Washington Administrative Code › Title 388 - Social and Health Services, Department of › AGING AND ADULT SERVICES › Chapter 388-96 - Wage equity funding › Section 388-96-010 - Definitions

Current through Register Vol. 24-14, July 15, 2024
Unless the context indicates otherwise, the following
				  definitions apply in this chapter.
"Accounting"
means activities providing
				  information, usually quantitative and often expressed in monetary units,
				  for:
(1) Decision making;
(2) Planning;
(3) Evaluating performance;
(4) Controlling resources and operations; and
(5) External financial reporting to investors, creditors,
				  regulatory authorities, and the public.
"Accrual method of accounting"
is a method of
				  accounting in which revenues are reported in the period when they are earned,
				  regardless of when they are collected, and expenses are reported in the period
				  in which they are incurred, regardless of when they are paid.
"Administration and management"
means activities
				  used to maintain, control, and evaluate the efforts and resources of an
				  organization for the accomplishment of the objectives and policies of that
				  organization.
"Allowable costs"
are documented costs that are
				  necessary, ordinary, reasonable, and related to the care of medicaid
				  recipients, and are not expressly declared nonallowable by this chapter or
				  chapter 74.46 RCW. Costs are ordinary if they are of the nature and magnitude
				  that prudent and cost conscious management would pay.
"Assignment of contract"
means:
(1) A new nursing facility licensee has elected to care for
				  medicaid residents;
(2) The department finds no good cause to object to
				  continuing the medicaid contract at the facility; and
(3) The new licensee accepts assignment of the immediately
				  preceding contractor's contract at the facility.
"Bad debts"
are amounts considered to be
				  uncollectible from accounts and notes receivable.
"Banked beds"
are beds removed from service
				  under chapter 246-310 WAC.
"Beneficial owner"
is any one or more of the
				  following:
(1) Any person who, directly or indirectly, through any
				  contract, arrangement, understanding, relationship, or otherwise has or shares
				  one or more of the following:
(a) Voting power which includes the power to vote, or to
				  direct the voting of such ownership interest; or
(b) Investment power which includes the power to dispose, or
				  to direct the disposition of such ownership interest.
(2) Any person who, directly or indirectly, creates or uses a
				  trust, proxy, power of attorney, pooling arrangement, or any other contract,
				  arrangement, or device with the effect of divesting himself or herself of
				  beneficial ownership of an ownership interest or preventing the vesting of such
				  beneficial ownership as part of a plan or scheme to evade the reporting
				  requirements of this chapter;
(3) Any person who, subject to (b) of this subsection, has
				  the right to acquire beneficial ownership of such ownership interest within
				  sixty days, including but not limited to any right to acquire:
(a) Through the exercise of any option, warrant, or
				  right;
(b) Through the conversation of an ownership interest;
(c) Pursuant to the power to revoke a trust, discretionary
				  account, or similar arrangement; or
(d) Pursuant to the automatic termination of a trust,
				  discretionary account, or similar arrangement; except that, any person who
				  acquires an ownership interest or power specified in (a), (b), or (c) of this
				  subsection with the purpose or effect of changing or influencing the control of
				  the contractor, or in connection with or as a participant in any transaction
				  having such purpose or effect, immediately upon such acquisition shall be
				  deemed to be the beneficial owner of the ownership interest which may be
				  acquired through the exercise or conversion of such ownership interest or
				  power;
(4) Any person who in the ordinary course of business is a
				  pledgee of ownership interest under a written pledge agreement shall not be
				  deemed to be the beneficial owner of such pledged ownership interest until the
				  pledgee has taken all formal steps necessary which are required to declare a
				  default and determines that the power to vote or to direct the vote or to
				  dispose or to direct the disposition of such pledged ownership interest will be
				  exercised; except that:
(a) The pledgee agreement is bona fide and was not entered
				  into with the purpose nor with the effect of changing or influencing the
				  control of the contractor, nor in connection with any transaction having such
				  purpose or effect, including persons meeting the conditions set forth in (b) of
				  this subsection; and
(b) The pledgee agreement, prior to default, does not grant
				  to the pledgee:
(i) The power to vote or to direct the vote of the pledged
				  ownership interest; or
(ii) The power to dispose or direct the disposition of the
				  pledged ownership interest, other than the grant of such power(s) pursuant to a
				  pledge agreement under which credit is extended and in which the pledgee is a
				  broker or dealer.
"Building"
means the basic structure, shell,
				  structures, or shells of a facility and additions thereto. All allowable
				  sections of a building are enclosed on all sides with a roof and are
				  permanent.
"Building improvements"
are betterments and
				  additions made by a building owner to the building.
"Capital"
means the component of the rate that
				  uses a fair market rental system to set a price per bed.
"Capitalized lease"
means a lease required to be
				  recorded as an asset and associated liability in accordance with generally
				  accepted accounting principles.
"Cash method of accounting"
means a method of
				  accounting in which revenues are recorded when cash is received, and
				  expenditures for expense and asset items are not recorded until cash is
				  disbursed for those expenditures and assets.
"Change of ownership"
means a substitution,
				  elimination, or withdrawal of the individual operator or operating entity
				  contracting with the department to deliver care services to medical care
				  recipients in a nursing facility and ultimately responsible for the daily
				  operational decisions of the nursing facility.
(1) Events which constitute a change of ownership include,
				  but are not limited to, the following:
(a) Changing the form of legal organization of the
				  contractor, such as a sole proprietor forms a partnership or
				  corporation;
(b) Transferring ownership of the nursing facility business
				  enterprise to another party, regardless of whether ownership of some or all of
				  the real property or personal property assets of the facility are also
				  transferred;
(c) Dissolving of a partnership;
(d) Dissolving the corporation, merging the corporation with
				  another corporation, which is the survivor, or consolidating with one or more
				  other corporations to form a new corporation;
(e) Transferring, whether by a single transaction or multiple
				  transactions within any continuous twenty-four-month period, fifty percent or
				  more of the stock to one or more:
(i) New or former stockholders; or
(ii) Present stockholders each having held less than five
				  percent of the stock before the initial transaction;
(f) Substituting of the individual operator or the operating
				  entity by any other event or combination of events that results in a
				  substitution or substitution of control of the individual operator or the
				  operating entity contracting with the department to deliver care services;
				  or
(g) A nursing facility ceases to operate.
(2) Ownership does not change when the following, without
				  more, occurs:
(a) A party contracts with the contractor to manage the
				  nursing facility enterprise as the contractor's agent, i.e., subject to the
				  contractor's general approval of daily operating and management decisions;
				  or
(b) The real property or personal property assets of the
				  nursing facility change ownership or are leased, or a lease of them is
				  terminated, without a substitution of individual operator or operating entity
				  and without a substitution of control of the operating entity contracting with
				  the department to deliver care services.
"Charity allowance"
means a reduction in charges
				  made by the contractor because of the indigence or medical indigence of a
				  patient.
"Component rate allocation"
means the initial
				  component rate allocation of the rebased rate for a rebase period effective
				  July 1st. If a month and a day, other than July 1st with a year precedes
				  "component rate allocation," it means the initial component rate allocation of
				  the rebased rate of the rebase period has been amended or updated effective the
				  date that precedes it, e.g., October 1, 1999 direct care component rate
				  allocation.
"Contract"
means an agreement between the
				  department and a contractor for the delivery of nursing facility services to
				  medical care recipients.
"Cost report"
means all schedules of a nursing
				  facility's cost report submitted according to the department's
				  instructions.
"Courtesy allowances"
are reductions in charges
				  in the form of an allowance to physicians, clergy, and others, for services
				  received from the contractor. Employee fringe benefits are not considered
				  courtesy allowances.
"Department"
means department of social and
				  health services and its employees.
"Direct care supplies
or "DCS"
means:
(1) Those supplies:
(a) Used by staff providing direct care to residents;
(b) Consumed during a single accounting period; and
(c) Expensed in that accounting period.
(2) Supplies excluded from DCS include but are not limited to
				  the following:
(a) Medical equipment (such as IV poles) ;
(b) Items covered by medicaid fee-for-service system;
				  and
(c) Administrative supplies used by direct care staff (such
				  as pencils, pens, paper, and office supplies.
"Donated asset"
means an asset the contractor
				  acquired without making any payment for the asset either in cash, property, or
				  services. An asset is not a donated asset if the contractor:
(1) Made even a nominal payment in acquiring the asset;
				  or
(2) Used donated funds to purchase the asset.
"Equity capital"
means total tangible and other
				  assets that are necessary, ordinary, and related to patient care from the most
				  recent provider cost report minus related total long-term debt from the most
				  recent provider cost report plus working capital defined as current assets
				  minus current liabilities.
"Fiscal year"
means the operating or business
				  year of a contractor. All contractors report on the basis of a twelvemonth
				  fiscal year, but provision is made in this chapter for reports covering
				  abbreviated fiscal periods. As determined by context or otherwise, "fiscal
				  year" may also refer to a state fiscal year extending from July 1st through
				  June 30th of the following year and comprising the first or second half of a
				  state fiscal biennium.
"Fixed equipment"
means attachments to buildings
				  including, but not limited to, wiring, electrical fixtures, plumbing,
				  elevators, heating system, and air conditioning system. Generally, fixed
				  equipment is permanently attached to the building and not subject to
				  transfer.
"Goodwill"
means the excess of the price paid
				  for a nursing facility business over the fair market value of all net
				  identifiable tangible and intangible assets acquired, as measured in accordance
				  with generally accepted accounting principles.
"Imprest fund"
means a fund that is regularly
				  replenished in exactly the amount expended from it.
"Intangible asset"
is an asset that lacks
				  physical substance but possesses economic value.
"Interest"
means the cost incurred for the use
				  of borrowed funds, generally paid at fixed intervals by the user.
"Joint facility costs"
are any costs that
				  benefit more than one facility, or one facility and any other entity.
"Leasehold improvements"
are betterments and
				  additions made by the lessee to the leased property that become the property of
				  the lessor after the expiration of the lease.
"Licensed beds"
means the adjusted reported beds
				  from the cost report associated with the cost year of the component being set.
				  This is the number of licensed beds in a facility on December 31st of the cost
				  report year according to the department of health.
"Nonadministrative wages and benefits"
are
				  wages, benefits, and corresponding payroll taxes paid for nonadmin-istrative
				  personnel, not including the administrator, assistant administrator, or
				  administrator-in-training.
"Nonallowable costs"
are the same as
				  "unallowable costs."
"Nonrestricted funds"
are funds that are not
				  restricted to a specific use by the donor, such as general operating
				  funds.
"Nursing facility occupancy percentage"
is a
				  percentage determined by multiplying the number of calendar days for the cost
				  report period by the number of licensed beds, regardless of how many beds are
				  set up, in use, or banked under chapter 246-310 WAC, for the same cost report
				  period. Then, the product is divided into the nursing facility's actual
				  resident days for the same cost report period. Banked beds are not counted as
				  licensed beds for nursing facility occupancy percentage calculation.
"Operating lease"
means a lease under which
				  rental or lease expenses are included in current expenses in accordance with
				  generally accepted accounting principles.
"Ownership interest"
means all interests
				  beneficially owned by a person, calculated in the aggregate, regardless of the
				  form the beneficial ownership takes.
"Per diem costs," or "per patient day costs," or "per
				  patient days costs"
mean total allowable costs for a fiscal period
				  divided by total patient or resident days for the same period.
"Prospective daily payment rate"
means the rate
				  assigned by the department to a contractor for providing service to medical
				  care recipients prior to the application of settlement principles.
"Real property,"
whether leased or owned by the
				  contractor, means the building, allowable land, land improvements, and building
				  improvements associated with a nursing facility.
"Recipient"
means a medicaid recipient.
"Related care"
means only those services that
				  are directly related to providing direct care to nursing facility residents
				  including but not limited to:
(1) The director of nursing services;
(2) Nursing direction and supervision;
(3) Activities and social services programs;
(4) Medical and medical records specialists; and
(5) Consultation provided by:
(a) Medical directors; and
(b) Pharmacists.
"Relative"
includes:
(1) Spouse;
(2) Natural parent, child, or sibling;
(3) Adoptive child, parent, or sibling;
(4) Stepparent, stepchild, stepbrother, stepsister;
(5) Father-in-law, mother-in-law, son-in-law,
				  daughter-in-law, brother-in-law, sister-in-law;
(6) Grandparent and grandchild; and
(7) Uncle, aunt, nephew, niece, and cousin.
"Related organization"
means an entity under
				  common ownership or common control with, or has control of or is controlled by
				  the contractor.
(1) "Common ownership" exists when an entity or person is the
				  beneficial owner of five percent or more ownership interest in the contractor
				  and any other entity.
(2) "Control" exists where an entity or person has the power,
				  directly or indirectly, significantly to influence or direct the actions or
				  policies of an organization or institution, whether or not it is legally
				  enforceable and however it is exer-cisable and exercised.
"Renovations"
means the cost of the building,
				  building improvements, leasehold improvements, and fixed equipment used to
				  calculate a facility's age. In order to be used to calculate a facility's age,
				  the cost of renovations in a calendar year must be two thousand dollars or
				  greater per licensed bed.
"Restricted fund"
means those funds in which
				  either the principal or income, or both, is limited by agreement with or
				  direction of the donor to a specific purpose.
"Significant renovations"
are renovations that
				  exceed two thousand dollars per licensed bed in a calendar year as reported on
				  the adjusted annual cost report.
"Start up costs"
are the one-time preopening
				  costs incurred from the time preparation begins on a newly constructed or
				  purchased building until the first patient is admitted. Start up costs
				  include:
(1) Administrative and nursing salaries;
(2) Utility costs;
(3) Taxes;
(4) Insurance;
(5) Repairs and maintenance; and
(6) Training costs.
Start up costs do not include expenditures for capital
				  assets.
"Total rate allocation"
means the initial
				  rebased rate for a rebase period effective July 1st. If a month and a day,
				  other than July 1st, with a year precedes "total rate allocation," it means the
				  initial rebased rate of the rebase period has been amended or updated effective
				  the date that precedes it, such as October 1, 1999 direct care component rate
				  allocation.
"Unallowable costs"
are costs that do not meet
				  every test of an allowable cost.
"Uniform chart of accounts"
are account titles
				  identified by code numbers established by the department for contractors to use
				  in reporting costs.
"Vendor number"
means a number assigned to each
				  contractor delivering care services to medical care
				  recipients.
Statutory Authority: Chapter 74.46 RCW, 2010 1st sp.s. c
					 34, and 2010 1st sp.s. c 37 § 958. 11-05-068, § 388-96-010, filed
					 2/14/11, effective 2/26/11. Statutory Authority:
					 RCW
					 74.46.800. 01-12-037, § 388-96-010,
					 filed 5/29/01, effective 6/29/01. Statutory Authority: Chapter 74.46 RCW, 1999
					 c 376 § 3 amending c 309 § 207. 99-24-084, § 388-96-010, filed
					 11/30/99, effective 12/31/99. Statutory Authority:
					 RCW
					 74.46.800. 98-20-023, § 388-96-010,
					 filed 9/25/98, effective 10/1/98; 97-17-040, § 388-96-010, filed 8/14/97,
					 effective 9/14/97. Statutory Authority:
					 RCW
					 74.46.800 and 1995 1st sp.s. c 18. 95-19-037
					 (Order 3896), § 388-96-010, filed 9/12/95, effective 10/13/95. Statutory
					 Authority:
					 RCW
					 74.46.800. 94-12-043 (Order 3737), §
					 388-96-010, filed 5/26/94, effective 6/26/94. Statutory Authority:
					 RCW
					 74.46.800 and
					 74.09.120. 93-19-074 (Order 3634),
					 § 388-96-010, filed 9/14/93, effective 10/15/93. Statutory Authority:
					 RCW
					 74.09.120. 91-22-025 (Order 3270), §
					 388-96-010, filed 10/29/91, effective 11/29/91. Statutory Authority: RCW
					 79.09.120 [74.09.120] and 74.46.800. 90-09-061 (Order 2970), § 388-96-010,
					 filed 4/17/90, effective 5/18/90. Statutory Authority: 1987 c 476. 88-01-126
					 (Order 2573), § 388-96-010, filed 12/23/87. Statutory Authority:
					 RCW
					 74.09.120 and
					 74.46.800. 85-13-060 (Order 2240),
					 § 388-96-010, filed 6/18/85. Statutory Authority:
					 RCW
					 74.09.120. 84-24-050 (Order 2172), §
					 388-96-010, filed 12/4/84. Statutory Authority:
					 RCW
					 74.46.800. 84-12-039 (Order 2105), §
					 388-96-010, filed 5/30/84. Statutory Authority:
					 RCW
					 74.09.120. 83-19-047 (Order 2025), §
					 388-96-010, filed 9/16/83; 82-21-025 (Order 1892), § 388-96-010, filed
					 10/13/82; 81-22-081 (Order 1712), § 388-96-010, filed 11/4/81. Statutory
					 Authority:
					 RCW
					 74.09.120 and
					 74.46.800. 81-06-024 (Order 1613),
					 § 388-96-010, filed 2/25/81. Statutory Authority:
					 RCW
					 74.09.120. 80-09-083 (Order 1527), §
					 388-96-010, filed 7/22/80; 79-04-061 (Order 1381), § 388-96-010, filed
					 3/28/79. Statutory Authority:
					 RCW
					 74.08.090 and
					 74.09.120. 78-06-080 (Order 1300),
					 § 388-96-010, filed 6/1/78; Order 1262, § 388-96-010, filed
					 12/30/77.