipts for expenditures should always equal a
				  predetermined amount.
(3) An
				  example of an imprest fund is a petty cash fund.
"ICF/ID"
means a facility certified by Title
					 XIX as an intermediate care facility for providing services to persons with
					 mental retardation or related conditions.
"Interest"
is the cost incurred for the use of
					 borrowed funds, generally paid at fixed intervals by the borrower.
"Joint facility costs"
are any expenses
					 incurred that benefit more than one facility or a facility and any other
					 entity.
"Lease agreement"
is a contract for a
					 specified period of time between two parties regarding the possession and use
					 of real or personal property and/or assets in exchange for specified periodic
					 payments.
"Medicaid program"
means either the state
					 medical assistance program provided under
					 RCW
					 74.09.500 or authorized state medical
					 services.
"Medical assistance recipient"
is an
					 individual that the department declares eligible for medical assistance
					 services provided in chapter 74.09 RCW.
"Modified accrual method of accounting"
is a
					 method of accounting that records revenues only when cash is received and
					 records expenses when they are incurred, regardless of when they are
					 paid.
"Net book value"
is the historical cost of an
					 asset less its accumulated depreciation.
"Nonallowable costs"
are costs that are not
					 documented, necessary, ordinary and related to providing services to
					 residents.
"Nonrestricted funds"
are donated funds not
					 restricted to a specific use by the donor. General operating funds are an
					 example of nonrestricted funds.
"Nursing facility"
means a home, place, or
					 institution, licensed or certified according to
					 chapter
					 18.51 RCW.
"Operating lease"
is a lease, according to
					 generally accepted accounting principles, that requires rental or lease
					 payments to be charged to current expenses when they are incurred.
"Ordinary costs"
are costs that, by their
					 nature and magnitude, a prudent and cost conscious management would pay.
"Owner"
means a sole proprietor, general or
					 limited partner, or beneficial interest holder of at least five percent of a
					 corporation's outstanding stock.
"Ownership interest"
means all beneficial
					 interests owned by a person (calculated in the aggregate) regardless of the
					 form such beneficial ownership takes. Also, see WAC
					 388-835-0015.
"Per diem costs"
or
"per resident day
					 costs"
are total allowable costs for a fiscal period divided by total
					 resident days for that same period.
"Prospective daily payment rate"
is the daily
					 amount the department assigns to each provider for providing services to ICF/ID
					 residents. The rate is used to compute the department's maximum participation
					 in the provider's cost.
"Provider"
means an entity contracting with
					 the department to deliver ICF/ID services to eligible medicaid
					 recipients.
"Qualified intellectual disability professional
					 (QIDP)"
means QIDP as defined under
					 42 C.F.R.
					 483.430(a).
"Qualified therapist,"
see WAC
					 388-835-0030.
"Regression analysis"
is a statistical
					 technique used to analyze the relationship between a dependent or criterion
					 variable and a set of independent or predictor variables.
"Regional services"
are the services of a
					 local office of the developmental disabilities administration.
"Related organization"
is an entity that
					 either controls another entity or is controlled by another entity or provider.
					 Control results from common ownership or the ability to exercise significant
					 influence on the other entity's activities. Control occurs when an entity or
					 provider has:
(1) At least a five
				  percent ownership interest in the other entity; or
(2) The ability to influence the activities
				  of the other.
"Relative"
means spouse; natural parent,
					 child, or sibling; adopted child or adoptive parent; stepparent, stepchild,
					 stepbrother, stepsister; father-in-law, mother-in-law, son-in-law,
					 daughter-in-law, brother-in-law, sister-in-law; grandparent or grandchild;
					 uncle, aunt, nephew, niece, or cousin.
"Resident"
or
"person"
means a
					 person the administration determines is, under
					 RCW
					 71A.16.040 eligible for administration-funded
					 services.
"Resident day"
means a calendar day of
					 resident care. When computing calendar days of resident care, the day of
					 admission is always counted. The day of discharge is counted only when
					 discharge and admission occur on the same day. For the purpose of this
					 definition, a person is considered admitted when they are assigned a bed and a
					 resident record is opened for them.
"Resident care and training staff"
are staff
					 whose primary responsibility is the care and development of the residents,
					 including:
(1) Resident activity
				  program;
(2) Domiciliary services;
				  and
(3) Habilitative services under
				  the supervision of a QIDP.
"Restricted fund"
is a fund where the donor
					 restricts the use of the fund principal or income to a specific purpose.
					 Restricted funds generally fall into one of three categories:
(1) Funds restricted to specific operating
				  purposes; or
(2) Funds restricted
				  to additions of property, plant, and equipment; or
(3) Endowment funds.
"RHC" -
Residential habilitation center. A
					 facility owned and operated by the state and is certified as an ICF/ ID or a
					 nursing facility.
"Secretary"
means the secretary of
					 DSHS.
"Start-up costs"
are the one-time costs
					 incurred from the time preparations begin on a newly constructed or purchased
					 building until the first resident is admitted. Such
"preopening"
costs include, but are not limited to, administrative and nursing salaries,
					 utility costs, taxes, insurance, repairs and maintenance, and training costs.
					 Start-up costs do not include expenditures for capital assets.
"Superintendent"
means the superintendent of a
					 residential habilitation center (RHC) or the superintendent's des-ignee.
"Title XIX"
means the 1965 amendments to the
					 Social Security Act, P.L. 89-07, as amended.
"Uniform chart of accounts"
means a list of
					 department established account titles and related code numbers that providers
					 must use when reporting costs.
"Vendor number"
or
"provider
					 number"
is a number assigned by the department to each provider who
					 delivers ICF/ID services to ICF/ID medicaid recipients.
"Working capital"
is the difference between
					 the total current assets that are necessary, ordinary, and related to resident
					 care, as reported in a provider's most recent cost report, and the total
					 current liabilities necessary, ordinary, and related to resident care reported
					 in the same cost report.
Statutory Authority:
						RCW
						71A.20.140. 01-10-013, § 388-835-0010,
						filed 4/20/01, effective 5/21/01.