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

insurance and depreciation, therefore these costs are not separately allowed. Detailed mileagelogs must be maintained to support the miles reported on the cost report. This will includebeginning and ending odometer reading and purpose of travel. All travel must be authorized byadministrator or designee. All travel must be included in the mileage log and be indicated forthose miles directly related to resident services.514.13.20 Allocated CostsHospital based nursing facilities and nursing facilities associated with assisted living facilities orother related parties that use allocated costs must maintain detailed documentation to supportany costs allocated on the cost report (either allocated to the facility or allocated amongindividual cost centers) and the allocation calculation(s) must be made available upon requestfor desk review or audit.All costs must show reasonableness and be comparable to other facilities in theindustry.514.13.21 Home Office CostsCertain home office costs may be includable in the provider’s cost report and considered forreimbursement as part of the provider’s costs. Where the home office of the chain provides noservices related to patient care, neither the costs nor the equity capital of the home office maybe recognized in determining the allowable costs of the providers in the chain. The administratoror designee must prove the home office costs are related to patient care. The administrator ordesignee must maintain documentation to establish the benefit to patient care realized as aresult of any home office costs included in the cost report, please reference section 514.13.12for additional guidance. Management fees charged between related organizations are notallowable costs and such fees must be reported as non-allowable on the provider’s cost report.Any cost report received with related party management fees and home office costs will berejected and returned to the facility for correction. Home office costs must be appropriatelyreported by individual line item on the home office schedules of the cost report, and should notbe aggregated as management fees. Thus, allowable cost is limited to the lesser of (1)allowable costs properly allocated to the provider and (2) the price for comparable services,facilities, or supplies that could be purchased elsewhere, taking into account the benefits ofeffective purchasing that would accrue to each member provider because of aggregatepurchasing on a chain wide basis. Home office costs must be reported at cost and net of anyinter-company profit, and the home office must be disclosed as a related party on the costreport.Home office costs that are not otherwise allowable costs when incurred directly by the providercannot be allowable as home office costs to be allocated to providers. Costs related tononmedical enterprises are not considered allowable home office costs. All allocated centraloffice costs are considered administrative in nature and, therefore, must comply with regulationsgoverning allowability at individual facility locations.Department of Health and Human Resources Chapter 514: Nursing Facility Services Page 61January 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.