Opinion ID: 693465
Heading Depth: 3
Heading Rank: 3

Heading: The Provider Reimbursement Manual.

Text: 41 In addition to the regulations, interest expense is addressed in the Provider Reimbursement Manual (PRM). The PRM is an extensive set of informal interpretative guidelines and policies published to assist intermediaries and providers in applying the reasonable cost reimbursement principles. 42 The PRM supports the contention that Medicare policy directs each provider to report actual interest expense. Sections 202.2 and 2150.3(B) of the PRM, which were effective for the cost reporting period at issue, specifically address reimbursable interest costs. 43 Section 202.2 addresses necessary interest expense, defining it in much the same way as the regulations. Section 2150.3(B) addresses the allocation of costs in a chain organization. 6 This section provides: 44 The initial step in the allocation process is the direct assignment of costs to the chain components. Allowable costs incurred for the benefit of, or directly attributable to, a specific provider or nonprovider activity must be allocated directly to the chain entity for which they were incurred. For example, where such costs are paid by the home office, interest expense is allocated to the facility for which the loan was made. 45 The court in Fairview Community Hospitals Group Appeal, PRRB Decision No. 87-D43, aff'd, Fairview Hospital v. Bowen, p 37,063 CCH Medicare and Medicaid Guide, Civ. No. 4-87-316, 1988 WL 235563 (D.Minn.1988), the only court that has previously addressed this precise issue, found PRM Sec. 2150.3(B) to be determinative, stating that it specifically addresses how costs in a group organization are to be accounted for. Id. at 16,601. 46 We disagree with the providers' contention that the PRM and Fairview v. Bowen are inapplicable here. Although this Circuit has previously determined the legal status of the PRM as merely a  'guide ... [without] the binding effect of law or regulation,'  National Medical Enterprises v. Bowen, 851 F.2d 291, 293 (1988) (quoting Phoenix Baptist Hospital & Medical Center v. Heckler, 767 F.2d 1304 (9th Cir.1985)), such determination is nevertheless consistent with our position. Certainly, the PRM was never intended to establish Medicare policy. Id. However, in the instant case, the PRM guidelines are not in conflict with substantive Medicare regulations. The guidelines merely provide further clarification, consistent with the regulations. 47