Section 16.03.10.070 - EXCEPTION TO THE RELATED ORGANIZATION PRINCIPLEAn exception is provided to the general rule applicable to related organizations. The exception applies if the provider demonstrates by convincing evidence to the satisfaction of the intermediary:
01.Supplying Organization. That the supplying organization is a bona fide separate organization;02.Nonexclusive Relationship. That a substantial part of the supplying organization's business activity of the type carried on with the provider is transacted with other organizations not related to the provider and the supplier by common ownership or control and there is an open, competitive market.03.Sales and Rental of Extended Care Facilities. The exception is not applicable to sales, lease or rentals of nursing homes or extended care facilities. These transactions would not meet the requirement that there be an open, competitive market for the facilities furnished. See PRM, Sections 1008 and 1012.a. Rental expense for transactions between related entities will not be recognized. Costs of ownership will be allowed.b. When a facility is purchased from a related entity, the purchaser's depreciable basis will not exceed the seller's net book value. See PRM, Section 1005.Idaho Admin. Code r. 16.03.10.070