SOCIAL AND HEALTH SERVICES
(Division of Developmental Disabilities)
Date of Adoption: April 20, 2001.
Purpose: The proposed rules regulate the purchase and provision of intermediate care facility for the mentally retarded (ICF/MR) services by CSGS to persons who are eligible for service. The proposed rules are the result of division review and updating rules according to Executive Order 97-02.
These rules were formerly chapter 275-38 WAC. They were migrated into chapter 388-835 WAC as part of the effort to move all DSHS WAC into one title. Now they have been reorganized, rewritten and are being adopted as new sections in chapter 388-835 WAC, ICF/MR program and reimbursement system.
Citation of Existing Rules Affected by this Order: Repealing WAC 388-835-010, 388-835-015, 388-835-020, 388-835-025, 388-835-030, 388-835-035, 388-835-040, 388-835-045, 388-835-050, 388-835-055, 388-835-060, 388-835-065, 388-835-070, 388-835-075, 388-835-080, 388-835-085, 388-835-090, 388-835-095, 388-835-100, 388-835-105, 388-835-110, 388-835-115, 388-835-120, 388-835-125, 388-835-130, 388-835-135, 388-835-140, 388-835-145, 388-835-150, 388-835-155, 388-835-160, 388-835-165, 388-835-170, 388-835-175, 388-835-180, 388-835-185, 388-835-190, 388-835-195, 388-835-200, 388-835-205, 388-835-210, 388-835-215, 388-835-220, 388-835-225, 388-835-230, 388-835-235, 388-835-240, 388-835-245, 388-835-250, 388-835-255, 388-835-260, 388-835-265, 388-835-270, 388-835-275, 388-835-280, 388-835-285, 388-835-290, 388-835-295, 388-835-300, 388-835-305, 388-835-310, 388-835-315, 388-835-320, 388-835-325, 388-835-330, 388-835-335, 388-835-340, 388-835-345, 388-835-350, 388-835-355, 388-835-360, 388-835-365, 388-835-370, 388-835-375, 388-835-380, 388-835-385, 388-835-390, 388-835-395, 388-835-400, 388-835-405, 388-835-410, 388-835-415, 388-835-420, 388-835-425, 388-835-430, 388-835-435, 388-835-440, 388-835-445, 388-835-450, 388-835-455, 388-835-460, 388-835-465, 388-835-470, 388-835-475, 388-835-480, 388-835-485, 388-835-490, 388-835-495, 388-835-500, 388-835-505, 388-835-510, 388-835-520, 388-835-525, 388-835-530, 388-835-535, 388-835-540, 388-835-550, 388-835-555, 388-835-560, and 388-835-565.
Statutory Authority for Adoption: RCW 71A.20.140.
Adopted under notice filed as WSR 00-23-108 on November 21, 2000.
Changes Other than Editing from Proposed to Adopted Version: In Definitions, made the following changes:
"Facility" means a residential setting certified, according
to federal regulations, as an ICF/MR by the department. A state
either a state-owned and operated residential living
center or a state operated living alternative (SOLA). A private
facility is a residential setting licensed as a nursing home
under chapter 18.51 RCW or a boarding home licensed under chapter 18.20 RCW.
"Funded capacity," for a state facility, is the number of
beds on file with the office of financial management
on the first
day of each biennium that are available for use during each
fiscal year of the biennium.
home facility" means a home, place, or institution,
licensed or certified according to chapter 18.51 RCW , where
skilled nursing, intermediate care, and ICF/MR services are
Replace twenty-eight days with thirty days in the following section - subsections:
WAC 388-835-0055 (1), (2)(b), (2)(c); 388-835-0060 (1), (3); 388-835-0010 (1), (2); 388-835-0120(4); 388-835-0130 (1), (2)(c); 388-835-0135 (1), (3); 388-835-0885(1); 388-835-0900(1); 388-835-0910(1); 388-835-0945; and 388-835-0950.
Make the following changes/corrections:
WAC 388-835-0085 Why is an individual transferred or discharged? An individual admitted to a facility can be transferred or discharged only for:
(1) Medical reasons;
(2) A change in the individual's habilitation needs;
2) The individual's welfare;
3) The welfare of other residents; or
4) At the request of the resident or legal guardian.
WAC 388-835-0115 Can a facility request that an individual be transferred? Facilities can request that a resident be transferred for the following reasons:
(1) Medical reasons;
(2) A change in the individual's habilitation needs;
2) The individual's welfare;
3) The welfare of the other residents; or
4) Nonpayment for services provided to the resident
during the resident's stay at the facility.
WAC 388-835-0890 What disputes cannot be resolved through
the administrative review and fair hearing processes? DSHS'
administrative review and fair hearing processes cannot be used
the adequacy of any prospective or settlement
reimbursement rate or rate component, either individually or
collectively; (2) Audit actions or adjustment conducted under the federal
Boren Amendment payment standard contained in federal regulations
at 42 USC 1396a (a)(13)(A); or
(3) DSHS's efforts to comply with the Boren standard.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 190, Amended 0, Repealed 112. Effective Date of Rule: Thirty-one days after filing.
April 16, 2001
Brian H. Lindgren, Manager
Rules and Policies Assistance Unit2855.7PURPOSE
(a) Regulate the purchase and provision of services in intermediate care facility for the mentally retarded (ICF/MR); and
(b) Assure adequate ICF/MR care, service, and protection are provided through licensing and certification procedures; and
(c) Establish standards for providing habilitative training, health-related care, supervision, and residential services to eligible persons.
(2) Except where specifically referenced, this chapter supersedes and replaces any and all sections affecting ICF/MR facilities or programs contained in chapter 388-96 WAC.
"Accrual method of accounting" is a method of accounting where:
(1) Revenues are reported when they are earned, regardless of when they are collected; and
(2) Expenses are reported when they are incurred, regardless of when they are paid.
"Active treatment," as used in this chapter, is defined in 42 CFR 483.440(a) and includes implementation of an individual program plan for each resident as outlined in 42 CFR 483.440 (c) through (f).
"Administration and management" means activities used to maintain, control, and evaluate an organization's use of resources while pursuing its goals, objectives and policies.
"Admission" means entering a state-certified facility and being authorized to receive services from it.
"Allowable costs" are documented costs that:
(1) Are necessary, ordinary, and related to providing ICF/MR services to ICF/MR residents; and
(2) Not expressly declared "nonallowable" by applicable statutes or regulations.
"Appraisal" is a process performed by a professional person either designated by the American Institute of Real Estate Appraisers as a member, appraisal institute (MAI), or by the Society of Real Estate Appraisers as a senior real estate analyst (SREA) or a senior real property appraiser (SRPA). The appraisal process is used to establish the fair market value of an asset or to reconstruct the historical cost of an asset that was acquired in a past period. The appraisal process includes recording and analyzing property facts, rights, investments and values based on a personal inspection and a property inventory.
"Arm's-length transaction" is a transaction resulting from good faith bargaining between a buyer and seller who hold adverse positions in the market place. Arm's-length transactions are presumed to be objective transactions. A sale or exchange of ICF/MR or nursing home facilities among two or more parties where all parties continue to own one or more of the facilities involved in the transaction is not considered an arm's-length transactions. The sale of an ICF/MR facility that is subsequently leased back to the seller within five years of the date of sale is not considered an arm's-length transaction for purposes of chapter 388-835 WAC.
"Assets" are economic resources of the provider, recognized, and measured in conformity with generally accepted accounting principles. Assets also include deferred charges that are recognized and measured according to generally accepted accounting principles. (The value of assets acquired in a change of ownership transaction entered into after September 30, 1984, cannot exceed the acquisition cost of the owner of record as of July 18, 1984.)
"Bad debts" or "uncollectable accounts" are amounts considered uncollectable from accounts and notes receivable. Generally accepted accounting principles must be followed when accounting for bad debts.
"Beds," unless otherwise specified, means the number of set-up beds in an ICF/MR facility. The number of set-up beds cannot exceed the number of licensed beds for the facility.
"Beneficial owner": For a definition, see WAC 388-835-0015.
"Boarding home" means any home or other institution licensed according to the requirements of chapter 18.20 RCW.
"Capitalization" means recording expenditures as assets.
"Capitalized lease" is a lease that is recorded, according to generally accepted accounting principles, as an asset with an associated liability.
"Cash method of accounting" is a method of accounting where revenues are recorded only when cash is received and expenses are not recorded until cash is paid.
"Change of ownership," see WAC 388-835-0020.
"Charity allowances" are reductions in a provider's charges because of the indigence or medical indigence of a resident.
"Consent" means the process of obtaining a person's permission before initiating procedures or actions against that person.
"Contract" means a contract between the department and a provider for the delivery of ICF/MR services to eligible Medicaid recipients.
"Provider" means an entity contracting with the department to deliver ICF/MR services to eligible Medicaid recipients.
"Courtesy allowances" are reductions in charges to physicians, clergy, and others for services received from a provider. Employee fringe benefits are not considered courtesy allowances.
"Custody" means the immediate physical confinement, sheltering and supervision of a person in order to provide them with care and protect their welfare.
"DDD" means the division of developmental disabilities of the department.
"Department" means the department of social and health services (DSHS) and its employees.
"Depreciation" is the systematic distribution of the cost (or depreciable base) of a tangible asset over its estimated useful life.
"Discharge" means the process that takes place when:
(1) A resident leaves a residential facility; and
(2) The facility relinquishes any responsibility it acquired when the resident was admitted.
"Donated asset" is an asset given to a provider without any payment in cash, property, or services. An asset is not considered donated if the provider makes a nominal payment when acquiring it. An asset purchased using donated funds is not a donated asset.
"Entity" means an individual, partnership, corporation, public institution established by law, or any other association of individuals, capable of entering into enforceable contracts.
"Equity capital" is the total tangible and other assets that are necessary, ordinary, and related to resident care listed on a provider's most recent cost report minus the total related long-term debt from the same cost report plus working capital as defined in this section.
"Exemption" means a department approved written request asking for an exception to a rule in this chapter.
"Facility" means a residential setting certified, according to federal regulations, as an ICF/MR by the department. A state facility is a state-owned and operated residential living center. A private facility is a residential setting licensed as a nursing home under chapter 18.51 RCW or a boarding home licensed under chapter 18.20 RCW.
"Fair market value" is the purchase price of an asset resulting from an arm's-length transaction between a well-informed buyer and seller, neither being under any compulsion to buy or sell.
"Financial statements" are statements prepared and presented according to generally accepted accounting principles and practice and the requirements of this chapter. Financial statements and their related notes include, but are not limited to, balance sheet, statement of operations, and statement of change in financial position.
"Fiscal year" is the operating or business year of a provider. Providers report on the basis of a twelve-month fiscal year, but this chapter allows reports covering abbreviated fiscal periods.
"Funded capacity," for a state facility, is the number of beds on file with the office of financial management.
"Generally accepted accounting principles" are the accounting principles currently approved by the financial accounting standard board (FASB).
"Generally accepted auditing standards" are the auditing standards currently approved by the American Institute of Certified Public Accountants (AICPA).
"Goodwill" is the excess of the purchase price of a business over the fair market value of all identifiable, tangible, and intangible assets acquired. "Goodwill" also means the excess of the price paid for an asset over fair market value.
"Habilitative services" means those services required by an individual habilitation plan.
"Harmful" is when an individual is at immediate risk of serious bodily harm.
"Historical cost" is the actual cost incurred in acquiring and preparing an asset for use, including feasibility studies, architects' fees, and engineering studies.
"Imprest fund" is a fund:
(1) Regularly replenished for the amounts expended from it; and
(2) The cash in the fund and the receipts for expenditures should always equal a predetermined amount.
(3) An example of an imprest fund is a petty cash fund.
"ICF/MR" means a facility certified by Title XIX as an intermediate care facility for providing services to persons with mental retardation or related conditions.
"Interest" is the cost incurred for the use of borrowed funds, generally paid at fixed intervals by the borrower.
"Joint facility costs" are any expenses incurred that benefit more than one facility or a facility and any other entity.
"Lease agreement" is a contract for a specified period of time between two parties regarding the possession and use of real or personal property and/or assets in exchange for specified periodic payments.
"Medicaid program" means either the state medical assistance program provided under RCW 74.09.500 or authorized state medical services.
"Medical assistance recipient" is an individual that the department declares eligible for medical assistance services provided in chapter 74.09 RCW.
"Modified accrual method of accounting" is a method of accounting that records revenues only when cash is received and records expenses when they are incurred, regardless of when they are paid.
"Net book value" is the historical cost of an asset less its accumulated depreciation.
"Nonallowable costs" are costs that are not documented, necessary, ordinary and related to providing services to residents.
"Nonrestricted funds" are donated funds not restricted to a specific use by the donor. General operating funds are an example of nonrestricted funds.
"Nursing facility" means a home, place, or institution, licensed or certified according to chapter 18.51 RCW.
"Operating lease" is a lease, according to generally accepted accounting principles, that requires rental or lease payments to be charged to current expenses when they are incurred.
"Ordinary costs" are costs that, by their nature and magnitude, a prudent and cost conscious management would pay.
"Owner" means a sole proprietor, general or limited partner, or beneficial interest holder of at least five percent of a corporation's outstanding stock.
"Ownership interest" means all beneficial interests owned by a person (calculated in the aggregate) regardless of the form such beneficial ownership takes. Also, see WAC 388-835-0015.
"Per diem costs" or "per resident day costs" are total allowable costs for a fiscal period divided by total resident days for that same period.
"Prospective daily payment rate" is the daily amount the department assigns to each provider for providing services to ICF/MR residents. The rate is used to compute the department's maximum participation in the provider's cost.
"Qualified mental retardation professional (QMRP)" means QMRP as defined under 42 CFR 483.430(a).
"Qualified therapist," see WAC 388-835-0030.
"Regression analysis" is a statistical technique used to analyze the relationship between a dependent or criterion variable and a set of independent or predictor variables.
"Regional services" are the services of a local office of the division of developmental disabilities.
"Related organization" is an entity that either controls another entity or is controlled by another entity or provider. Control results from common ownership or the ability to exercise significant influence on the other entity's activities. Control occurs when an entity or provider has:
(1) At least a five percent ownership interest in the other entity; or
(2) The ability to influence the activities of the other.
"Relative" means spouse; natural parent, child, or sibling; adopted child or adoptive parent; stepparent, stepchild, stepbrother, stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law; grandparent or grandchild; uncle, aunt, nephew, niece, or cousin.
"Resident" or "person" means a person the division determines is, under RCW 71A.16.040 eligible for division-funded services.
"Resident day" means a calendar day of resident care. When computing calendar days of resident care, the day of admission is always counted. The day of discharge is counted only when discharge and admission occur on the same day. For the purpose of this definition, a person is considered admitted when they are assigned a bed and a resident record is opened for them.
"Resident care and training staff" are staff whose primary responsibility is the care and development of the residents, including:
(1) Resident activity program;
(2) Domiciliary services; and
(3) Habilitative services under the supervision of a QMRP.
"Restricted fund" is a fund where the donor restricts the use of the fund principal or income to a specific purpose. Restricted funds generally fall into one of three categories:
(1) Funds restricted to specific operating purposes; or
(2) Funds restricted to additions of property, plant, and equipment; or
(3) Endowment funds.
"RHC" - Residential habilitation center. A facility owned and operated by the state and is certified as an ICF/MR or a nursing facility.
"Secretary" means the secretary of DSHS.
"Start-up costs" are the one-time costs incurred from the time preparations begin on a newly constructed or purchased building until the first resident is admitted. Such "pre-opening" costs include, but are not limited to, administrative and nursing salaries, utility costs, taxes, insurance, repairs and maintenance, and training costs. Start-up costs do not include expenditures for capital assets.
"Superintendent" means the superintendent of a residential habilitation center (RHC) or the superintendent's designee.
"Title XIX" means the 1965 amendments to the Social Security Act, P.L. 89-07, as amended.
"Uniform chart of accounts" means a list of department established account titles and related code numbers that providers must use when reporting costs.
"Vendor number" or "provider number" is a number assigned by the department to each provider who delivers ICF/MR services to ICF/MR Medicaid recipients.
"Working capital" is the difference between the total current assets that are necessary, ordinary, and related to resident care, as reported in a provider's most recent cost report, and the total current liabilities necessary, ordinary, and related to resident care reported in the same cost report.
(1) Has or shares, by contract, arrangement, understanding, relationship, or otherwise, the power to:
(a) Vote or direct the voting of an ownership interest; and/or
(b) Invest, including the power to dispose of or direct the disposition of an ownership interest.
(2) Creates or uses a trust, proxy, power of attorney, pooling arrangement, or any other contract, arrangement, or device to divest a beneficial owner of their ownership or prevent the vesting of their ownership in order to evade the reporting requirements of this chapter;
(3) Has the right to acquire a beneficial ownership interest within sixty days of one of the following occurring:
(a) Exercising any option, warrant, or right;
(b) Converting an ownership interest;
(c) Revoking a trust, discretionary account, or similar arrangement; or
(d) Automatically terminating a trust, discretionary account, or similar arrangement.
(e) Any person acquiring an ownership interest by exercising (a), (b) or (c) of this subsection must be deemed the beneficial owner of that interest.
(4) In the ordinary course of business, according to a written pledge agreement, becomes a pledge of an ownership interest. A pledge must not be deemed the beneficial owner of a pledged ownership interest except when all of the following conditions are met:
(a) The pledge must follow all the steps in the pledge agreement and:
(i) Declare a default and determine the power to vote;
(ii) Direct the vote; or
(iii) Dispose of the pledged ownership interest; or
(iv) Direct how the disposition of the pledged ownership interest will take place.
(b) The agreement must:
(i) Be bona fide;
(ii) Not change or influence a provider's control; and
(iii) Not be related to any transaction attempting to change or influence a provider's control.
(c) The agreement, before default, cannot grant the pledge the power to:
(i) Vote or direct the vote of the pledged ownership interest; or
(ii) Dispose or direct the disposition of the pledged ownership interest except where credit is extended and the pledge is a broker or dealer.
(2) Types of events causing a change in ownership include but are not limited to:
(a) Changing the form of legal organization of the owner, such as a sole proprietorship becomes a partnership or corporation;
(b) Transferring the title to the ICF/MR enterprise from the provider to another party;
(c) Leasing the ICF/MR facility to another party or an existing lease is terminated;
(d) When the provider is a partnership, any event that dissolves the partnership;
(e) When the provider is a corporation and the corporation:
(i) Is dissolved;
(ii) Merges with another corporation which is the survivor; or
(iii) Consolidates with one or more other corporations to form a new corporation.
(3) Ownership does not change when:
(a) The provider contracts with another party to manage the facility and act as the provider's agent subject to the provider's general approval of daily operating decisions; or
(b) When the provider is a corporation, some or all of its corporate stock is transferred.
(a) Eliminating or adding parties to the agreement;
(b) Expiration of the agreement;
(c) Modifying of any lease term in the agreement;
(d) Terminating the agreement by any means by either party; or
(e) Extending or renewing the agreement, even if done according to its renewal provision, creates a new agreement and effectively terminates the old one.
(2) A strictly formal change in a lease agreement modifying the method, frequency, or manner in which lease payments are made without increasing the total payment obligation of the lessee is not considered a modification of the lease terms.
(1) An activity specialist who has department specified specialized education, training, or experience;
(2) An audiologist eligible for a certificate of clinical competency in audiology or possessing the equivalent education and clinical experience;
(3) A dental hygienist defined, licensed and regulated by chapter 18.29 RCW;
(4) A dietitian either:
(a) Eligible for registration by the American Dietetic Association under requirements in effect on January 17, 1974; or
(b) With a baccalaureate degree whose major studies covered food and nutrition, dietetics, or food service management; plus one year supervisory experience in the dietetic service of a health care institution; and annual participation in continuing dietetic education;
(5) An occupational therapist who graduated from a program in occupational therapy or who possesses the equivalent of such education or training and meets all Washington state legal requirements;
(6) A pharmacist who is licensed by the Washington state board of pharmacy to engage in the practice of pharmacy;
(7) A physical therapist, meaning someone practicing physical therapy as defined in RCW 18.74.010(3). Physical therapist does not include massage operators as defined in RCW 18.108.010;
(8) A physician as defined, licensed and regulated by chapter 18.71 RCW or an osteopathic physician as defined, licensed and regulated by chapter 18.57 RCW;
(9) A psychologist as defined, licensed and regulated by chapter 18.83 RCW;
(10) A qualified mental retardation professional;
(11) A registered nurse as defined by chapter 18.88A RCW;
(12) A social worker who is a graduate of a school of social work; or
(13) A speech pathologist either:
(a) Eligible for a certificate of clinical competence in speech pathology; or
(b) Possessing the equivalent education and clinical experience.
(a) Assessment of the request concludes that the exemption will not undermine the legislative intent of Title 71A RCW, Developmental disabilities; and
(b) Evaluation of the request shows that the exemption will not adversely effect the quality of service, supervision, health, and safety of department-served persons.
(2) Agencies and individual providers must retain a copy of each department-approved exemption.
(3) Actions regarding exemption requests are not subject to appeal.
(1) The division will recognize only the official name of an ICF/MR as shown on the license.
(2) All state and private ICF/MR facilities must be certified as a Title XIX IMR ICF/MR facility.
(3) All private ICF/MR facilities with a certified capacity of at least sixteen beds must be licensed as a nursing home under chapter 18.51 RCW, Nursing homes.
(4) All private ICF/MR facilities with a certified capacity of less than sixteen beds must be licensed as a boarding home for the aged under chapter 18.20 RCW.
(5) All facilities certified to provide ICF/MR services must comply with all applicable Title XIX, Section 1905 of the Social Security Act 42 U.S.C federal regulations as amended. In addition, all private-operated facilities must comply with state regulation governing the licensing of nursing homes or boarding homes for the aged and any other relevant state regulations.
(6) All certified facilities must only admit persons with developmental disabilities as residents.
(7) State facilities may not exceed funded capacity unless authorized by the secretary to do so (see RCW 71A.20.090).
Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
WAC 388-835-0045 What are the minimum staff requirements for an ICF/MR facility? All ICF/MR facilities must provide sufficient number of qualified staff to meet the needs of their residents.
(a) Health care and habilitative training needs of an individual are identified and met according to state and federal regulations.
(b) Individual is placed in a facility certified as capable of meeting their needs.
(2) DDD regional service staff is responsible for authorizing changes in residential services.
(3) All services provided must be essential to the resident's habilitation and health care needs and to achieving the primary goal of attaining the highest level of independence possible for each individual resident.
(4) A resident in an ICF/MR is eligible for community residential services when such services meet their needs.
(5) Every ICF/MR must provide habilitative training and health care that at least includes the following:
(a) Active treatment;
(b) Services according to the identified needs of the individual resident and provided by or under the supervision of qualified therapists;
(c) Routine items and supplies provided uniformly to all residents;
(d) Providing necessary surgical appliances, prosthetic devices, and aids to mobility for the exclusive use of individual residents;
(e) Nonreusable supplies not usually provided to all residents may be individually ordered. A department representative must authorize requests for such supplies.
(6) Each ICF/MR facility is responsible for providing transportation for residents. This responsibility may include the guarantee of a resident's use of public transportation.
(2) The re-determination notice must include:
(a) The reasons for the proposed eligibility change;
(b) A statement that the resident or any other individual designated by the resident has a right to a conference with a DDD representative within thirty days of receipt of the notice;
(c) A statement that the resident has the right to request a hearing to contest the department's decision within thirty days of the notice;
(d) Information as to how a hearing can be requested;
(e) A statement that the resident has the right to be represented at the hearing by an authorized representative; and
(f) Information regarding the availability and location of legal services within the resident's community.
(1) If the resident requests a hearing within the thirty-day time period, DSHS must not re-determine eligibility until a hearing decision is reached or appeal rights have been exhausted unless re-determination is warranted by the resident's health or safety needs.
(2) If the secretary or the secretary's designee concludes that re-determination is not appropriate, no further action will be taken to re-determine eligibility unless there is a change in the situation or circumstances. If there is a change in the situation or circumstances, the request may be resubmitted.
(3) If the secretary or the secretary's designee affirms the decision to change the resident's eligibility and no judicial review is filed within thirty days of the receipt of notice of re-determination, the department must proceed with the planned action.
(4) If the secretary or secretary's designee affirms the decision to change the resident's eligibility and a request for judicial review has been filed, any proposed re-determination must be delayed until the appeal process is complete unless a delay jeopardizes the resident's health or safety.
(1) Termination of the facility's contract;
(2) De-certification of the facility;
(3) Nonrenewal of the facility's contract;
(4) Revocation of the facility's license; or
(5) An emergency suspension of the facility's license.
PLACEMENT -- TRANSFER -- RELOCATION -- DISCHARGE
(2) A facility may not admit an individual who requires services the facility cannot provide.
(3) Department representatives must determine an individual's eligibility for ICF/MR services before payment can be approved.
(2) "Transferred between facilities" means transferred from:
(a) An ICF/MR to ICF/MR;
(b) An ICF/MR to a hospital;
(c) A hospital to an ICF/MR; or
(d) An ICF/MR or hospital to alternative community placement.
(2) Upon receipt of a notice of closure, the department must stop referring individuals to the facility and begin the orderly transfer of its residents.
(1) Medical reasons;
(2) A change in the individual's habilitation needs;
(3) The individual's welfare;
(4) The welfare of other residents; or
(5) At the request of the resident or legal guardian.
(1) An assessment of the resident in consultation with the service provider and the parent or guardian; and
(2) A review of the relevant records.
(2) These plans must:
(a) Identify the location of available facilities that provide services appropriate and consistent with the resident's needs;
(b) Provide for coordination between the staffs of the old and new agencies;
(c) Allow for a pre-transfer visit, when the resident's condition permits, to the new facility, so the resident can become familiar with the new surroundings and residents;
(d) Encourage active participation by the resident's guardian or family in the transfer preparation;
(e) Facilitate discussions between the staffs of the old and new facilities regarding expectations;
(f) Provide opportunities for consultations on request between the two staffs; and
(g) Require follow-up by DDD to monitor the effects of the transfer.
(1) The services provided to an individual do not meet their needs;
(2) A facility's ICF/MR certification or license is revoked or suspended;
(3) Medical reasons dictate relocation;
(4) A resident's welfare would be improved;
(5) The welfare of the other residents would be enhanced;
(6) There is no payment for services provided to the resident during their stay at the facility; or
(7) The resident and/or guardian make a formal request.
(2) The department may enforce immediate movement of a resident from an ICF/MR facility when the facility's ICF/MR certification or license is revoked or suspended.
(3) The department must notify a resident and their guardian, next of kin, or responsible party, in writing, when:
(a) DSHS or Health Care Financing Administration (HCFA) determines a facility no longer meets certification requirements as an ICF/MR;
(b) DSHS determines the facility does not meet contract requirements; or
(c) A facility voluntarily terminates their contract with DSHS or stops participating in the ICF/MR program.
(2) If there is a serious and immediate threat to the resident's health or safety, DSHS is not required to give the resident and their guardian, next of kin, or responsible party thirty days notice of it's intent to transfer the resident.
(1) Medical reasons;
(2) A change in the individual's habilitation needs;
(3) The individual's welfare;
(4) The welfare of the other residents; or
(5) Nonpayment for services provided to the resident during the resident's stay at the facility.
(1) The facility must send their request to the department in writing. The request must explain why the relocation is necessary and document that the interdisciplinary team responsible for developing the resident's habilitation plans agrees with the request.
(2) DSHS must approve or deny the request within fifteen working days of receiving it. The department's decision must be based upon:
(a) An on-site visit with the resident; and
(b) A review of the resident's records.
(3) The facility administrator must be informed of the department's decision.
(4) If the facility's request is approved, the department must give the resident and their guardian, next of kin, or responsible party thirty days notice, in writing, of it's intent to transfer the resident.
(a) Request a transfer; and
(b) Select where they wish to move.
(2) If the resident's selection is available and appropriate to their habilitation and health care needs, the department must make all reasonable attempts to accomplish transfer.
(3) If the selection is neither appropriate nor available, the resident may make another selection.
(4) All requests by the resident or their guardian must be in writing.
(5) DDD is solely responsible for arranging the resident's transfer.
(2) The transfer notice must include:
(a) The reasons supporting the proposed transfer;
(b) A statement that the resident or any other individual designated by the resident has a right to a conference with a DDD representative within twenty-eight days of receipt of the notice;
(c) A statement that the resident has the right to request a hearing to contest the department's decision within thirty days of the notice;
(d) Information as to how a hearing can be requested;
(e) A statement that the resident has the right to be represented at the hearing by an authorized representative; and
(f) Information regarding the availability and location of legal services within the resident's community.
(1) If the resident requests a hearing within the thirty-day time period, DSHS must not transfer the resident until a hearing decision is reached or appeal rights have been exhausted unless the transfer is warranted by the resident's health or safety needs or the welfare of the other residents.
(2) If the secretary or the secretary's designee concludes that the transfer is not appropriate, no further action is to be taken to transfer unless there is a change in the situation or circumstances surrounding the transfer request. If there is a change in the situation or circumstances, the request may be resubmitted.
(3) If the secretary or the secretary's designee affirms the decision to transfer the resident and no judicial review is filed within thirty days of the receipt of notice of transfer, DSHS must proceed with the planned action.
(4) If the secretary or secretary's designee affirms the decision to transfer the resident and a request for judicial review has been filed, any proposed transfer must be delayed until the appeal process is complete unless a delay jeopardizes the resident's health or safety or the welfare of other residents.
(1) Termination of the facility's contract;
(2) De-certification of the facility;
(3) Nonrenewal of the facility's contract;
(4) Revocation of the facility's license; or
(5) An emergency suspension of the facility's license.
DISCHARGE/READMISSION AND INCIDENT REPORTING
SOCIAL LEAVE FOR ICF/MR RESIDENTS
(2) Any facility vacancies resulting from a resident's social leave will be reimbursed if the leave complies with the individual habilitation plan and the following conditions:
(a) The facility must notify the DDD director or their designee of all social leaves exceeding fifty-three hours.
(b) All social leaves exceeding seven consecutive days must receive prior written approval from the DDD director or their designee.
(c) The DDD director or their designee must give written approval before a resident can accumulate more than seventeen days of social leave per year.
SUPERINTENDENT'S AUTHORITY TO DETAIN A RESIDENT
(2) If the superintendent concludes that the discharge is harmful, they may detain the resident for up to forty-eight hours until the harm passes. The superintendent may also refer the resident to a mental health professional as defined in RCW 71.05.150.
(3) At the end of the forty-eight hour detention period, the superintendent must release the resident.
(4) If, within six months, the superintendent detains the resident a second time, they must refer the resident to a mental health professional within eight hours of the second detention. During this second detention, the resident may only be held until the mental health professional:
(a) Investigates and evaluates the specific facts surrounding the situation; and
(b) Determines if further detention is necessary (see RCW 71.05.150).
(5) Nothing in this section prevents a superintendent or their designee from allowing a resident to leave the RHC for specified periods necessary for their habilitation or care.
(2) If the resident's legal representative is not available, the superintendent must also notify one or more of the following persons in the order of priority listed:
(a) A parent of the resident;
(b) Other persons of close kinship relationship to the resident;
(c) The Washington protection and advocacy agency for the rights of a person with a developmental disability, appointed in compliance with 42 USC section 6042; or
(d) A person, who is not a DSHS employee or an ICF/MR but who, in the superintendent's opinion, is concerned with the resident's welfare.
(3) Nothing in this section prevents a superintendent from notifying:
(a) A mental health professional;
(b) Local law enforcement;
(c) Adult protective services;
(d) Child protective services;
(e) Other agencies as appropriate; or
(f) Director, division of developmental disabilities, or designee.
(2) Whenever DSHS suspends referrals it must notify the facility immediately, in writing, and give the reasons for its action.
(3) The suspension may continue until DSHS determines that the circumstances leading to it have been corrected.
(2) When a contract is terminated, the provider must submit final reports to DSHS according to the requirements of WAC 388-835-124.
(3) When notified of a contract termination, DSHS must determine, by preliminary or final settlement calculations, the amount of any overpayments made to the provider, including overpayments disputed by the provider. If preliminary or final settlements are not available for any periods before the termination date of the contract, DSHS must use available relevant information to make a reasonable estimate of any overpayments or underpayments.
(4) The provider must file a properly completed final cost report (see the requirements in WAC 388-835-0225, 388-835-0230, and 388-835-0235). This report may be audited by DSHS. A final settlement must be determined within ninety days after the audit process is completed (including any administrative review of the audit requested by the provider) or within twelve months of the termination of the contract if an audit is not performed.
(2) Instead of withholding payments, DSHS may allow a provider to offer security equal to the determined and/or estimated overpayments even when the overpayments are being disputed in good faith. Types of security acceptable to DSHS are:
(a) A surety bond issued by a bonding company acceptable to DSHS;
(b) An assignment of funds to DSHS;
(c) Collateral acceptable to DSHS;
(d) A purchaser's assumption of liability for the provider's overpayment; or
(e) Any combination of (a) through (d) of this subsection.
(3) DSHS must release any payments withheld if a provider gives acceptable security equal to the determined and/or estimated overpayments.
(2) If the provider disagrees with the settlement and does not repay any overpayments owed, DSHS must retain security equal to the amount of the disputed overpayments until the administrative appeal process is completed.
(3) If the total of withheld payments, bonds, and assignments is less than the total of the determined and/or estimated overpayments, the unsecured portion of the overpayments is a debt owed to the state of Washington. This debt becomes a lien against the provider's real and personal property when DSHS files with the auditor in the county where the provider resides or owns property. This lien has preference over all unsecured creditor claims against the provider.
(4) If the total existing overpayments exceed the value of the security held by DSHS, DSHS may use whatever legal means are available to recover the difference.
(1) At least equal in amount to the determined and/or estimated overpayments minus any withheld payments even if the overpayments are the subject of a good faith dispute;
(2) Issued or accepted by a bonding company or financial institution licensed to transact business in Washington state;
(3) For a term sufficient to cover the time period needed to determine a final settlement and exhaust administrative and judicial remedies;
(4) Forfeited to DSHS if the term proves insufficient and the bond or assignment is not renewed for an amount equal to any remaining overpayment in dispute;
(5) Paid to DSHS if a properly completed final cost report is not filed by the provider or if financial records supporting this report are not retained and available to the auditor; and
(6) Paid to DSHS if the provider does not pay the refund owed within sixty days following receipt of a written demand to do so or the conclusion of any administrative or judicial proceedings held to settle the dispute.
(2) If the new provider plans to participate in the cost related reimbursement system, they must meet the conditions specified in WAC 388-835-0215 and submit the projected budget required in WAC 388-835-0220. The new owner's CF/MR contract is effective on the date ownership changes.
(3) When a contract is terminated, the provider must reverse any accumulated liabilities assumed by a new owner against the appropriate accounts.
PROSPECTIVE COST RELATED REIMBURSEMENT SYSTEM
(1) Obtain a state certificate of need as required by chapter 70.38 RCW, Health planning and development;
(2) Possess a current license to operate an appropriate facility (e.g., nursing home, boarding home);
(3) Be currently certified under Title XIX to provide ICF/MR services;
(4) Hold a current contract to provide ICF/MR services and comply with all of its provisions; and
(5) Comply with all applicable federal and state regulations, including the requirements of this chapter.
(2) The projected budget must cover the twelve months immediately following the date the provider will enter the program.
(3) The projected budget must:
(a) Be prepared according to DSHS instructions;
(b) Be completed on the forms provided by DSHS; and
(c) Include all earnest money, purchase, and lease agreements involved in the change of ownership transaction.
(4) A new provider must also clearly identify, in their projected budget, all individuals and organizations having a beneficial ownership interest in the:
(a) Current operating entity;
(b) Land, building, or equipment used by the facility; and
(c) Purchasing or leasing entity.
(5) For purposes of this section, a "new provider" is one:
(a) Operating a new facility;
(b) Acquiring or assuming responsibility for operating an existing facility; or
(c) Obtaining a certificate of need approval due to an addition to or renovation of a facility.
FILING COST REPORTS
(2) All providers must complete reports according to the instructions provided by DSHS. If no specific instruction covers a particular situation, generally accepted accounting principles must be followed.
(3) All providers must use the accrual method of accounting, except for governmental institutions operated on a modified accrual basis.
(4) All revenue and expense accruals not received or paid within one hundred twenty days after the accrual is made must be reversed against the appropriate accounts, unless special circumstances are documented that justify continuing to carry all or part of the accrual (e.g., contested billings). Accruals for vacation pay, holiday pay, sick pay and taxes may be carried for longer periods if it is the provider's usual policy to do so and generally accepted accounting principles are followed.
(5) Methods of allocating costs, including indirect and overhead costs, must be consistently applied. Providers operating multi-service facilities or facilities incurring joint facility costs must allocate those costs according to the benefits received from the resources represented by those costs.
(2) If a provider files a federal income tax return, the person normally signing the return and the ICF/MR facility administrator must sign the certification.
(3) If someone, who is not an employee of the provider, prepares the cost report, they must submit, as part of the certification, a signed statement indicating their relationship to the provider.
(4) Only original signatures must be affixed to certifications submitted to DSHS.
(2) Annual calendar year cost reports for a private facility must be submitted to DSHS by March 31 of the following year.
(3) Each state facility must submit an annual cost report to DSHS for the period from July 1 of the preceding year through June 30 of the current year (state fiscal year).
(4) Annual fiscal year cost reports for state facilities must be submitted to DSHS by December 31 following the end of the fiscal year.
(5) If a contract is terminated, the provider must submit a final cost report and any other reports due under subsection (2) within one hundred twenty days after the effective date of termination or the expiration of the final extension granted by DSHS (see WAC 388-835-0340). For these reports, the reporting period is January 1 of the year of termination to the effective date of termination.
(6) A new provider must submit a cost report to DSHS by March 31 of the year following the effective date of their contract or the expiration of the final extension granted by DSHS (see WAC 388-835-0340). The period to be reported is the period extending from the contract's effective date through December 31 of that year.
(2) DSHS grants extensions only when it is clear why the due date cannot be met and the circumstances requiring the extension were not foreseeable by the provider.
(2) Interest, at the rate of one percent per month on any unpaid balance, will begin to accrue thirty days after the provider receives DSHS's written demand for repayment.
(2) If DSHS does not receive a properly completed report, including any approved extensions, on or before its due date, all or part of any payments due under the contract may be withheld until the report is properly completed and received by DSHS.
(2) Any required adjustments to reimbursement rates because a false report was filed will be made according to WAC 388-835-0900.
(3) DSHS may refer for prosecution under applicable statues, any provider who files a false report.
(1) Determining allowable costs affecting a final settlement computation, and
(2) Filed before the provider receives notification that a DSHS field audit has been scheduled.
(2) Errors of omissions are considered "significant" if they result in a net difference of two cents or more per resident day or one thousand dollars or more in reported costs, whichever is higher, in any cost area.
(3) Only the pages requiring changes and the certification required by WAC 388-835-0332 must be filed with the amendment.
(4) Any adjustments to reimbursement rates resulting from an amended report will be made according to WAC-388-385-0885.
(a) The circumstances surrounding the amendments;
(b) The reasons why the amendments are needed; and
(c) All relevant supporting documentation.
(2) DSHS may refuse to consider any amendment that gives a provider a more favorable settlement or rate if the amendment is the result of:
(a) Circumstances over which the provider has control; or
(b) Good-faith error using the system of cost allocation and accounting in effect during the reporting period in question.
(3) Acceptance or use by DSHS of an amendment to a cost report does not a release a provider from civil or criminal liability.
MAINTAINING COST REPORT RECORDS
(2) If a provider maintains records based upon a chart of accounts other than the one established by DSHS, they must give DSHS a written schedule clearly illustrating how their individual account numbers correspond to those used by DSHS.
(3) After filing a report with DSHS, a provider must keep for five years, at a location in Washington state specified by the provider, all records supporting the report.
(4) If at the end of five years there are unresolved audit issues related to the report, the records supporting the report must be kept until the issues are resolved.
(5) Providers, according to the terms of their contract, must make records available for review upon demand by authorized personnel from DSHS and the United States Department of Health and Human Services during normal business hours at a location in Washington state specified by the provider.
(6) When a contract is terminated, final settlement must not be made until accessibility to and preservation of the provider's records within Washington state is assured.
(2) Once the provider complies with the recording keeping and inspection provisions of their contract, DSHS must resume current contract payments and must release payments suspended while the provider was out of compliance.
(2) If at the end of five years there are unresolved audit issues surrounding a report, the report must be retained until those issues are resolved.
(2) DSHS must give priority to field audits of final annual reports and, whenever possible, must begin these audits within ninety days after a properly completed final annual report is received.
(3) DSHS normally notifies a provider at least ten working days before the field audit begins.
(a) Of receiving a properly completed annual cost report; or
(b) After the facility is notified it has been selected for an audit.
(2) For a state ICF/MR, DSHS must complete a field audit within three years after a properly completed cost report is received if auditors are given timely access to the facility and all records necessary to conducting their audit.
(a) All income tax returns relating to the audited cost report and work papers supporting the report's data; or
(b) Work papers related to resident trust funds.
(2) The provider must reconcile reported cost data with:
(a) Applicable federal income and payroll tax returns; and
(b) The financial statements for the period covered by the report.
(c) The reconciliation must be in a form that facilitates verification by the auditors.
(3) The provider must designate and make available to the auditors at least one individual familiar with the internal operations of the facility being audited. The designated individual(s) must have sufficient knowledge and access to records to effectively respond to auditor questions and requests for information and documentation.
(2) Auditors must examine a provider's financial and statistical records to verify that:
(a) Supporting records are in agreement with reported data; and
(b) Only assets, liabilities, and revenue and expense items that DSHS has specified as allowable costs have been included by the provider when computing the cost of services provided under the contract;
(c) Allowable costs have been accurately determined and are necessary, ordinary, and related to resident care;
(d) Related organizations and beneficial ownership interests have been correctly disclosed; and
(e) Resident trust funds have been properly maintained.
(3) Auditors must give the provider a draft of their audit narrative and summaries for review and comment before the final narratives and summaries are prepared.
(4) When an audit discloses material discrepancies, undocumented costs, or mishandling of patient trust funds, DSHS auditors, in order to determine if similar problem exist and take corrective action, may:
(a) Re-open a maximum of two prior unaudited cost reporting or trust fund periods; and/or
(b) Select future periods for audit.
(c) DSHS auditors may select reported costs and trust fund accounts for audit on a random or other basis.
(2) Adequate documentation must show that reported costs were:
(a) Incurred during the period covered by the report;
(b) Related to resident care and training; and
(c) Necessary, ordinary and prudent.
(3) Adequate documentation must also show that reported assets were used to provide resident care and training.
RESIDENT TRUST ACCOUNTS
(2) This system must be incorporated into the facility's business records and be capable of being audited.
(3) The bookkeeping system must apply to residents that are:
(a) Incapable of handling their money and whose guardian, relative, DDD regional service office administrator, or physician requests in writing that the facility accept this responsibility. (If the Social Security Form SSA-780, "Certificate of Applicant for Benefits on Behalf of Another," is used as documentation, it must be signed by one of the persons designated in this subsection.)
(b) Capable of handling their own money, but they ask the facility, in writing, to accept this responsibility for them.
(4) It is the facility's responsibility to maintain written authorization requests in a resident's file.
(5) A resident must be given at least a quarterly reporting of all financial transactions affecting their account. The resident's representative payee, guardian and/or other designated agents must be sent a copy of this quarterly report or any other reports related to the resident's account.
(6) Facilities must purchase surety bonds, or otherwise provide assurances or security satisfactory to DSHS, that assures the security of all resident personal funds deposited with them.
(7) Facilities may not require residents to deposit personal funds with them. A facility may hold a resident's personal funds only if the resident or resident's guardian gives written authorization to do so.
(2) Each account and related supporting information must be:
(a) Maintained at the facility;
(b) Kept current;
(c) Balanced each month; and
(d) Detailed, with supporting verification, showing all money received on behalf of the individual resident and how that money was used.
(3) A provider must make each resident trust account available to DSHS representatives for inspection and audit.
(4) A provider must maintain each resident trust accounts for a minimum of five years.
(5) A provider must notify the DDD regional service office when an individual's account balance is within one hundred dollars of the amount listed on their award letter.
(6) A resident can accumulate funds by:
(a) Not spending their entire clothing and personal incidentals allowance; and
(b) Saving other income DSHS specifically designates as exempt.
(2) If residents want to spend an amount greater than the balance in their trust account, the facility may loan the residents money from facility funds.
(3) The facility can collect loans to residents by installments from the portion of the resident's allowance remaining at the end of each month.
(4) The facility cannot charge residents interest on these loans.
(2) Any request for additional equipment such as a walker, wheelchair or crutches must have a written denial from DSHS before a resident's trust account can be charged.
(3) A request for physical therapy, certain drugs or other medical services must have a written denial from DSHS before a resident's trust account can be charged.
(4) A written denial from DSHS is not required when the pharmacist verifies a drug is not covered by the program (e.g., items on the FDA list of ineffective or possible effective drugs, nonformulary over-the-counter (OTC) medications such as vitamins, nose drops, etc.) The pharmacist's notation that the program does not cover the drugs is sufficient.
(2) The fund must be an imprest type fund.
(3) The cash for the fund must come from trust money.
(4) The amount of the fund must be reasonable and necessary for the size of the facility and the needs of the residents, but must not exceed five hundred dollars.
(2) Deposits of resident allowances must be made intact into the trust checking account within one week from the time payment is received from DSHS, social security administration, or any other payor.
(3) A provider must make any related bankbooks, bank statements, check book, check register, all voided and all canceled checks available to DSHS representatives for audit and inspection. The provider must retain these supporting records and documents for at least five years.
(4) Resident trust money cannot be used to pay checking account service charges.
(5) Each banks trust account must be reconciled each month to the trust account ledger for each resident.
(a) Resident or, with their written consent, their guardian;
(b) Resident's designated agent as appointed by power of attorney; or
(c) Appropriate DSHS personnel designated by the DDD regional services administrator.
(2) A provider must complete a receipt, in duplicate, when money is received. One copy must be given to the person making the payment or deposit and the other copy must remain in the receipt book for easy reference.
(3) All residents must endorse, with their own signature, any checks or state warrants they receive. Only when a resident is incapable of signing their own name may the provider use the resident's "X" mark followed by their printed name and the signature of two witnesses.
(4) When both a general fund account and a trust fund account are kept at the same bank, the trust account portion of any deposit can be deposited directly to the trust account.
(5) A provider must credit a resident's trust account ledger sheet when the resident's allowance is received. This entry must be referenced with the receipt number and must be supported by a copy of the deposit slip (one copy for all deposits made).
(2) Before any transfer of ownership occurs, the facility must give each resident, or their representative, a written accounting of any personal funds held by the facility.
(3) If there is disagreement regarding the accounting offered by the former provider, the resident retains all rights and remedies provided under state law.
(2) In situations where the resident leaves the ICF/MR facility without authorization and their whereabouts is unknown, the facility:
(a) Will make a reasonable attempt to locate the missing resident. A "reasonable attempt" includes, but is not limited to, contacting friends, relatives, police, the guardian, and the DDD regional office in the area; and
(b) If the resident cannot be located after ninety days, the facility must notify the department of revenue regarding the existence of "abandoned property" (see chapter 63.29 RCW Uniform Unclaimed Property Act). The facility must deliver to the department of revenue the balance of the resident's trust fund account within twenty days following their notification.
(2) All property records must be available to the resident or designated resident representative (see WAC 388-835-0645).
(3) A facility must issue or obtain written receipts when taking possession or disposing of a resident's personal property. The facility must retain copies and/or originals of these receipts.
(4) A facility must maintain all resident property records so they are available to auditors and in a manner that facilitates the audit process.
ALLOWABLE AND UNALLOWABLE COSTS
(2) Allowable costs do not include increased costs resulting from transactions or the application of accounting methods which circumvent the principles of the prospective cost-related reimbursement system.
(3) DSHS does not allow increased costs resulting from a series of transactions between the same parties and involving the same assets (e.g., sale and leaseback, successive sales or leases of a single facility or piece of equipment).
(4) When a provider requests a rate adjustment according to WAC 388-835-0900 or 388-835-0905, any cost audited previously and not disallowed is subject to DSHS review and reconsideration according to the criteria in this section.
(2) Examples of unallowable costs include, but are not limited to, the following:
(a) Costs of items or services not covered by the Medicaid program. Costs of nonprogram items or services will not be allowed even if indirectly reimbursed by DSHS as a result of an authorized reduction in resident contribution.
(b) Costs of services and items provided to ICF/MR residents covered by DSHS's medical care program but not included in ICF/MR services.
(c) Costs associated with a capital expenditure subject to Section 1122 approval (part 100, Title 42 CFR) if DSHS found the expenditure was not consistent with applicable standards, criteria, or plans. If DSHS was not given timely notice of a proposed capital expenditure, all associated costs will not be allowed as of the date the costs were determined to be nonreimbursable under applicable federal regulations.
(d) Costs associated with a construction or acquisition project that requires certificate of need approval according to chapter 70.38 RCW and that approval was not obtained.
(e) Costs associated with outside activities (e.g., costs allocable to the use of a vehicle for personal purposes, or related to the part of a facility leased out for office space).
(f) All salaries or other compensation of officers, directors, stockholders, and others associated with the provider or home office, except compensation paid for services related to resident care and training.
(g) Costs in excess of limits set in this chapter or costs violating principles contained in this chapter.
(h) Costs resulting from transactions or the application of accounting methods used to circumvent the principles of the prospective cost-related reimbursement system.
(i) Costs applicable to services, facilities, and supplies furnished by a related organization in excess of the lower of cost to the related organization or market meaning the price paid for comparable services, facilities or supplies when purchased in an arms length transaction.
(j) Balances of accounts that cannot be collected (bad debts or uncollectable accounts).
(k) Charity and courtesy allowances.
(l) Cash, assessments, or other contributions to political parties, and cost incurred to improve community or public relations. Dues to charitable organizations, professional organizations and trade associations are allowable costs.
(m) Any portion of trade association dues for legal and consultant fees and costs related to lawsuits or other legal action against DSHS.
(n) Travel expenses for trade association boards of directors in excess of the twelve allowable meetings per calendar year.
(o) Vending machine expenses.
(p) Expenses for barber or beautician services not included in routine care.
(q) Funeral and burial expenses.
(r) Costs of gift shop operations and inventory.
(s) Personal items such as cosmetics, smoking materials, newspapers and magazines, and clothing, except items used in resident activity programs or in ICF/MR programs where clothing is a part of routine care.
(t) Fund-raising expenses except those directly related to the resident activity program.
(u) Penalties and fines.
(v) Expenses related to telephones, televisions, radios, and similar appliances in a resident's private accommodations.
(w) Federal, state, and other income taxes.
(x) Costs of special care services, except where authorized by DSHS.
(y) Expenses for "key-person" insurance and other insurance or retirement plans not available to all employees.
(z) Expenses of profit-sharing plans.
(aa) Expenses related to the purchase and/or use of private or commercial aircraft that exceed what a prudent provider would spend for ordinary and economical transportation when conducting resident care business.
(bb) Personal expenses and allowances of owners or relatives.
(cc) All expenses of maintaining professional licenses or membership in professional organizations.
(dd) Costs related to agreements not to compete.
(ee) Goodwill and the amortization of goodwill.
(ff) Expenses related to vehicles in excess of what a prudent provider would expend for the ordinary and economic provision of transportation needs related to resident care.
(gg) Legal and consultant fees related to a fair hearing against DSHS. Including but not limited to, fees for accounting services used to prepare for an administrative judicial review resulting in a final administrative decision favorable to DSHS or where DSHS's decision is allowed to stand.
(hh) Legal and consultant fees related to a lawsuit against DSHS, including suits appealing administrative decisions.
(ii) Lease acquisition costs and other intangibles not related to resident care and training.
(jj) Interest charges assessed by the state of Washington for failure to make timely refund of overpayments and interest expenses incurred for loans obtained to make such refunds.
(kk) Travel expenses outside the states of Idaho, Oregon, and Washington and the Province of British Columbia except travel to and from the home and central office of a chain organization operation outside those areas if the travel is necessary, ordinary, and related to resident care and training.
(ll) Moving expenses of employees when a demonstrated, good-faith effort has not been made to recruit employees within the states of Idaho, Oregon, and Washington and Province of British Columbia.
(2) A provider must not deduct unrestricted grants, gifts, endowments, and interest earned from them from the allowable costs of a nonprofit facility.
(3) When goods or services are sold, the reduction in allowable costs must be the actual cost of the item, service, or activity. If actual cost cannot be accurately determined, the reduction must be the full amount of the revenue received. When financial benefits such as purchase discounts or rebates are received, the reduction must be the amount of the discount or rebate.
(2) Examples are the cost of:
(a) Meeting licensing and certification standards;
(b) Fulfilling accounting and reporting requirements imposed by this chapter; and
(c) Performing any resident assessment activity required by DSHS.
(a) The costs do not exceed the lower of the cost to the related organization; or
(b) Market, meaning the price paid for comparable services, facilities, or supplies when purchased in an arm's length transaction.
(2) Private facilities must make all cost documentation regarding related organizations available to the auditors at the time and place the entity's financial records are audited. State facilities must make all cost documentation regarding related organizations available to the auditors at DSHS's offices of accounting services, financial recovery, or budget when the facility is audited.
(3) DSHS disallows all payments to or for the benefit of a related organization where the cost to the related organization cannot be documented.
(2) DSHS allows these costs in the administration and operation cost area if they are amortized over at least sixty consecutive months beginning with the month in which the first resident is admitted for care.
(3) Examples of allowable organization costs include, but are not limited to, legal fees incurred in establishing the corporation or other organization and fees paid to states for incorporation.
(4) Organization costs do not include costs relating to the issuance and sale of shares of stock or other securities.
(2) Ordinary expenses for staff training are allowable costs.
(3) Necessary and ordinary expenses for recreational and social activity training conducted by a provider for volunteers are allowable costs.
(4) Training program expenses for other nonemployees are not allowable costs, except the costs associated with training county-contracted training program employees by an ICF/MR as a condition of the ICF/MR's agreement with the county-contracted training program.
(5) DSHS must allow expenses for travel in the states of Idaho, Oregon, and Washington and Province of British Columbia associated with education and training if the expenses meet the requirements of this chapter.
(a) "Necessary" means the interest expense must be incurred in connection with a loan satisfying a financial need of the provider and for a purpose related to resident care and training. Interest expense related to a business opportunity or goodwill is unallowable.
(b) "Ordinary" means the interest rate for the loan must not exceed the rate a prudent borrower would pay, in an arm's length transaction, for a comparable loan in the money market at that time.
(c) Interest expense must include amortization of bond discounts and expenses related to the bond issue. The amortization period must be the period from the date the bonds are sold to their maturity date or their date of extinguishment if they are retired before they mature.
(d) Interest expense for assets acquired in a change of ownership after September 30, 1984, is disallowed on any loan principal in excess of the former owner's depreciation base on July 18, 1984.
(2) Interest that is paid to or for the benefit of a related organization is allowed but only to the extent that the actual interest does not exceed the related organization's cost of using the funds.
(3) For construction loans, a provider must capitalize interest expense and loan origination fees incurred during the period of construction. Such costs must be amortized over the life of the constructed asset beginning with the date the first resident is admitted or the date the asset is put into service, whichever occurs first.
(2) In the absence of a contract, total compensation includes gross salary or wages and fringe benefits (e.g., health insurance) available to all employees.
(3) Total compensation does not include payroll taxes paid by the provider.
(a) Compensation is ordinary if it is the amount usually paid for comparable services in a comparable facility to an unrelated employee, and does not exceed limits established in this chapter.
(b) A service is necessary if it is related to resident care and training and would have to be performed by another person if the owner or relative did not perform it.
(2) A provider, in maintaining customary time records adequate for audit, must include time records for owners and relatives receiving compensation. These records must document how compensated time was spent performing necessary services.
(3) For purposes of this section, if the provider is a corporation, "owner" includes all corporate officers and directors.
CAPITALIZED COSTS AND DEPRECIATION
|Equipment, including furniture and furnishings||Historical cost||Useful life|
|For settlement purposes beginning January 1, 1881 and for rate setting purposes beginning July 1, 1982||At least $500 per item||At least one year from date asset is put into service|
|For settlement purposes beginning January 1, 1990 and for rate setting purposes beginning July 1, 1990||At least $1,000 per item||At least one year from date asset is put into service|
|For settlement purposes beginning January 1, 1996 and for rate setting purposes beginning July 1, 1996||At least $500 per item||At least one year|
(1) Required or authorized by the lease agreement;
(2) Cost more than five hundred dollars; and
(3) Involve at least one of the following:
(a) Increase the interior floor space of the structure;
(b) Increase or renew paved areas outside the structure that are either adjacent to the structure or provide access to it;
(c) Modification to the exterior or interior walls of the structure;
(d) Installation of additional heating, cooling, electrical, water-related, or similar fixed equipment;
(e) Landscaping or redecorating; or
(f) Increasing the structure's useful life by at least two years.
(1) Buildings, meaning the basic structure or shell and additions to it.
(2) Equipment such as elevators, heating system, and air conditioning system that are attached to a building and characterized by:
(a) An economic useful life of at least three years but shorter than the life of the building to which it is attached;
(b) Incapable of being removed from the building to which it is attached;
(c) A unit cost sufficiently large enough to justify ledger control; and
(d) A physical size and identity that makes control by identification tags possible.
(3) Equipment not attached to buildings.
(4) Land improvements such as paving, tunnels, underpasses, on-site sewer and water lines, parking lots, shrubbery, fences, wall, etc., where replacement is the responsibility of the provider.
(5) Leasehold improvements and additions made by the lessee belong to the lessor after the lease expires.
(2) Minor equipment is generally characterized as:
(a) Not occupying a fixed location and is used by a variety of departments;
(b) Small in size and unit cost;
(c) Subject to inventory control;
(d) A fairly large number of items are in use; and
(e) Possessing a useful life of one to three years.
(3) If properly capitalized (see WAC 388-835-0230), minor equipment is depreciated. If not properly capitalized, minor equipment is expensed when acquired.
(1) Off-site sewer and water lines;
(2) Public utility charges necessary to service the land;
(3) Government assessments for street paving and sewers;
(4) Permanent roadways and grading of a nondepreciable nature; and
(5) Curbs and sidewalks, the replacement of which is not the responsibility of the provider.
(a) Plus the cost of preparing the asset for use;
(b) Less the asset's estimated salvage value, if any, where the straight-line or sum-of-the-years digits methods of depreciation is used;
(c) Less any goodwill; and
(d) Less any accumulated depreciation incurred during periods the asset was used by the provider personally or in another business.
(2) When depreciable assets are acquired from a related organization, the provider's depreciation base cannot exceed the base the related organization had or would have had under a contract with DSHS.
(2) If an appraisal process is used to establish the fair market value of equipment, vendors dealing in that particular type of equipment must perform the appraisals.
(a) Fair market value at the date of donation or death, less goodwill. (Any estimated salvage value must be deducted from fair market value when either the straight-line or sum-of-the-years digits method of depreciation is used); or
(b) The historical cost of the last owner to contract with DSHS, if any.
(2) If the donation or distribution is between related organization, the base must be the lesser of:
(a) Fair market value, less goodwill and, where appropriate, salvage value, or
(b) The depreciation base the related organization used or would have used when contracting with DSHS.
(2) Useful life is measured from the date of the most recent arm's length acquisition of the asset.
(3) Building improvements to owned or leased buildings must be depreciated over the remaining useful life of the building or fifteen years, whichever is greater, except for improvements to licensed boarding home facilities required by the Fire Safety Evaluation System (FSES) of the 1984 Life Safety Code. Improvements to these licensed boarding home facilities must be depreciated for at least five years. A provider must receive DSHS approval before following this exception.
(4) Improvements to leased property that are, according to the lease agreement, the responsibility of the provider must be depreciated over the useful life of the improvement, except for improvements to licensed boarding home facilities required by the Fire safety Evaluation System (FSES) of the 1984 Life Safety Code. Improvements to these licensed boarding home facilities must be depreciated for at least five years. A provider must receive DSHS approval before following this exception.
(5) A provider may change the estimated useful life of an asset to a longer period if necessary.
(2) Equipment must be depreciated using the straight-line method, the sum-of-the-years digits method, or the declining balance method at a rate not to exceed one hundred fifty percent of the straight-line rate. Providers electing to use either the sum-of-the-years digits method or the declining balance method may change to the straight-line method without permission of the department.
(2) Depreciation expense must be:
(a) Identifiable and recorded in the provider's accounting records; and
(b) Computed using the depreciation base, useful lives and methods specified in this chapter.
(3) If a provider reports annual depreciation expense that includes depreciation on assets unrelated to resident care and training, the annual reported expense must be reduced accordingly.
(4) Once a tangible asset is fully depreciated, no additional depreciation can be claimed unless a new depreciation base is established according to the rules of this chapter.
(2) Depreciation cannot be claimed on permanently abandoned assets.
(3) If an asset has been retired from active use but is being held for stand-by or emergency service and DSHS has determined that the asset is needed and can be effectively used in the future, depreciation may be claimed by the provider.
GAINS AND LOSSES ON RETIRED ASSETS
(2) DSHS will calculate any difference between the actual reimbursements paid and the amount of reimbursement that should be paid after the gain or loss is spread. If the difference results from a gain DSHS must recover the difference from the provider. If the difference results from a loss the difference will be added to allowable costs when determining the settlement.
(2) All rates must be reasonable and adequate to meet the costs incurred by economically and efficiently operated facilities providing ICF/MR services according to state and federal laws and regulations.
(3) For private facilities:
(a) Final payments must be the lower of the facility's prospective rate or allowable costs.
(b) Prospective rates must be determined according to WAC 388-835-0845, 388-835-0850, 388-835-0860, 388-835-865, 388-835-0870, 388-835-0875, and 388-835-0880.
(c) Final payments must be determined according to WAC 388-835-0880.
(4) For state facilities:
(a) Final payments must be the facility's allowable costs.
(b) Interim rates must be calculated using the most recent annual reported costs (see WAC 388-835-0845) divided by the total resident days during the reporting period. These costs may be adjusted to incorporate federal, state, or department changes in program standards or services.
(c) Final payments must be determined according to WAC 388-835-0880.
(2) The prospective reimbursement rate must be based on the:
(a) Provider's projected cost of operation;
(b) Costs and payment rates of the prior provider, if any; and/or
(c) Costs and payment rates, taking into account applicable lids or maximums, of other providers in comparable circumstances.
(3) If DSHS does not receive a properly completed projected budget at least sixty days before the contract's effective date, a preliminary rate, based on information from former and/or comparable providers, will be prepared by DSHS. This preliminary rate must remain in effect until an initial prospective rate can be set.
(4) If a change of ownership takes place that does not result from an arm's length transaction, the new provider's prospective rates for administration, operations and property costs cannot exceed the former provider's rates. The former provider's rates can be adjusted, if necessary, to reflect changes in economic trends.
(2) If a provider participated in the ICF/MR program for at least six months during the previous calendar year, their rates must be based on the prior period's allowable costs. If the provider participated in the program for less than six months in the previous calendar year, their rates must be calculated according to WAC 388-835-0840 requirements.
(3) Unless circumstances beyond DSHS's control interfere, all providers submitting correct and complete cost reports by March 31 must receive notification of their new rates by July 1.
(4) When calculating a provider's rate, DSHS must use data from the most recent and complete cost report submitted by the provider and reviewed by DSHS as described in WAC 388-835-0700.
(5) Inflation factor adjustments are based on the Implicit Price Deflator for Personal Consumption from the state of Washington, Economic and Revenue Forecast prepared by the Office of the Forecast Council.
(a) An examination of prior years reported costs;
(b) An examination of any cost report review adjustments made in prior years and their final disposition;
(c) An examination of findings, if any, from prior year cost report field audits; and
(d) Findings, if any, from the field audit of the cost report currently being reviewed.
(2) If it appears that a provider incorrectly calculated or reported their costs, DSHS may:
(a) Request additional information from the provider;
(b) Schedule a special field audit of the provider; or
(c) Make adjustments to the reported information. If adjustments are made, DSHS must give the provider a schedule of the adjustments including an explanation for each one and the dollar amount associated with each one.
(3) If the provider believes that DSHS adjustments are incorrect, the adjustments must be reviewed according to WAC 388-835-0900. If this review does not satisfactorily resolve the dispute, the adjustment must be further reviewed according to WAC 388-835-0910.
(1) Use in exception profiling and establishing rates; and
(2) Analytical, statistical, or informational purposes that the department considers important.
(2) The five component rates are:
(a) Resident care and habilitative services;
(c) Administration and operations;
(d) Property; and
(e) Return on equity.
(3) The three cost centers are:
(a) Resident care and habilitation;
(b) Administration, operations, and property; and
(c) Return on equity.
(2) Resident care and habilitation cost centers at facilities with less than sixteen residents and licensed as a boarding home, must, according to applicable federal and state regulations, reimburse for resident living services, habilitative and training services, recreation services, and nursing services. These cost centers must also reimburse for resident care and training staff who perform any of the administration and operations functions specified in WAC 388-835-0870.
(3) A facility's resident care and habilitation cost center rate must be its most recent reported costs per resident day adjusted for inflation.
(1) The food rate component established by WAC 388-835-0865;
(2) The administration and operations rate component established by WAC 388-835-0870; and
(3) The property rate component established by WAC 388-835-0875.
(1) For purposes of this section "compensation" means gross salaries, wages, and the applicable cost of fringe benefits made available to all employees. Compensation does not include payroll taxes paid by the provider.
(2) A licensed administrator's total compensation for actual services rendered to an ICF/MR facility on a full-time basis (at least forty hours per week, including reasonable vacation, holiday, and sick time) is allowable at the lower of:
(a) Actual compensation received; or
(b) For calendar year 2000, the amount specified in the following table that corresponds to the number of set-up beds in the facility.
|Number of set-up beds||Maximum compensation|
|15 or less||$42,886|
|16 to 79||$47,739|
|80 to 159||$52,832|
|160 and up||$56,163|
(d) A licensed administrator's compensation will be allowed only if DSHS is notified in writing within ten days following the start of their employment.
(3) Total compensation of not more than one full-time licensed assistant administrator will be allowed if there are at least eighty set-up beds in the ICF/MR facility. Compensation is allowable at the lower of:
(a) Actual compensation received; or
(b) Seventy-five percent of the amount specified in the above table.
(4) Total compensation of not more than one full-time registered administrator-in-training is allowed at the lower of:
(a) Actual compensation received; or
(b) Sixty percent of the amount specified by DDD in the above table.
(5) The cost of a licensed administrator, assistant administrator, or administrator-in-training is not an allowable expense in ICF/MR facilities with fifteen beds or less. The facility's qualified mental retardation professional (QMRP) will provide administrative services.
(6) A QMRP's total compensation of wages and/or salary is allowable at the lower of:
(a) Actual compensation received; or
(b) The amount specified in DDD in the above table.
(7) If a licensed administrator, licensed assistant administrator, registered administrator-in-training, or QMRP are employed on a less than full-time basis, allowable compensation must be the lower of:
(a) Actual compensation received; or
(b) The maximum amount allowed multiplied by the percentage derived from dividing actual hours worked plus reasonable vacation, holiday and sick time, by two thousand and eighty hours.
(8) A provider must maintain time records for any licensed administrators, assistant administrators, administrators-in-training, or QMRPs they employ.
(2) Copies of any amendments to a management agreement must be received by DSHS at least thirty days before the amendment become effective.
(3) Management fees for periods before DSHS receives a copy of the agreement are not allowable costs.
(4) The department may waive the sixty-day notice requirement to protect the health and safety of facility residents. Any waiver of the sixty-day notice requirement by DSHS must be in writing.
(1) A written management agreement that:
(a) Creates a principal and/or agent relationship between the provider and the manager; and
(b) Identifies the items, services, and activities that the manager will provide.
(2) Documentation that verifies the management service was performed.
(3) Assurance that the service performed was necessary and did not duplicate any service provided by the provider.
(1) The maximum allowable compensation for a licensed administrator and, if the facility has at least eighty set-up beds, an assistant administrator even if one is not employed minus the actual compensation received by the licensed administrator and assistant administrator.
(2) The maximum allowable compensation for a QMRP at a ICF/MR facilities with fifteen beds or fewer, minus the actual compensation received by the QMRP.
(a) The limits set out in WAC 388-835-0400; or
(b) The lower of the related organization's actual cost of providing necessary resident care and training services under the management agreement or the cost of comparable services purchased in an arm's length transaction elsewhere.
(2) If related organization costs are joint facility costs, their measurement must comply with the requirements of WAC 388-835-0400.
(2) General administrative and management service costs as described in subsection (1) of this section are subject to the management fee limits established in WAC 388-835-0405.
(2) If the nonresident staff visit extends beyond three weeks, any travel and housing expenses are subject to the management fee limits established in WAC 388-835-0405.
(2) Bonuses paid to central office employees are management costs that are subject to the management fee limits established in WAC 388-835-0405.
(3) Bonuses paid to other employees not located at an ICF/MR facility and performing managerial services are management costs that are subject to the management fee limits established in WAC 388-835-0405.
(a) Overall administration and management of the facility;
(b) Operations and maintenance of the physical plant;
(c) Resident transportation;
(d) Dietary service (other than the cost of food and beverages);
(e) Laundry service;
(f) Medical and habilitative supplies;
(g) Taxes; and
(2) An ICF/MR facility's administration and operations rate component is the lesser of:
(a) It's most recent reported cost per resident day adjusted for inflation; or
(b) The calculated rate that is at or above eighty-five percent of state and private facilities' most recent reported cost per resident day adjusted for inflation. This ranking must be based on cost reports used to determine rates for facilities with an occupancy level of at least eighty-five percent during the cost report period.
(2) It is the facility's most recent desk-reviewed cost per resident day.
(1) First, a provider's net equity is calculated using appropriate items from the provider's most recent cost report and relevant Medicare rules and regulations. Note: Goodwill is not included in the calculation of net equity. Also, monthly equity calculations will not be used.
(2) Second, the Medicare rate of return for the twelve-month period ending on the provider's cost report-closing date is multiplied by the provider's net equity.
(3) Finally, the amount calculated in subsection (2) is divided by the provider's annual resident days for the cost report period to determine a return on equity rate per resident day.
(2) A field audit can be used to determine whether the providers reported equity exceeds the equity calculated according to Medicare and the rules of this chapter.
(1) Reimbursement rates for providers cannot exceed the provider's customary charge to the general public for the type of service covered by the rate.
(2) Public facilities rendering services for free or for a nominal charge will be reimbursed according to the methods and standards established in this chapter.
(2) Each provider must complete a proposed preliminary settlement as part of their annual cost report. The due date for the proposed preliminary settlement is the same as the due date for the annual cost report. After reviewing the proposed preliminary settlement, DSHS must issue a preliminary settlement report to the provider.
(3) If a field audit is conducted, DSHS must evaluate the audit findings and issue a final settlement that incorporates the auditor's findings and DSHS's evaluation.
(4) If according to a preliminary or final settlement and the procedures in this chapter, a provider received overpayments from DSHS, they must refund those overpayments to the department. Conversely, DSHS must pay provider for any underpayments for which the department is responsible.
(5) Following a preliminary or final settlement, payment for services must be at the most recent available settlement rate.
(2) If a provider received overpayments or payments in error from DSHS, they must refund those payments within thirty days after receiving the preliminary or final settlement report.
(3) If a provider fails to comply with subsection (2) and the contract has not been terminated, DSHS must deduct the amount the provider owes, plus interest, from the department's current monthly payment due to the provider. The interest rate charged by DSHS on any unpaid balance is one percent per month.
(4) If a provider fails to comply with subsection (2) and the contract has been terminated, DSHS may:
(a) Deduct the amount owed by the provider, plus interest, from any amounts due to the provider from the department. (The interest rate on any unpaid balance is of one percent per month); or
(b) Use whatever legal means is available to recover the overpayment or erroneous payment plus interest on the unpaid balance at the rate of one percent per month.
(2) DSHS cannot withhold any amount owed by a provider, plus interest, from current payments due to the provider if the provider's debt is being administratively reviewed or judicially appealed.
(3) DSHS may recover portions of refunds and assess interest on amounts not specifically disputed by a provider in an administrative hearing or judicial appeal.
(4) If the administrative or judicial remedy sought by the provider is not granted or is partially granted after all appeals are exhausted or terminated by mutual agreement, the provider must refund all amounts owed to DSHS. These amounts, plus interest, must be paid within sixty days following the date of an administrative or judicial decision or the date the dispute process was mutually terminated. Interest accrues on the amount owed from the date a review was requested to the date the debt is repaid.
(2) A provider's administration, operations, and property cost center settlement rate must be the prospective rate for the report period, including any payment adjustments, weighted by the number of paid resident days each rate was in effect.
(3) A provider's return on equity settlement rate must be the prospective rate for the report period weighted by the number of paid resident days the rate was in effect.
(2) If accepted, the proposed preliminary settlement becomes the preliminary settlement report.
(3) If rejected, DSHS must issue a preliminary settlement report by cost center that fully substantiates disallowed costs, refunds, or underpayments due and adjustments to the proposed preliminary settlement.
(a) Disallowed costs;
(c) Underpayments; or
(d) Adjustments to cost reports, financial statements, other reports, and schedules submitted by the provider.
(2) A final settlement report must use the prospective rate at which the provider was paid during the report period, including any resident specific payment adjustments made for resident care and training cost center. Resident specific payments must be weighted by the number of paid resident days reported for the period each rate was in effect. DSHS must compare these payments to the provider's audited allowable costs for the period.
(3) A provider's administration operations and property cost center settlement rate is the prospective rate for the period weighted by the number of paid resident days each rate was in effect.
(4) A provider's return of equity rate is the prospective rate for the report period weighted by the number of paid resident days the rate was in effect.
(2) If a provider, in good faith, is disputing audit findings or determinations through the administrative review or judicial appeal process, DSHS may issue a partial final settlement report to recover overpayments based on audit findings or determinations not being disputed.
(1) If the state facility's allowable costs for the report period are greater than their interim payment, the amount owed to the facility is the allowable cost amount minus the interim payment.
(2) If the state facility's allowable costs for the report period are less than their interim payment, the amount owed by the department is the interim payment minus the allowable cost amount.
(2) The proposed preliminary settlement must be:
(a) Submitted to DSHS when the state facility submits their cost report.
(b) Responded to by DSHS within one hundred twenty days after they receive it from the state facility. DSHS must verify the accuracy of the facility's proposal and issue a preliminary settlement substantiating the settlement amount.
(3) The final settlement is the preliminary settlement issued by DSHS if an audit is not conducted.
(4) If an audit is conducted, DSHS must submit a final settlement report to the state facility after the audit process is completed. This report must substantiate all disallowed costs, refunds, underpayments, or adjustments to the provider's financial statements, cost report, and final settlement.
(2) Unless specified at the time the reimbursement rate is issued, the rate will be effective from the first day of the month the rate is issued until a new rate becomes effective.
(3) If a rate is changed because of a successful provider appeal, the effective date of the new rate is the same as the effective date of the old rate.
(2) DSHS does not grant rate adjustments for cost increases that are or were subject to management control or negotiations. Examples include, but are not limited to, all lease cost increases or any cost increases not expressly authorized in subsection (3) and (4).
(3) DSHS does adjust rates for any capitalized additions or replacements made as a condition for licensure or certification.
(4) DSHS does adjust rates for cost increases that must be incurred and cannot be met through the provider's prospective rate. Examples of such cost increases are:
(a) Program changes required by DSHS;
(b) Changes in staffing levels or consultants at a facility required by DSHS;
(c) Changes required by a survey; and
(d) Changes in revenue assessments required by the state legislature.
(a) Financial analysis showing the increased cost and an estimate of the rate increase needed to cover the increased cost. The estimated rate increase must be computed according to allowable methods;
(b) Written justification for granting the rate increase; and
(c) Certification and documentation that show the staffing changes and/or other improvements started or completed.
(2) Provider's requesting adjustments under WAC 388-835-0900 must submit a written plan identifying the staff they are going to add and the resident needs they have not met because of insufficient staffing.
(3) When reviewing provider requests made under WAC 388-835-0900, DSHS considers:
(a) If the additional staff requested by a provider is appropriate for meeting resident needs;
(b) Staffing level comparisons with facilities having similar characteristics;
(c) The facility's physical layout;
(d) Supervision and management of current staff;
(e) Historical trends regarding the facility's under-spending for resident care and habilitation;
(f) Number and position of existing staff; and
(g) Other resources available to the provider.
(2) If the additional funds resulting from the rate increase are not spent on DSHS approved changes or improvements approved, DSHS may ask that they be returned immediately.
(3) If a facility gives written notice to DSHS that it intends to close by a specific date and that returning the funds would jeopardize its ability to provide for the health, safety, and welfare of its residents, it may not have to return the additional funds.
ERRORS AND OMISSIONS
(2) In addition to adjusting the rate, DSHS must notify the provider in writing:
(a) Regarding the nature and substance of each adjustment;
(b) That the effective date of each adjustment is the same as the effective date of the original rate; and
(c) Of any amount due to either DSHS or the provider as a result of an adjustment.
(2) Amended cost report pages must be certified and accompanied by a written explanation why the amendment is necessary. Amendments are not accepted by DSHS unless they comply with the requirements in WAC 388-835-0815.
(3) If DSHS concludes that the amendment changes are material, the amended pages must be audited by a field audit.
(4) If DSHS concludes that the amendments are incorrect or unacceptable as a result of the field audit or other information it receives, any rate adjustment based on the amendments is null and void. Any scheduled future rate payment increases resulting from the amendments must be canceled immediately.
(5) Any rate adjustment payments must be made according to the repayment provisions in WAC 388-835-0905.
(a) One hundred twenty days after the field audit narrative and summary is sent to the provider; or
(b) One hundred twenty days after a preliminary settlement becomes a final settlement.
(2) A final settlement that is concluded within the one hundred twenty-day time limits could only be reopened to adjust prospective rates that are based upon errors or omissions.
(3) Only adjustments to prospective rates (and the related computations) resulting from errors or omissions can be reviewed if a timely request is filed according to the provisions of WAC 388-835-0950.
(a) Within sixty days after the provider receives a rate adjustment notification from DSHS; or
(b) According to a repayment schedule developed by DSHS.
(2) If a provider does not repay its debt to DSHS when it is due, DSHS may deduct the amount owed from the providers current DSHS payment.
(3) If a provider unsuccessfully contests the rate adjustment (see WAC 388-835-0950, they must repay DSHS (or start repayment) within sixty days after the administrative or judicial proceedings are completed.
(4) If DSHS owes a provider as a result of a rate adjustment, DSHS must pay the provider within thirty days after notifying the provider of the adjustment.
PUBLIC REVIEW -- PUBLIC DISCLOSURE
BILLING PROCEDURES AND PAYMENTS
(2) A provider cannot bill DSHS for services provided to a resident until they receive a DSHS resident award letter. When the provider receives the award letter, they can bill for services provided since the resident's admission or eligibility date.
(3) A provider cannot bill DSHS for the day of a resident's death, discharge, or transfer from the ICF/MR facility.
(2) For each resident, DSHS will pay an amount equal to the appropriate rates multiplied by the number of resident days each rate was in effect, less any amount a resident is required to pay (see WAC 388-835-0940).
(3) A provider must accept DSHS's reimbursement rates as full compensation for all services the provider is obligated to provide under their contract. The provider must not seek or accept additional compensation any contracted services from or on behalf of a resident.
(1) Contract expires, is terminated or is not renewed;
(2) Facility license is revoked; or
(3) Facility is decertified as a Title XIX facility.
(2) The provider is responsible for:
(a) Collecting from the resident; and
(b) Accounting for, according to procedures established by DSHS, any authorized reduction in the resident's contribution.
(2) Any necessary corrections should be made in the next ICF/MR statement and a copy of the supporting documentation should be attached.
(3) If a provider receives increased funds for a resident, the normal amount must be allowed for clothing, personal, and incidental expenses and the balance must be applied to the cost of care.
(1) Becomes the Medicaid provider during the receivership period;
(2) Assumes all new provider reporting responsibilities;
(3) Assumes all other new provider responsibilities established in this chapter; and
(4) Is responsible, during the receivership period, for refunding any Medicaid rate payments received that exceed cost of services provided.
(1) Court ordered compensation, if any, for the receiver. Receiver compensation may already be available through the:
(a) Return on equity cost center rate, or
(b) Facility administrator salary where the receiver is also the facility's administrator.
(c) In order to satisfy the court order when existing sources of compensation are less than the compensation ordered by the court, DSHS could consider the difference as an additional allowable cost when establishing prospective reimbursement rates.
(2) Start-up costs and costs of repairs, replacements, and additional staff needed for resident health, training, security, and welfare. No additional money will be added to the rate if these costs can be covered through the return on equity cost center rate; and
(3) Any other allowable costs contained in this chapter.
(1) Range of compensation for private ICF/MR facility managers;
(2) Experience and training of the receiver;
(3) Size, location, and current condition of the facility; and
(4) Additional factors considered appropriate.
(2) DSHS must recover any emergency or transitional assistance given to a receiver from facility generated revenue that is not obligated for facility operations.
(3) If DSHS has not fully recovered the emergency or transitional assistance when the receivership ends, DSHS may file:
(a) An action against the former licensee or owner to recover what is owed; or
(b) A lien against the facility or the proceeds from the sale of the facility.
(1) The Medicaid reimbursement rate for the former owner or licensee must be what it was before receivership unless the former owner or licensee requests prospective rate revisions according to the requirements of this chapter.
(2) The Medicaid reimbursement rate for licensed replacement operators must be established according to the rules in this chapter governing prospective reimbursement rates for new providers.
(1) An "errors or omissions" reimbursement rate adjustment issued to the provider (see WAC 388-835-0845) or DSHS's refusal to adjust a rate the provider believes is incorrect due to errors or omissions. The provider must request an administrative review within thirty days of receiving notification that a rate has been adjusted or that DSHS refuses to adjust the rate.
(2) The way in which a DSHS rule, contract provision, or policy statement was applied when calculating the provider's prospective cost related reimbursement system's rate.
(3) An audit finding, other audit determination, a rate review or other settlement determination.
(2) Written requests must be filed with the:
(a) Office of Financial Recovery services when the provider challenges an audit finding (adjusting journal entries or AJEs) or other audit determination; or
(b) DDD Director when the provider challenges a rate, desk review, or other settlement determination.
(3) The written request must:
(a) Be signed by the provider or facility administrator;
(b) Identify the specific determination being challenged and the date it was issued;
(c) State, as specifically as possible, the issues and regulations involved and why the provider claims the determination was erroneous; and
(d) Be accompanied by any documentation that will be used to support the provider's position.
(2) Unless both parties agree, in writing, to a specific later date, the conference must be scheduled at least fourteen days after DSHS notifies the provider that a conference will be held and no later than ninety days after DSHS receives the provider's review request.
(3) The conference may be conducted by telephone unless DSHS or the provider requests, in writing, that it be held in person.
(4) The provider and DSHS representatives must participate in the conference.
(5) Either at the conference or before, the provider must give DSHS any documentation:
(a) Requested by DSHS that the provider is required to maintain for audit purposes under WAC 388-835-0270; and
(b) The provider intends to use to support their position.
(6) At the conference DSHS and the provider must clarify the issues and attempt to resolve them.
(7) If additional documentation is necessary to resolve the issues, a second conference meeting must be scheduled. Unless both parties agree, in writing, to a specific later date, this second conference meeting must be scheduled not later than thirty days after the first session.
(8) Regardless of whether an agreement is reached, DSHS must give the provider a written decision within sixty days after the conference ends.
(2) To request an adjudicative proceeding, a provider must:
(a) File a written request with the office of administrative hearings (OAH);
(b) Sign the request or have it signed by the facility administrator;
(c) State as specifically as possible the issues and regulations involved;
(d) State the reasons for disagreeing with the administrative review decision; and
(e) Attach a copy of the contested decision and any documentation the provider will use to support their position.
(3) The adjudicative proceeding must be governed by the Administrative Procedure Act (chapter 34.05 RCW), this chapter, and chapter 388-02 WAC. If any part of this chapter conflict with chapter 388-02 WAC, this chapter prevails.
COST OF CARE OF MENTALLY DEFICIENT PERSONS RESIDING IN STATE INSTITUTIONS
(a) Guardian of the resident's estate; or
(b) If a guardian has not been appointed, resident's spouse or parent or other person acting in a representative capacity and in possession of the resident's property; and
(c) The superintendent of the state school.
(2) If a resident is an adult and is not under a legal disability, the department must personally serve the NFR on the resident.
(1) A specific statement of the issues and law involved;
(2) The grounds for contesting the department decision; and
(3) A copy of the NFR being contested.
The following sections of the Washington Administrative Code are repealed:
|WAC 388-835-010||Terms -- Definitions.|
|WAC 388-835-020||ICF/MR care.|
|WAC 388-835-025||Name of IMR.|
|WAC 388-835-030||Closure of an IMR facility.|
|WAC 388-835-035||Adequate IMR care.|
|WAC 388-835-040||Continuity of resident care.|
|WAC 388-835-045||IMR contract -- Noncompliance.|
|WAC 388-835-050||Minimum staff requirements.|
|WAC 388-835-055||Placement of client.|
|WAC 388-835-060||Transfer of client -- Relocation.|
|WAC 388-835-065||Resident rights -- Relocation redetermination of eligibility.|
|WAC 388-835-070||Transfer or discharge planning.|
|WAC 388-835-075||Discharge, readmission, and incident reporting.|
|WAC 388-835-080||Social leave for IMR residents.|
|WAC 388-835-085||Superintendent's limited authority to hold.|
|WAC 388-835-090||Prospective cost-related reimbursement.|
|WAC 388-835-095||Conditions of participation.|
|WAC 388-835-100||Projected budget for new contractors.|
|WAC 388-835-105||Change of ownership.|
|WAC 388-835-110||Termination of contract.|
|WAC 388-835-115||Due dates for reports.|
|WAC 388-835-120||Requests for extensions.|
|WAC 388-835-130||Failure to submit final reports.|
|WAC 388-835-135||Improperly completed or late reports.|
|WAC 388-835-140||Completing reports and maintaining records.|
|WAC 388-835-145||Certification requirement.|
|WAC 388-835-150||Reports -- False information.|
|WAC 388-835-155||Amendments to reports.|
|WAC 388-835-160||Requirement for retention of reports by the department.|
|WAC 388-835-165||Requirements for retention of records by the contractor.|
|WAC 388-835-170||Disclosure of IMR facility reports.|
|WAC 388-835-175||Desk review.|
|WAC 388-835-180||Field audits.|
|WAC 388-835-185||Preparation for audit by the contractor.|
|WAC 388-835-190||Scope of field audits.|
|WAC 388-835-195||Inadequate documentation.|
|WAC 388-835-200||Deadline for completion of audits.|
|WAC 388-835-205||Disclosure of audit narratives and summaries.|
|WAC 388-835-210||Resident trust accounts.|
|WAC 388-835-215||Accounting procedures for resident trust accounts.|
|WAC 388-835-220||Trust moneys -- Imprest fund.|
|WAC 388-835-225||Trust moneys control or disbursement.|
|WAC 388-835-230||Trust moneys availability.|
|WAC 388-835-235||Accounting upon change of ownership.|
|WAC 388-835-240||Procedure for refunding trust money.|
|WAC 388-835-245||Liquidation of trust fund.|
|WAC 388-835-250||Resident property records.|
|WAC 388-835-255||Allowable costs.|
|WAC 388-835-260||Substance prevails over form.|
|WAC 388-835-265||Offset of miscellaneous revenues.|
|WAC 388-835-270||Costs of meeting standards.|
|WAC 388-835-275||Limit on costs to related organizations.|
|WAC 388-835-280||Start-up costs.|
|WAC 388-835-285||Organization costs.|
|WAC 388-835-290||Education and training.|
|WAC 388-835-295||Total compensation -- Owners, relatives, and certain administrative personnel.|
|WAC 388-835-300||Owner or relative -- Compensation.|
|WAC 388-835-305||Allowable interest.|
|WAC 388-835-310||Offset of interest income.|
|WAC 388-835-315||Operating leases of facilities and equipment.|
|WAC 388-835-320||Rental expense paid to related organizations.|
|WAC 388-835-330||Depreciation expense.|
|WAC 388-835-335||Depreciable assets.|
|WAC 388-835-340||Depreciation base.|
|WAC 388-835-345||Depreciation base -- Donated or inherited assets.|
|WAC 388-835-355||Methods of depreciation.|
|WAC 388-835-360||Retirement of depreciable assets.|
|WAC 388-835-365||Handling of gains and losses upon retirement of depreciable assets.|
|WAC 388-835-370||Handling of gains and losses upon retirement of depreciable assets -- Other periods.|
|WAC 388-835-375||Handling of gains and losses upon retirement of depreciable assets.|
|WAC 388-835-380||Recovery of excess over straight-line depreciation.|
|WAC 388-835-385||Unallowable costs.|
|WAC 388-835-390||Reimbursement principles.|
|WAC 388-835-395||Program services not covered by the reimbursement rate.|
|WAC 388-835-400||Prospective reimbursement rate for new contractors.|
|WAC 388-835-405||Rate determination.|
|WAC 388-835-410||Desk review for rate determination.|
|WAC 388-835-415||Cost centers.|
|WAC 388-835-420||Resident care and habilitation cost center rate.|
|WAC 388-835-425||Administration, operations, and property cost center rate.|
|WAC 388-835-430||Food rate component.|
|WAC 388-835-435||Maximum allowable compensation of certain administrative personnel.|
|WAC 388-835-440||Management agreements, management fees, central office services, and board of directors.|
|WAC 388-835-445||Administration and operations rate component.|
|WAC 388-835-450||Property rate component.|
|WAC 388-835-455||Return on equity.|
|WAC 388-835-460||Upper limits to reimbursement rate.|
|WAC 388-835-465||Principles of settlement.|
|WAC 388-835-470||Procedures for overpayments and underpayments.|
|WAC 388-835-475||Preliminary settlement.|
|WAC 388-835-480||Final settlement.|
|WAC 388-835-485||Interim rate.|
|WAC 388-835-490||Final payment.|
|WAC 388-835-495||Notification of rates.|
|WAC 388-835-500||Adjustments required due to errors or omissions.|
|WAC 388-835-510||Adjustments to prospective rates.|
|WAC 388-835-515||Public review of rate-setting methods and standards.|
|WAC 388-835-520||Public disclosure of rate-setting methodology.|
|WAC 388-835-525||Billing period.|
|WAC 388-835-530||Billing procedures.|
|WAC 388-835-535||Charges to residents.|
|WAC 388-835-545||Suspension of payment.|
|WAC 388-835-550||Termination of payments.|
|WAC 388-835-560||Recoupment of undisputed overpayments.|
|WAC 388-835-565||Administrative review -- Adjudicative proceeding.|