§ 521.7. Specific instructions.

 Form AG12 shall be completed in accordance with the following instructions:

 Page 1.  Provider Identification and Certifications

 This page provides for identification of the provider and the period covered by the report. Certification is required by the provider’s administrator, chief financial officer, and by the preparer if other than the provider.

 Page 2.  Inpatient Statistics and Reimbursable Costs

   I. Statistical Data.

 Inpatient bed complement and occupancy. The bed complement is classified by the number of beds regularly available for inpatient routine services in the institution. Bassinets are those located in the nursery for regular use by newborn infants.

 Separate statistics are required for reporting ‘‘General Care Units’’ and ‘‘Special Care Units.’’ A special care unit is defined as one in which the care required is extraordinary, on a concentrated and continuous basis, and must be physically identifiable as separate from general care areas. There must be specific written policies for each of such designated units which include, but are not limited to, burn, coronary care, pulmonary care, trauma and intensive care units but exclude postoperative recovery rooms, post anesthesia recovery rooms, or maternity labor rooms.

 Statistics for the special care units should be entered in the aggregate in column 2 of Section I; the detail statistics for each of such special care units must be separately recorded as indicated in Section II.

 Items No. 1 and No. 2. State the number of beds and, separately, newborn bassinets available for use at the beginning of the period by each classification of patient. Enter all data applicable to general care units in column 1 and data applicable to special care units in column 2.

 Item No. 3. Total bed and bassinet days available. Compute the total days available for the period by multiplying the number of beds and bassinets by the number of days in the period. Any increase or decrease in the number of beds must be taken into consideration as well as the number of days elapsed during such increase or decrease.

 Items No. 4, 5 and 6. Inpatient days. A patient day is the period of service for one day of care provided an inpatient adult, child, or newborn infant. Newborn inpatient days are counted as those days newborn infants occupy bassinets in the nursery. Days of care for infants remaining after the mother’s discharge and transferred from the nursery should be counted with other patient days and not included in the count of newborn inpatient days.

 The day of the patient’s admission is counted but not the day of discharge. A patient admitted and discharged on the same day is counted as one patient day, provided a regular hospital bed is occupied and a hospital chart is set up for the patient.

 Total patient days applicable to all patients are classified between general care units and special care units in columns 1 and 2 respectively. Compensable inpatient days of care eligible for reimbursement under the Medical Assistance Program are reported in the designated columns applicable to the respective classification of service in column 3 and in column 4.

 Item 7. Percent occupancy. The ratio of actual patient days to the total available bed days should be shown separately for each classification. Determine the ratio for each classification of patients (columns 1 and 2) by dividing the actual inpatient days, line 6, by the total bed days available for the classification, line 3. Example:

   Actual patient days—general care units … 58,400

   Total general care unit days available during year(200 beds x 365 days) … 73,000

   Percent Occupancy—general care units (58,400 ÷ 73,000) … 80%

 Item 8. Discharges, including deaths. The formal release of patients. The day on which the patient begins a leave of absence is treated as a day of discharge and is not counted as an inpatient day unless he returns to the hospital by midnight of the same day. The day the patient returns to the hospital from such an absence is treated as a day of admission and is counted as an inpatient day if he is present at midnight of that day.

 Item 10. Admissions. An inpatient admission is the acceptance by the provider of a patient for service involving the occupancy of a hospital bed, crib, or bassinet, and the maintenance of a hospital chart during the period of care. Births of newborn infants in the institution are counted as admissions and are to be included in the total number reported.

 Item 11. Average number of employes for period. The number of fulltime equivalent employes is determined by adding the total number of hours worked by all full-time and part-time employes for a specific period and dividing the sum by the number of hours in the standard work period. Example:

   Total hours worked by all employes for fiscal year … 1,040,000

   Standard hours worked by full-time employe (40 hours X 52 weeks) … 2,080

   Number of full-time equivalent employes (1,040,000 total hours ÷ 2,080 standard hours) … 500

   II. Determination of Reimbursable Cost

 This section provides for summarizing reimbursable costs applicable to the Medical Assistance Program by users of either the DEPARTMENTAL or COMBINATION method of apportionment.

 The cost of inpatient routine services for Medical Assistance patients is determined on the basis of a separate average cost per diem for general care units:

   Line 1. General care units.

 Column 1. Enter the total inpatient days of service provided all patients. This total must agree with the number of days entered in Section 1, line 6, column 1.

 Column 2. Enter the total inpatient days of service provided Medical Assistance patients. This total must agree with the number of days entered in Section I, line 6, column 3. It is required that the reported days and related charges applicable to Medical Assistance patients be supported by auditable summaries and detail records (kept available for examination and verification) of the eligibility of patients and approvals for services and charges.

 Column 3. Enter the average cost per diem brought forward from Schedule C, page 8, line 3 of column 8.

 Column 4. Provides for entering the routine service costs applicable to Medical Assistance patients by providers using the DEPARTMENTAL METHOD of apportioning costs. The amount is determined by multiplying the average cost per diem of general care units (column 3) times the eligible inpatient days of care provided Medical Assistance patients (column 2).

 Column 5. Provides for entering the routine service costs applicable to Medical Assistance patients by providers using the COMBINATION METHOD of apportioning costs. The amount is determined by multiplying the average cost per diem of general care units (column 3) times the eligible inpatient days of care provided Medical Assistance patients (column 2).

   Lines 2—6. Special care units.

 These lines provide for the apportionment of inpatient routine service cost of special care units to the Medical Assistance Program. Under the DEPARTMENTAL METHOD, reimbursement is determined on the basis of an average cost per diem for each special care unit. Under the COMBINATION METHOD, reimbursement is determined on an aggregate average cost per diem for all special care units.

 Column 1. Enter the total days of service for each special care unit on lines 2 through 5. Enter the sum total days for all such units on line 6. This total must agree with the number of days entered in Section I, line 6, column 2.

 Column 2. Enter the total inpatient days of service provided Medical Assistance patients, for each special care unit, on lines 2 through 5. Enter the sum total Medical Assistance days for all such units on line 6. This total must agree with the number of days entered in Section I, line 6, column 4.

 Column 3. Enter the average cost per diem brought forward from Schedule C:

 Providers using the DEPARTMENTAL METHOD will bring forward the average cost per diem from Schedule C, page 8, column 8, lines 4 through 7, and enter such amounts on the appropriate line (2 through 5) applicable to each specified special care unit.

 Providers using the COMBINATION METHOD will bring forward the average cost per diem from Schedule C, page 8, column 8, line 8, and enter that amount on line 6.

 Column 4. Provides for entering the routine service cost of special care units applicable to Medical Assistance patients by users of the DEPARTMENTAL METHOD of apportioning costs. The amount is determined by multiplying the average cost per diem for each special care unit (column 3) times the eligible special care unit days of care provided Medical Assistance patients (column 2).

 Column 5. Provides for entering the routine service cost of special care units applicable to Medical Assistance patients by users of the COMBINATION METHOD of apportioning costs. The amount is determined by multiplying the aggregate average cost per diem for all special care units (column 3, line 6) times the sum total of eligible special care unit days of care provided Medical Assistance patients (column 2, line 6).

   Line 7. Ancillary services.

 Line 7 provides for entering the ancillary service costs apportioned to care provided Medical Assistance patients. The ancillary service costs are apportioned on Schedule C, page 8, and brought forward to page 2, line 7, column 4 (DEPARTMENTAL), or column 5 (COMBINATION).

   Line 8. Reimbursable cost—Medical Assistance Program.

 Column 4. The sum of the figures in column 4 (line 1, general care units cost; lines 2-5, special care units cost; and line 7, ancillary services cost) is entered on line 8, column 4, and is the reimbursable cost applicable to Medical Assistance patients as determined by providers using the DEPARTMENTAL METHOD of cost apportionment.

 Column 5. The sum of the figures in column 5 (line 1, general care units cost; line 6, special care units cost; and line 7, ancillary service cost) is entered on line 8, column 4, and is the reimbursable cost applicable to Medical Assistance patients as determined by providers using the COMBINATION METHOD of cost apportionment.

Cost Finding

 Procedures and methods for cost finding, and for determining reimbursable costs applicable to services provided Medical Assistance patients, are incorporated in the forms provided.

 In the preparation of this report under the DEPARTMENTAL METHOD of cost apportionment, costs attributable to nonrevenue-producing centers (general service cost centers) are allocated, by the use of step-down method procedures, to all other cost centers served. DEPARTMENTAL METHOD providers must use Work-sheets B and B-1 which provide for allocating the costs of the general service cost centers by the use of stepdown procedures. Schedules B and B-1 are not applicable to providers having more than 99 beds.

 In the preparation of this report under the COMBINATION METHOD of cost apportionment, costs are allocated by the use of simplified cost finding. Simplified cost finding provides for combining the costs of general service cost centers having a common basis of allocation. The total costs of each combined group of centers are allocated in one process. The allocation bases to be used and the cost centers which are to be combined for allocation are not optional but are identified and provided for. COMBINATION METHOD providers must use Schedules B and B-1 which provide for allocating the costs of the general service cost center by the use of the simplified cost finding method. Worksheets B and B-1 are not applicable to providers having less than 100 beds.

   Page 3. Schedule A—Reclassification and adjustment of trial balance of expenses

 This schedule provides for the preparation of the trial balance of expense accounts from the provider’s accounting books and records. It also provides for the necessary reclassifications and adjustments to specific accounts. The accounts, or cost centers, are listed on this schedule in a manner which facilitates the combination of the various groups of cost centers for purposes of simplified cost finding under the COMBINATION METHOD. This schedule is also to be completed by providers required to use the DEPARTMENTAL METHOD.

 Columns 1, 2 and 3—Direct expenses per books. The expenses listed in these columns should be in accordance with the provider’s accounting books and records. List on the appropriate lines in columns 1, 2 and 3, the total expenses incurred during the reporting period. The expenses must be detailed between salaries (column 1) and all other expenses (column 2). The sum of columns 1 and 2 must equal column 3. Any needed reclassifications and adjustments should be recorded in columns 4 and 6, as appropriate.

 Column 4—Reclassifications. Enter in this column any reclassifications to the total expenses in column 3 which are needed to effect proper cost allocation.

 Page 5. Schedule A-2, is provided to show the details of reclassification adjustments to the Administrative and General Expenses per books, line 12, column 3 of Schedule A.

 On Schedule A-2, lines 2 through 10, the total of the employe health and welfare expenses listed are deducted from line 1, Total Administrative and General Expenses. Total Employe Health and Welfare Expenses, line 10, may then be reclassified on Schedule A for allocation on the basis of ‘‘gross salaries.’’ Providers may use the blank, lower section of page 5, or prepare additional schedules as necessary, to reclassify any expenses which are not specifically provided for.

 Expenses pertaining to buildings, fixtures, and movable equipment, must be allocated on the same basis as the respective depreciation expense. Such expenses include insurance, rent, interest on funds borrowed to purchase buildings and equipment, and property taxes. Interest on funds borrowed for the payment of operating expenses must be allocated with Administrative and General Expenses.

 Providers using the COMBINATION METHOD are required to reclassify cost between Central Services and Supply, line 15, and Cost of Medical Supplies Sold, line 29; similarly, costs related to drugs charged to patients which are included on line 16. Pharmacy, must be reclassified and included with like costs on line 22, Cost of Drugs Charged to Patients. The expenses in each cost center should be separately reclassified on the basis of the total amount of ‘‘costed’’ or priced requisitions applicable to each cost center. When costing the requisitions, a factor should be added to give effect to the direct salaries and expenses of the respective cost centers.

 Where the provider’s routine accounting procedures include inter-departmental charges for various overhead costs, and the charges are based on appropriate statistics and records, reclassifications of the costs to the general service cost centers listed on Schedule A are not necessary.

 Column 5—Trial balance reclassified. Adjust the amounts entered in column 3 by the amounts entered in column 4, increase or (decrease), and extend the net balances to column 5.

 Column 6—Adjustments to expenses. Where the provider’s operating costs include amounts not related to patient care, specifically not reimbursable under the program, or flowing from the provision of luxury items or services (that is, those items or services substantially in excess of or more expensive than those generally considered necessary for the provision of needed health services), such amounts will not be allowable.

 Schedule A-1 is provided for listing the increases and (decreases) of the trial balance of expense and summarizing the total adjustments in column 6 of Schedule A. The adjustments should include costs and expenses for supplies and services which are not covered under the program, which are specifically unallowable as being not related to patient care, that are not appropriate, or that are out of line with other facilities in the same area, similar in size, scope of service, utilization, and other relevant factors. Such costs include, but are not limited to, costs of memberships in organizations not related to patient care or the efficient operation of the facility; expenses related to social activities, parties, and entertainment; similar costs and expenses contrary to applicable State and Federal laws and regulations.

 The adjustments should include all income which is deductible from operating expenses, and revenue which is a return of expense rather than income. For example, income from patients for telephone and television services should be used to reduce expense since the expense related to these services are included in total expenses, and payment has already been received in these amounts by the provider.

 The descriptions set forth on the various lines of Schedule A-1 indicate the more common items affecting allowable costs, or that result in costs incurred for objectives other than patient care, and requiring adjustments. The provider should indicate by the letter ‘‘A’’ when the cost has been determined and forms the basis for adjustment. Where costs are not determinable, the notation ‘‘B’’ should be made to indicate that the amount received for the service is the basis for the adjustment. Other examples of specific transactions for which adjustments would be indicated are:

 A provider may arrange to process billings and collect the proceeds on behalf of a specialist, such as a therapist, and charge a fee for the services. Administrative and General Expenses, on line 12 of Schedule A, must be reduced by the amount of such fees received;

 Expenses incurred in fund raising activities related to the solicitation of donations, contributions, and similar appeals are not reimbursable under the Medical Assistance Program and must be eliminated from allowable costs;

 Where depreciation expense computed in accordance with the principles for cost reimbursement differs from the depreciation expense per the provider’s books (and reported on Schedule A, lines 1 and 2) the amount of the difference must be shown on the indicated lines of this Schedule A-1.

 The preparer should make sure that the amounts on this schedule are correctly summarized and carried forward to the proper line in column 6 of Schedule A.

 Column 7—Reclassified adjusted expenses. Adjust the amounts in column 5 by the amounts in column 6, increase or (decrease), and extend the net balances to column 7. On line 44, Total Expenses, column 7 must equal column 5 plus or minus column 6.

 Providers using the COMBINATION METHOD (having less than 100 beds) should transfer the costs in column 7, on lines marked with an asterisk (*), to Schedules B and B-1 as indicated.

 Providers using the DEPARTMENTAL METHOD (having more than 99 beds) should transfer the individual amounts in column 7 to Worksheet B, column 1, as appropriate.

   Line 8—Nursing administration and service.

 Providers that do not charge nursing costs directly to the various patient care cost centers must allocate, on the appropriate cost finding schedule (or worksheet), the total nursing administration and nursing service cost. Providers that charge the cost of nursing service directly to the various patient care cost centers will allocate from this line the cost of nursing administration only.

   Lines 33, 34 and 35.

 These lines should be appropriately labeled to indicate the purpose for which they are being used.

   Line 44—Total expenses.

 These total expenses are the sums of the amounts on lines 5, 6, 7, 11, 19, 20, 21, 22, 30, 31, 32, 33, 34, 35, 36, 37, 41, 42 and 43.

 Page 6. Schedule B Cost Allocation—General Service Costs.

 Page 7. Schedule B-1 Cost Allocation—Statistical Basis.

 Schedules B and B-1 provide for cost finding under the COMBINATION METHOD of cost apportionment. This method provides for allocating the costs of the general service cost centers, lines 1-19 of Schedule A, directly to the revenue producing and nonreimbursable cost centers on Schedule B. Schedule B-1 provides for the statistics necessary to allocate the general service costs to the revenue producing and nonreimbursable cost centers on Schedule B.

 The statistical bases and applicable cost centers in the allocation of costs are identified and provided for on Schedule B-1.

 The following procedures, numbered (1)—(17), will serve as a guide in the process of completing these schedules:

   (1)  Enter on Schedule B, columns 2-7 line A, and on Schedule B-1, columns 2-7, line 16, the following general service costs to be allocated. These costs are obtained from page 3, Schedule A, as follows:

FROM: PAGE 3 SCHEDULE A, COLUMN 7

TO: SCH. B, LINE A ADD SCH. B-1, LINE 26

Line	Column
5	Depreciation, Operation & Maint-enance of Plant, & Housekeeping … 2
6	Employee Health and Welfare … 3
7	Dietary and Cafeteria … 4
11	Nursing and Intern-Resident Services … 5
19	Other General Service Cost Centers … 7

   (2)  On Schedule B, column 1, line A, enter the total of columns 2-7, line A.

   (3)  On Schedule B, column 1, lines 1-14, enter the direct costs of the revenue producing and nonreimbursable cost centers which are obtained from page 3, Schedule A, as follows:

FROM: PAGE 3 SCHEDULE A, COLUMN 7

TO: SCHEDULE B, COLUMN 1

Line	Column
20	Radiology … 1
21	Laboratory … 2
22	Cost of drugs sold … 3
30	Other ancillary service cost centers … 4
31	General care units … 5
32	Newborn nursery … 6
33	Special care unit (specify) … 7
34	(Specify) … 8
35	(Specify) … 9
36	Clinic and referred … 10
37	Emergency … 11
41	Nonreimbursable cost centers … 12
42	Research … 13
43	Other (specify) … 14

   (4)  On Schedule B, line 15, enter the total of column 1 (line A plus lines 1-14). This total must equal the amount on Schedule A, column 7, line 44.

   (5)  On Schedule B-1, columns 2-5, enter on lines 1-14 the portion of the statistical base over which the expenses of the general service cost centers are to be allocated. The statistical base to be used in each column is identified in the column heading and is to reflect only those statistics applicable to the revenue producing and nonreimbursable cost centers. Do not include any general service cost center statistics. Enter on line 15 of columns 2-5, the sum of lines 1-14.

   (6)  On Schedule B-1, columns 2-5, line 17, determine the ‘‘Unit Cost Multiplier’’ by dividing the amount of ‘‘General Service Costs,’’ line 16, by the statistics on line 15.

   (7)  On Schedule B-1 multiply the appropriate unit cost multipliers computed in step 6 by the individual cost center statistics in columns 2-5. Enter the resulting amounts in the appropriate columns and corresponding lines of Schedule B.

   (8)  On Schedule B, columns 2-5, enter on line 15 the sum of the amounts computed on lines 1-14. Do not include in these totals, the amounts entered on line A. For each column, the amount on line 15 must equal the amount on line A.

   (9)  On Schedule B, in column 6, enter on each of lines 1-14 the sum of the amounts in columns 1-5.

   (10)  On Schedule B, column 6, line 15, enter the total of lines 1-14. This total plus the amount in column 7, line A, must equal the amount in column 1, line 15.

   (11)  Transfer the amounts on Schedule B, column 6, lines 1-15, to Schedule B-1, column 7, lines 1-15.

   (12)  On Schedule B-1, column 7, line 17, determine the ‘‘Unit Cost Multiplier’’ by dividing the amount in line 16 by the amount in line 15.

   (13)  On Schedule B-1, multiply the ‘‘Unit Cost Multiplier,’’ computed in step 12, by the individual cost center amounts in column 7. Enter the resulting amounts on Schedule B, column 7, lines 1-14. Upon completing the extensions, the total of the amounts computed should be added to verify that the total agrees with the amount in column 7, line A. Enter on line 15, column 7, the verified totals of lines 1-14.

   (14)  On Schedule B, column 8, lines 1-14, enter the sum of columns 6 and 7.

   (15)  On Schedule B, column 8, line 11a, enter the subtotal of lines 1-11. The costs on these lines must be further distributed to the various patient care departments on Schedules C and C-1.

   (16)  On Schedule B, column 8, line 15, enter the total of lines 11a-14. The amount on line 15, column 8, must equal the amount in column 1, line 15.

   (17)  The amounts entered on Schedule B, column 8, lines 1-11a, are transferred to the applicable lines on Schedule C, column 2, lines 1-23.

 Page 6. Worksheet B Cost Apportionment—General Services.

 Page 7. Worksheet B-1 Cost Apportionment—Statistical Basis.

 Worksheets B and B-1 provide for cost finding under the DEPARTMENTAL METHOD of cost apportionment, which incorporates stepdown procedures for the departmental distribution of costs on logical bases to all other departments receiving the services involved.

 Enter on Worksheet B, column 1, the expenses for apportionment forwarded from page 3, Schedule A, each amount in column 7, on lines 1 through 44. Enter on Worksheet B-1, on the first line of the column for each department to be apportioned, the total of the statistical basis for apportionment. The individual statistics should be entered on each appropriate departmental line. The individual statistics entered should be added to verify that the sum agrees with the total entered on the first line of the column. Enter on line 40 of each column, the verified totals of lines 2-39. On line 41 of each column, enter the total costs to be apportioned, brought forward from Worksheet B.

 The ‘‘Unit Cost Multiplier,’’ to be entered on line 42, is determined by dividing the total statistical data, line 40, into the total costs to be apportioned, line 41. This ‘‘Unit Cost Multiplier’’ is the factor used for multiplying the statistical data recorded on the line of each applicable departmental cost center.

 Worksheet B provides for the distribution of departmental costs by the use of the ‘‘Unit Cost Multiplier’’ applied to each line of statistical data on Worksheet B-1. The product of each extension is entered directly on Worksheet B. Upon completing the extensions for each department column, the line items should be added to verify that the total apportioned agrees with the total expenses of the department.

 All the stepped down costs are eventually apportioned to the various patient care and other cost centers. The amounts in columns 4 through 18, for each line (17 through 39) are totaled in the last column (19) on Worksheet B. On Worksheet B, column 19, Line 35a, enter the subtotal of lines 17-35. The costs on these lines must be further distributed to the various patient care departments on Schedules C and C-1. On Worksheet B, column 19, line 40, enter the total of lines 35a-39. The amount on line 40, column 19, must equal the amount in column 1, line 40. The amounts entered on Worksheet B, column 19, lines 17-35a are transferred to the applicable lines on Schedule C, column 1, lines 1-23.

   Page 8. Schedule C Departmental Distribution of Patient Care Costs.

   Page 9. Schedule C-1 Departmental Distribution of Patient Care Charges.

 The allowable costs brought forward for distribution to the various classifi- cations of patient care are entered on Schedule C, column 1, (DEPARTMENTAL METHOD) or column 2 (COMBINATION METHOD). The basis to be used for the distribution is the ratio of charges to charges applied to cost. Percentage ratios for apportionment are developed on Schedule C-1: The total gross charges in each patient care center is related to the gross charges, in that center, for charges to outpatients, hospital inpatients, and ‘‘other’’ patient charges as specified. The ratios developed on Schedule C-1 are applied on Schedule C to apportion the allowable costs in column 1 (DEPARTMENTAL METHOD), or column 2 (COMBINATION METHOD), to the respective patient classification: outpatients, hospital inpatients and ‘‘other’’ patients as specified.

 The following procedures, numbered (1)—(4), will serve as a guide in completing Schedule C-1:

   (1)  Enter in column 1 on the appropriate lines, above the dotted rules, the total gross charges applicable to all patient services.

   (2)  Enter in columns 2 through 4 on the appropriate lines, the portion of the total gross charges in column 1 that is applicable to each patient care classification. The sum of the charges entered in columns 2 through 4 must equal the total charges entered in column 1.

   (3)  Divide the charges entered in each column, 2 through 4 respectively, by the total charges entered in column 1. Enter the resulting percentages below the dotted rule in each of the patient care classifications.

   (4)  For each line, the total of the percentages in columns 2 through 4 must equal 100 percent.

 The percentage ratios developed in the foregoing procedures provide the base for the distribution of the costs of the revenue producing cost centers to the various patient care departments or classifications. Following are the procedures in the apportionment of the allowable costs entered on Schedule C, column 1 (DEPARTMENTAL METHOD) or column 2 (COMBINATION METHOD), to the patient classifications in column 3—Outpatient Costs, column 4—Hospital Inpatient Costs, and column 5—Other Inpatient Costs as specified:

   (1)  Multiply the total expenses in column 1 (or column 2) by each of the percentages developed on Schedule C-1. Enter the resulting amounts in the related columns and lines on Schedule C.

   (2)  After the total patient care costs of each cost center have been distributed enter the totals on lines 3, 8, 22 and 23, as appropriate. The amounts entered in columns 3, 4 and 5, must equal the amounts entered in column 1, or column 2, as applicable.

 Column 6. Total billed hospital inpatient charges. On Schedule C, column 6, lines 1 through 23, list on each line for the service centers indicated, the gross billed charges for hospital inpatient services for all patients of the provider for the period, brought forward from Schedule C-1, column 3, lines 1 through 23.

 Column 7. Medical Assistance hospital inpatient charges. On Schedule C, column 7, list on each line for the service centers indicated, the relevant gross billed charges for covered Medical Assistance Program inpatient services. The amounts listed must be after the exclusion of the patient resources considered in determining the amount of the Medical Assistance payment for the patients’ care. These charges must be supported by summaries and auditable detail records, kept available for examination and verification, of the eligibility of patients and approvals for services and charges. Do not include any charges for inpatients’ Medicare deductibles or coinsurance paid by Medical Assistance.

 Column 8. Average cost per diem—Inpatient routine services.

 GENERAL CARE UNITS, (DEPARTMENTAL METHOD). Divide the total costs in column 4, line 3, by the total inpatient days from page 2, Section II, column 1, line 1. Enter the resulting average cost per diem on Schedule C, column 8, line 3.

 SPECIAL CARE UNITS. (DEPARTMENTAL METHOD). Divide the total costs in column 4, lines 4, 5, 6 and 7—separately, by the total related patient days from page 2, Section II, column 1, lines 2, 3, 4 and 5—separately. Enter the resulting average cost per diem (for each special care unit) on Schedule C, column 8, lines 4, 5, 6, and 7, respectively. (COMBINATION METHOD) Divide the total costs in column 5, line 8, by the total patient days for all special care units from page 2, Section II, column 1, line 6. Enter the resulting average cost per diem (for the aggregate of all special care units) on Schedule C, column 8, line 8.

 Column 8. Ratio of medical assistance charges—Ancillary services.

 (DEPARTMENTAL METHOD). The cost of ancillary services is apportioned to the Medical Assistance Program on the basis of the ratio of covered charges, for ancillary services provided under the Program, applied to the total costs of the ancillary services. The ratio is determined by dividing the covered inpatient charges in column 7 by the total inpatient charges for ancillary services in column 6, on lines 9 through 21. Enter the resulting percentage ratio on the applicable lines, 9 through 21, in column 8. Multiply the hospital inpatient ancillary costs in column 4 by each of the ratios entered in column 8. Enter the resulting amounts on the related lines, 9 through 21, of column 9 Schedule C. Enter on line 22, column 9, the sum of lines 9 through 21. (COMBINATION METHOD) The ratio of covered Medical Assistance inpatient charges for all ancillary services to total patient charges for such services is applied to the total cost of all ancillary services. The ratio is determined by dividing the covered inpatient charges in Schedule C, column 7, line 22, by the total inpatient charges for ancillary services in column 6, line 22. Enter the resulting percentage ratio in column 8, line 22. Multiply the hospital inpatient ancillary costs in column 4, line 22, by the ratio entered in column 8, line 22. Enter the resulting cost of ancillary services apportioned to the Program on Schedule C, column 10, line 22.

   Page 10. Schedule D—Balance Sheet.

 Schedules of the assets, liabilities, and principal accounts comprising the provider’s organization are required. Items making up the various special purpose or temporary funds should be included with the current (general) fund. Reconcile the current surplus balance by identifying the changes where indicated, or on a separate schedule if additional space is required. The amount shown for ‘‘net income (loss) for period’’ should be the same as that entered on Statement of Income and Expense, page 11, line 37; explain any differences.

   Page 11. Statement of Income and Expense.

 This statement providing the summary of income or (loss) is required for the period covered. Information for listing the operating expenses in the ‘‘natural classification’’ may not be directly at hand from the provider’s records. The data can be readily assembled by scheduling the expenses, in the natural classification sequence, by each cost center. The resulting summary can then be transferred to the statement in the natural classification required. The total of the operating expenses, line 18, should agree with the trial balance of expenses on page 3, column 3, line 44.

APPENDIX A

FORM AG12 CD

 Financial Report to the Commonwealth of Pennsylvania, Remembursable Cost of Hospital Services under the Medical Assistance Program.

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