Washington Administrative Code › Title 388 - Social and Health Services, Department of › DEVELOPMENTAL DISABILITIES SERVICES › Chapter 388-835 - ICF/ID program and reimbursement system › ALLOWABLE AND UNALLOWABLE COSTS › Section 388-835-0405 - What are unallowable costs?

Current through Register Vol. 24-14, July 15, 2024
(1)
				  Costs are unallowable if they are not documented, necessary, or ordinary and do
				  not relate to providing services to ICF/ID residents.
(2) Examples of unallowable costs include,
				  but are not limited to, the following:
(a)
				  Costs of items or services not covered by the medic-aid program. Costs of
				  nonprogram items or services will not be allowed even if indirectly reimbursed
				  by DSHS as a result of an authorized reduction in resident
				  contribution.
(b) Costs of services
				  and items provided to ICF/ID residents covered by DSHS's medical care program
				  but not included in ICF/ID services.
(c) Costs associated with a capital
				  expenditure subject to Section 1122 approval (part 100,
				  Title
				  42 C.F.R.) if DSHS found the
				  expenditure was not consistent with applicable standards, criteria, or plans.
				  If DSHS was not given timely notice of a proposed capital expenditure, all
				  associated costs will not be allowed as of the date the costs were determined
				  to be nonreimbursable under applicable federal regulations.
(d) Costs associated with a construction or
				  acquisition project that requires certificate of need approval according to
				  chapter 70.38 RCW and that approval was not obtained.
(e) Costs associated with outside activities
				  (e.g., costs allocable to the use of a vehicle for personal purposes, or
				  related to the part of a facility leased out for office space).
(f) All salaries or other compensation of
				  officers, directors, stockholders, and others associated with the provider or
				  home office, except compensation paid for services related to resident care and
				  training.
(g) Costs in excess of
				  limits set in this chapter or costs violating principles contained in this
				  chapter.
(h) Costs resulting from
				  transactions or the application of accounting methods used to circumvent the
				  principles of the prospective cost-related reimbursement system.
(i) Costs applicable to services, facilities,
				  and supplies furnished by a related organization in excess of the lower of cost
				  to the related organization or market meaning the price paid for comparable
				  services, facilities or supplies when purchased in an arms length
				  transaction.
(j) Balances of
				  accounts that cannot be collected (bad debts or uncollectable
				  accounts).
(k) Charity and courtesy
				  allowances.
(l) Cash, assessments,
				  or other contributions to political parties, and cost incurred to improve
				  community or public relations. Dues to charitable organizations, professional
				  organizations and trade associations are allowable costs.
(m) Any portion of trade association dues for
				  legal and consultant fees and costs related to lawsuits or other legal action
				  against DSHS.
(n) Travel expenses
				  for trade association boards of directors in excess of the twelve allowable
				  meetings per calendar year.
(o)
				  Vending machine expenses.
(p)
				  Expenses for barber or beautician services not included in routine
				  care.
(q) Funeral and burial
				  expenses.
(r) Costs of gift shop
				  operations and inventory.
(s)
				  Personal items such as cosmetics, smoking materials, newspapers and magazines,
				  and clothing, except items used in resident activity programs or in ICF/ID
				  programs where clothing is a part of routine care.
(t) Fund-raising expenses except those
				  directly related to the resident activity program.
(u) Penalties and fines.
(v) Expenses related to telephones,
				  televisions, radios, and similar appliances in a resident's private
				  accommodations.
(w) Federal, state,
				  and other income taxes.
(x) Costs
				  of special care services, except where authorized by DSHS.
(y) Expenses for "key-person" insurance and
				  other insurance or retirement plans not available to all employees.
(z) Expenses of profit-sharing
				  plans.
(aa) Expenses related to the
				  purchase and/or use of private or commercial aircraft that exceed what a
				  prudent provider would spend for ordinary and economical transportation when
				  conducting resident care business.
(bb) Personal expenses and allowances of
				  owners or relatives.
(cc) All
				  expenses of maintaining professional licenses or membership in professional
				  organizations.
(dd) Costs related
				  to agreements not to compete.
(ee)
				  Goodwill and the amortization of goodwill.
(ff) Expenses related to vehicles in excess
				  of what a prudent provider would expend for the ordinary and economic provision
				  of transportation needs related to resident care.
(gg) Legal and consultant fees related to a
				  fair hearing against DSHS. Including but not limited to, fees for accounting
				  services used to prepare for an administrative judicial review resulting in a
				  final administrative decision favorable to DSHS or where DSHS's decision is
				  allowed to stand.
(hh) Legal and
				  consultant fees related to a lawsuit against DSHS, including suits appealing
				  administrative decisions.
(ii)
				  Lease acquisition costs and other intangibles not related to resident care and
				  training.
(jj) Interest charges
				  assessed by the state of Washington for failure to make timely refund of
				  overpayments and interest expenses incurred for loans obtained to make such
				  refunds.
(kk) Travel expenses
				  outside the states of Idaho, Oregon, and Washington and the Province of British
				  Columbia except travel to and from the home and central office of a chain
				  organization operation outside those areas if the travel is necessary,
				  ordinary, and related to resident care and training.
(ll) Moving expenses of employees when a
				  demonstrated, good-faith effort has not been made to recruit employees within
				  the states of Idaho, Oregon, and Washington and Province of British
				  Columbia.