Minnesota Administrative Rules

9549.0036 NONALLOWABLE COSTS.

The costs listed in items A to EE are not allowable for purposes of setting payment rates but must be identified on the nursing facility's cost report.

A.

All contributions, including charitable contributions, and contributions to political action committees or campaigns.

B.

Salaries and expenses of a lobbyist.

C.

Legal and related expenses for unsuccessful challenges to decisions by governmental agencies.

D.

Assessments made by or the portion of dues charged by associations or professional organizations for litigation except for successful challenges to decisions by agencies of the state of Minnesota; lobbying costs; or contributions to political action committees or campaigns. Where the breakdown of dues charged to a nursing facility is not provided, the entire cost shall be disallowed.

E.

Advertising designed to encourage potential residents to select a particular nursing facility. This item does not apply to a total expenditure of $2,000 for all notices placed in the telephone yellow pages for the purpose of stating the nursing facility's name, location, phone number, and general information about services in the nursing facility.

F.

Assessments levied by the commissioner of the Minnesota Department of Health for uncorrected violations.

G.

Employee or owner's membership or other fees for social, fraternal, sports, health, or similar organizations.

H.

Cost incurred for activities directly related to influencing employees with respect to unionization.

I.

Costs of activities not related to resident care such as flowers or gifts for employees or owners, employee parties, and business meals except as in part 9549.0040, subpart 7, item X.

J.

Costs related to purchase of and care for pets in excess of $5 per year per licensed bed.

K.

Penalties including interest charged on the penalty, interest charges which result from an overpayment, and bank overdraft or late payment charges.

L.

Costs of sponsoring employee, youth, or adult activities such as athletic teams and beauty contests.

M.

Premiums on owner's or board member's life insurance policies, except that such premiums shall be allowed if the policy is included within a group policy provided for all employees, or if such a policy is required as a condition of mortgage or loan and the mortgagee or lending institution is listed as the beneficiary.

N.

Personal expenses of owners and employees, such as vacations, boats, airplanes, personal travel or vehicles, and entertainment.

O.

Costs of training programs for anyone other than employees or volunteers in the nursing facility.

P.

Costs of training programs to meet the minimum educational requirements of a position, education that leads to a degree, or education that qualifies the employee for a new trade or profession. This item does not apply to training or education of nursing aides or training to meet the requirements of laws, rules, or regulations for keeping an employee's salary, status, or position or to maintain or update skills needed in performing the employee's present duties.

Q.

Bad debts and related bad debt collection fees except as provided in part 9549.0040, subpart 7, item V.

R.

Costs of fund raising activities.

S.

Costs associated with the management of investments which may produce interest income, dividend income, or other investment income or losses.

T.

Costs of functions normally paid by charges to residents, employees, visitors, or others such as the direct and indirect costs of operating a pharmacy, congregate dining program, home delivered meals program, gift shop, coffee shop, apartment, or day care center.

U.

Operating costs for activities to the extent that the activities are financed by gifts or grants from public funds. A transfer of funds from a local governmental unit to its governmentally owned nursing facility is not a gift or grant under this item.

V.

Telephone, television, and radio service provided in a resident's room except as in part 9549.0040, subpart 6, item D.

W.

Costs of covenants not to compete.

X.

Identifiable costs of services provided by a licensed medical therapeutic or rehabilitation practitioner or any other vendor of medical care which are billed separately on a fee for service basis, including:

(1)

the purchase of service fees paid to the vendor or his or her agent who is not an employee of the nursing facility or the compensation of the practitioner who is an employee of the nursing facility;

(2)

allocated compensation and related costs of any nursing facility personnel assisting in providing these services; and

(3)

allocated operating or property cost for providing these services such as housekeeping, laundry, maintenance, medical records, payroll taxes, space, utilities, equipment, supplies, bookkeeping, secretarial, insurance, supervision and administration, and real estate taxes and special assessments.

If any of the costs in subitems (1) to (3) are incurred by the nursing facility, these costs must be reported as nonreimbursable expenses, together with any of the income received or anticipated by the nursing facility including any charges by the nursing facility to the vendor.

Y.

Costs for which adequate documentation is not maintained or provided as required by parts 9549.0010 to 9549.0080.

Z.

Fringe benefits or payroll taxes associated with disallowed salary costs.

AA.

Costs associated with sales or reorganizations of nursing facilities.

BB.

Accruals of vacation and sick leave for employees which are not fully vested.

CC.

Payments made in lieu of real estate taxes, unless such payments are made under a legally enforceable irrevocable written contract entered into prior to June 17, 1985.

DD.

Adverse judgments, settlements, and repayments of escrow accounts resulting from the enforcement of Minnesota Statutes, section 256B.48 and related costs and expenses.

EE.

Costs including legal fees, accounting fees, administrative costs, travel costs, and the costs of feasibility studies attributed to the negotiation or settlement of a sale or purchase of any capital asset by acquisition or merger for which any payment has previously been made under parts 9549.0010 to 9549.0080.

Statutory Authority:

MS s 256B.41 to 256B.502

History:

9 SR 2659; 11 SR 866; L 1992 c 513 art 7 s 136

Published Electronically:

October 11, 2007