§ 1163.453. Allowable and nonallowable costs.
(a) Payment for cost reimbursed inpatient hospital services is based on the allowable cost for the services in this section.
(b) Unless clearly specified to the contrary in this chapter, allowable costs for the MA Program are computed under Medicare principles under the Social Security Act (42 U.S.C.A. § § 301—1397f) and Federal regulations and instructions.
(c) The Department may not make payment for a service at a rate higher than the hospital’s customary charge. For the purpose of this chapter, the hospital’s customary charge is the usual charge to the general public for a specific service.
(d) Costs not allowable under the MA Program are:
(1) Costs exceeding the limits established by the Department of Health and Human Services under Medicare regulations set forth at 42 CFR 413.30 (relating to limitations on reimbursable costs).
(2) Costs related to the provision of a noncompensable service or item under § 1163.455 (relating to noncompensable services and items).
(3) Costs related to depreciation and interest for rehabilitation hospitals unless the hospital was one of the following:
(i) Constructed prior to July 1, 1983.
(ii) Issued either a Section 1122 approval letter or letter of nonreviewability under 28 Pa. Code Chapter 301 (relating to limitation on Federal participation for capital expenditures) or a certificate of need or letter of nonreviewability under 28 Pa. Code Chapter 401 (relating to Certificate of Need Program) for the project by the Department of Health no later than June 30, 1983. The Department will not recognize depreciation or interest as an allowable cost if the facility does not substantially implement the project as defined at 28 Pa. Code § 401.5(j)(2) (relating to Certificate of Need) within the effective period of the original Section 1122 approval or the original certificate of need.
(4) Costs for legal services relating to litigation against the Commonwealth, including administrative appeals, if the litigation is finally decided in favor of the Commonwealth.
(5) Costs for relocating or housing employes.
(6) Telephone, television and radio services in patient rooms.
(7) Personal care and maternity kits.
(8) Costs related to depreciation and interest for providers reimbursed under this subchapter except for medical rehabilitation units unless:
(i) An application for a certificate of need for the new or additional beds has been approved by the Department of Health, with an effective date of June 30, 1986, or earlier. In order for the facility to receive payment, the project shall be substantially implemented as defined at 28 Pa. Code § 401.5(j)(2) within the effective period of the certificate of need.
(ii) A letter nonreviewability has been issued on or before June 30, 1986.
(9) For medical rehabilitation units, costs related to capital costs for new or additional beds unless one of the following applies:
(i) The new or additional medical rehabilitation beds were placed in service prior to July 1, 1988, and are located in a medical rehabilitation unit which was enrolled in the MA Program with an effective date no later than July 1, 1988. This includes beds which are one of the following:
(A) Located in a unit which has applied to the Medicare Program for exclusion prior to July 1, 1988 and completes its 12-month evaluation period prior to July 1, 1989.
(B) Placed in service during the 12-month Medicare evaluation period ending prior to July 1, 1989.
(C) Covered in Medicare’s initial letter of exclusion related to those beds.
(ii) Either a Section 1122 approval or letter of nonreviewability under 28 Pa. Code Chapter 301 or a certificate of need or letter of nonreviewability under 28 Pa. Code Chapter 401 for the new or additional medical rehabilitation unit beds was issued by the Department of Health no later than June 30, 1988. In addition, the project shall have been substantially implemented as defined at 28 Pa. Code § 401.5(j)(2) within the effective period of the original Section 1122 approval or the original certificate of need, including one 6-month extension period.
(e) Allowable costs in addition to those costs allowable under subsection (b) are:
(1) Costs for direct and indirect chaplaincy expenses related to patient care, excluding training costs associated with the chaplaincy program.
(2) Costs for necessary diagnostic services provided to a recipient by another hospital. The costs may be included by the hospital at which the recipient is an inpatient at the time of the cost settlement.
(f) For providers reimbursed under this subchapter, capital costs related to replacement beds will be recognized as allowable if:
(1) The facility received a certificate of need or letter of nonreviewability for the replacement beds.
(2) The replacement beds are physically replacing beds in the same facility and capital costs related to the beds being replaced were recognized as allowable.
(3) The project is substantially implemented as defined at 28 Pa. Code § 401.5(j)(2) within the effective period of the original Section 1122 approval or the original certificate of need, including one 6-month extension period.
Authority The provisions of this § 1163.453 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § § 201 and 443.1(1)).
Source The provisions of this § 1163.453 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended February 28, 1986, effective March 1, 1986, 16 Pa.B. 600; amended November 7, 1986, effective July 1, 1986, 16 Pa.B. 4384; amended June 16, 1989, effective immediately and applies retroactively to July 1, 1988, 19 Pa.B. 2563; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181874) to (181877).
Cross References This section cited in 55 Pa. Code § 1163.451 (relating to general payment policy); 55 Pa. Code § 1163.452 (relating to payment methods and rates); and 55 Pa. Code § 1163.457 (relating to payment policies relating to out-of-State hospitals).
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