Chapter 514 - Nursing Facility Services - DHHR - State of West ...

The Model Nursing Facility Standard also sets an upper reasonable cost limit forconstructing a nursing facility. This effectively discourages the creation of unnecessarilycostly facilities. Currently, land is being appraised at its “highest and best” use. Thisoccasionally results in land values in excess of the building and equipment appraisal.D. Appraisal TechniqueA complete appraisal of each new facility will be performed after certification andapproval for Medicaid program participation by a qualified appraisal firm under contractwith the Department. Updates of the initial appraisal will be performed annually and usedin the October 1 st rate setting period, in addition to the following April 1 st rate settingperiod. Updates may be performed at any time during the annual period when therehave been major changes to the bed size of the facility and such changes would affectthe SAV for rate setting purposes. Initial and annual appraisals must include onsiteinspections. Prior to rate setting, the updated appraisals will be indexed to June 30, as acommon point valuation, based on the Consumer Price Index. All appraisals will includean on-site evaluation.A copy of the facility appraisal report is furnished to the facility for its records.514.13.17 Capitalized AssetsAssets that have a value equal to or greater than $3,000 with an estimated useful life of twoyears or more should be capitalized. The cost of the asset includes, but is not limited to,installation, delivery and acquisition costs. A repair of an asset that exceeds $3,000 per projectand extends the useful life of the asset more than two years should be capitalized. The cost ofthe repair includes, but is not limited to labor and materials. Renovation type projects wheresmall amounts of material at a time are purchased, over an extended period of time, should becapitalized to reflect the true nature of the project.514.13.18 Working Capital InterestWorking Capital Interest (WCI) is limited to short term loans (term of one year or less) taken outto meet immediate needs of daily operations. To be allowable, there must be a genuine effortby the provider to repay these notes. If no evidence of repayment is apparent and these notesare merely renewed throughout the year, the Program will not consider these to be bona fideworking capital notes and the interest incurred on them will not be allowed if no justification canbe made for nonpayment of the note.514.13.19 Vehicle ExpensesThe cost of operating all licensed vehicles will be limited to the per mile rate approved by theWest Virginia Travel Management Office. This limitation applies to vehicles owned by thefacility, any costs related to reimbursement to employees for use of personal vehicles, rentalvehicles, or any other vehicles. The per-mile rate is computed to include the following costs:rental or lease payments, fuel, interest, repairs, routine maintenance, inspections and licenses,Department of Health and Human Resources Chapter 514: Nursing Facility Services Page 60January 1, 2013DISCLAIMER: This manual does not address all the complexities of Medicaid policies and procedures,and must be supplemented with all State and Federal Laws and Regulations.