Subchapter F. COST REPORTING AND AUDIT REQUIREMENTS
Sec.
1187.71. Cost reporting.
1187.72. Cost reporting for Medicare Part B type services.
1187.73. Annual reporting.
1187.74. Interim reporting.
1187.75. Final reporting.
1187.76. Reporting for new nursing facilities.
1187.77. Auditing requirements related to cost report.
1187.78. Accountability requirements related to resident personal fund management.
1187.79. Auditing requirements related to resident personal fund management.
1187.80. Failure to file an MA-11.§ 1187.71. Cost reporting.
(a) A nursing facility shall report costs to the MA Program by filing an acceptable MA-11 with the Department. Costs in the MA-11 are:
(1) Resident care costs.
(i) Nursing.
(ii) Director of nursing.
(iii) Related clerical staff.
(iv) Practitioners.
(v) Medical director.
(vi) Utilization and medical review.
(vii) Social services.
(viii) Resident activities.
(ix) Volunteer services.
(x) Pharmacy-prescription drugs.
(xi) Over-the-counter drugs.
(xii) Medical supplies.
(xiii) Laboratory and X-rays.
(xiv) Physical, occupational and speech therapy.
(xv) Oxygen.
(xvi) Beauty and barber services.
(xvii) Minor movable property.
(xviii) Other supplies and other resident care costs.
(2) Other resident related costs.
(i) Dietary, including food, food preparation, food service, and kitchen and dining supplies.
(ii) Laundry and linens.
(iii) Housekeeping.
(iv) Plant operation and maintenance.
(v) Minor movable property.
(vi) Other supplies and other resident related costs.
(3) Administrative costs.
(i) Administrator.
(ii) Office personnel.
(iii) Management fees.
(iv) Home office costs.
(v) Professional services.
(vi) Determination of eligibility.
(vii) Gift shop.
(viii) Advertising.
(ix) Travel/entertainment.
(x) Telephone.
(xi) Insurance.
(xii) Other interest.
(xiii) Legal fees.
(xiv) Federal/State Corporate/Capital Stock Tax.
(xv) Officers’ life insurance.
(xvi) Amortization-administrative costs.
(xvii) Office supplies
(xviii) Minor movable property.
(xix) Other supplies and other administrative costs.
(4) Capital costs.
(i) Real estate tax cost.
(ii) Major movable property.
(iii) Depreciation.
(iv) Capital interest.
(v) Rent of nursing facility.
(vi) Amortization—capital costs.
(b) The MA-11 shall identify allowable direct, indirect, ancillary, labor and related party costs for the nursing facility and residential or other facility.
(c) The MA-11 shall identify costs of services, movable property and supplies furnished to the nursing facility by a related party and the rental of the nursing facility from a related party.
(d) The MA-11 shall be based on accrual basis financial and statistical records maintained by the nursing facility. The cost information contained in the cost report and in the nursing facility’s records shall be current, accurate and in sufficient detail to support the reported costs.
(e) An acceptable cost report is one that meets the following requirements:
(1) Applicable items are fully completed in accordance with the instructions incorporated in the MA-11, including the necessary original signatures on the required number of copies.
(2) Computations carried out on the MA-11 are accurate and consistent with other related computations.
(3) The treatment of costs conforms to the applicable requirements of this chapter.
(4) Required documentation is included.
(5) The MA-11 is filed with the Department within the time limits in § § 1187.73, 1187.75 and 1187.76 (relating to annual reporting; final reporting; and reporting for new nursing facilities).
(f) The nursing facility shall maintain adequate financial records and statistical data for proper determination of costs under the MA Program. The financial records shall include lease agreements, rental agreements, ledgers, books, records and original evidence of cost—purchase requisitions, purchase orders, vouchers, vendor invoices, inventories, time cards, payrolls, bases for apportioning costs and the like—which pertain to the determination of reasonable costs.
(g) Records and other information described in subsection (d) are subject to periodic verification and audit. Costs which are adequately documented are allowable.
(h) The nursing facility shall maintain the records pertaining to each cost report for at least 4 years following the date the nursing facility submits the MA-11 to the Department.
Source The provisions of this § 1187.71 amended February 8, 2002, effective July 1, 2001, 32 Pa.B. 734. Immediately preceding text appears at serial page (201550) to (201552).
Cross References This section cited in 55 Pa. Code § 1187.73 (relating to annual reporting); and 55 Pa. Code § 1187.75 (relating to final reporting).
§ 1187.72. Cost reporting for Medicare Part B type services.
(a) Nursing facilities shall utilize Medicare as a primary payor resource when appropriate, under § 1187.102 (relating to utilizing Medicare as a resource).
(b) If Medicare is the primary payor resource, the nursing facility shall exclude from allowable costs operating costs incurred in or income derived from the provision of Medicare Part B coverable services to nursing facility residents. The nursing facility shall attach to the MA-11 a copy of the cost report the nursing facility submits to Medicare for the Part B services and, when available, submit a copy of the Medicare final audit, including audit adjustments.
(c) If there is a discrepancy between the costs on the Medicare cost report or, if available, the Medicare audit report, and the adjustments made by the nursing facility on the MA-11 to exclude Medicare Part B costs, the Department will make the necessary adjustments to conform to the Medicare report.
Cross References This section cited in 55 Pa. Code § 1187.102 (relating to utilizing Medicare as a resource).
§ 1187.73. Annual reporting.
(a) The fiscal year, for purposes of the MA Program for nursing facilities, shall be either January 1 through December 31 or July 1 through June 30 as designated by the nursing facility. The fiscal year designated by the nursing facility may not be changed except in the event of the sale of the nursing facility to a new owner.
(b) A nursing facility shall submit an acceptable MA-11 to the Department within 120 days following the June 30 or December 31 close of each fiscal year as designated by the nursing facility. An acceptable MA-11 is one that meets the requirements in § 1187.71(e) (relating to cost reporting). No request for an extension to file an annual cost report will be granted except in accordance with § 1187.1(d)(2) (relating to policy). The report shall be prepared using the accrual basis of accounting and shall cover a fiscal period of 12 consecutive months.
Cross References This section cited in 55 Pa. Code § 1187.22 (relating to ongoing responsibilities of nursing facilities); and 55 Pa. Code § 1187.71 (relating to cost reporting).
§ 1187.74. Interim reporting.
A nursing facility may not file interim cost reports.
§ 1187.75. Final reporting.
(a) A nursing facility that enters into a termination agreement or an agreement of sale, or is otherwise undergoing a change of ownership or is withdrawing or being terminated as a nursing facility, shall file an acceptable final MA-11 cost report as well as outstanding annual cost reports with the Department within 90 days of the effective date of the termination, transfer, withdrawal or change of ownership and shall provide financial and statistical records to the Department for auditing. An acceptable MA-11 is one that meets the requirements in § 1187.71(e) (relating to cost reporting).
(b) A nursing facility may request an extension to file its final cost reports as required by subsection (a) of up to 30 days from the date the cost reports are due if the nursing facility’s request is received by the Department prior to the expiration of the 60th day of the 90-day period specified in subsection (a); the reasons for the extension request and the amount of time requested are specified; and the requirements of § 1187.1(d) (relating to policy) are met. Further extensions will not be granted. The denial of a request for an extension is an adverse action appealable in accordance with § 1187.141 (relating to nursing facility’s right to appeal and to a hearing). Failure to appeal a denial within the time period provided precludes any appeal or challenge relating to the denial in another proceeding.
Cross References This section cited in 55 Pa. Code § 1187.22 (relating to ongoing responsibilities of nursing facilities); and 55 Pa. Code § 1187.71 (relating to cost reporting).
§ 1187.76. Reporting for new nursing facilities.
Nursing facilities beginning operations during a fiscal period shall prepare an MA-11 from the date of certification for participation to the end of the nursing facility’s fiscal year.
Cross References This section cited in 55 Pa. Code § 1187.71 (relating to cost reporting).
§ 1187.77. Auditing requirements related to cost report.
(a) The Department will audit acceptable cost reports filed to verify nursing facility compliance with:
(1) This chapter.
(2) Chapter 1101 (relating to general provisions).
(3) The schedules and instructions attached to the MA-11.
(b) A nursing facility shall make financial and statistical records to support the nursing facility’s cost reports available to State and Federal representatives upon request.
(c) The Department will conduct audits in accordance with auditing requirements set forth in Federal regulations and generally accepted government auditing standards.
(d) The Department will conduct an audit of each acceptable cost report with an end date of June 30, 1996, or December 31, 1996, and thereafter within 1 year of the Department’s acceptance of the cost report. This subsection will not apply if the nursing facility is under investigation by the Attorney General.
(e) The auditor will certify to the Department the allowable cost for the nursing facility to be input into the NIS database for use in determining the median costs.
(f) A nursing facility that has certified financial statements, Medicare intermediary audit reports with adjustments and Medicare reports for the reporting period shall submit these reports with its cost report, at audit or when available.
§ 1187.78. Accountability requirements related to resident personal fund management.
(a) A nursing facility may not require residents to deposit their personal funds with the nursing facility. A nursing facility shall hold, safeguard and account for a resident’s personal funds upon written authorization from the resident in accordance with this section and other applicable provisions in State and Federal law.
(b) A resident’s personal funds may not be commingled with nursing facility funds or with the funds of a person other than another resident.
(c) A resident’s personal funds in excess of $50 shall be maintained in an interest bearing account, and interest earned shall be credited to that account.
(d) A resident’s personal funds that do not exceed $50 may be maintained in a noninterest bearing account, interest bearing account or petty cash fund.
(e) Statements regarding a resident’s financial record shall be available upon request to the resident or to the resident’s legal representative.
(f) The nursing facility shall notify each resident that receives MA benefits when the amount in the resident’s personal fund account reaches $200 less than the SSI resource limit for one person.
(g) Within 60 days of the death of a resident, the nursing facility shall convey the resident’s funds and a final accounting of those funds to the individual or probate jurisdiction administering the resident’s estate.
(h) The nursing facility may not impose a charge against the personal funds of a resident for an item or service for which payment is made under MA or Medicare.
(i) The nursing facility shall maintain records relating to its management of residents’ personal funds for a minimum of 4 years. These records shall be available to Federal and State representatives upon request.
(j) The nursing facility shall purchase a surety bond or otherwise provide assurances of the security of personal funds of the residents deposited with the nursing facility.
Cross References This section cited in 55 Pa. Code § 1187.22 (relating to ongoing responsibilities of nursing facilities).
§ 1187.79. Auditing requirements related to resident personal fund management.
(a) The Department will periodically audit residents’ personal fund accounts.
(b) If discrepancies are found at audit, the nursing facility shall make restitution to the residents for funds improperly handled, accounted for or disbursed. The Department may sanction the nursing facility in accordance with Subchapter I (relating to enforcement of compliance for nursing facilities with deficiencies).
§ 1187.80. Failure to file an MA-11.
(a) Failure by the nursing facility to file a timely MA-11, other than a final MA-11 and annual MA-11s due along with a final MA-11, may result in termination of the nursing facility’s provider agreement and will result in adjustment of the nursing facility’s per diem rate as provided in this subsection. An MA-11 is considered timely filed if the MA-11 is received within 120 days following the June 30 or December 31 close of each fiscal year as designated by the nursing facility, or if an extension has been granted, within the additional time allowed by the extension. The Department may also seek injunctive relief to require proper filing, as the Department may deem is in the best interest of the efficient and economic administration of the MA program.
(1) Cost report periods prior to January 1, 2001.
(i) If an MA-11 is not timely filed, the nursing facility’s per diem rate will be adjusted downward by 5% beginning the first day of the next month and will remain in effect until the date that an acceptable MA-11 is filed with the Department.
(ii) If an MA-11 is timely filed and is unacceptable, the Department will return the MA-11 to the nursing facility for correction. If an acceptable MA-11 is not filed by the end of the 30th day from the date of the letter returning the unacceptable MA-11 from the Department, the nursing facility’s per diem rate will be adjusted downward by 5% beginning the first day of the next month and will remain in effect until the date that an acceptable MA-11 is filed with the Department.
(2) Cost report periods beginning January 1, 2001, and thereafter.
(i) If an MA-11 is not timely filed, the net operating components of the nursing facility’s per diem rate will be adjusted downward by 5% and the movable property component of the nursing facility’s capital per diem rate will be reduced to $0. This per diem rate reduction will begin the first day of the next month and remain in effect until the date that an acceptable MA-11 is filed with the Department.
(ii) If an MA-11 is timely filed and is unacceptable, the Department will return the MA-11 to the nursing facility for correction. If an acceptable MA-11 is not filed by the end of the 30th day from the date of the letter returning the unacceptable MA-11 from the Department, the net operating components of the nursing facility’s per diem rate will be adjusted downward by 5% and the movable property component of the nursing facility’s capital per diem rate will be reduced to $0. This per diem rate reduction will begin the first day of the next month and remain in effect until an acceptable MA-11 is filed with the Department.
(b) If a nursing facility fails to file a timely final MA-11 and outstanding annual MA-11s:
(1) The net operating components of the nursing facility’s per diem rate will be determined on the basis of the nursing facility’s peer group medians, prior to the percent of median adjustment in accordance with § 1187.96 (relating to price and rate setting computations), for the last fiscal period for which the nursing facility has an acceptable MA-11 on file.
(2) The capital component of the nursing facility’s per diem rate will be set at $0.
Source The provisions of this § 1187.80 amended February 8, 2002, effective July 1, 2001, 32 Pa.B. 734. Immediately preceding text appears at serial page (201555) to (201556).
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