Section 405 IAC 1-14.6-18 - Allowable costs; calculation of allowable owner or related party compensation; wages; salaries; feesAuthority: IC 12-15-1-10; IC 12-15-21-2
Affected: IC 12-13-7-3; IC 12-15
Sec. 18.
(a) Compensation for:(1) an owner, a related party, management, general line personnel, and consultants who perform management functions; or(2) any individual or entity rendering services above the department head level; shall be subject to the annual limitations described in this section. All compensation received by the parties as described in this subsection shall be reported and separately identified on the financial report form even though such payment may exceed the limitations. This compensation is allowed to cover costs for all administrative, policymaking, decision making, and other management functions above the department head level. Through June 30, 2019, compensation subject to this limitation includes wages, salaries, and fees for the owner, management, contractors, and consultants who actually perform management functions as well as any other individual or entity performing such tasks. Beginning July 1, 2019, and thereafter, wages, salaries, and fees paid for the owner, administrator, assistant administrator, management, contractors, and consultants who actually perform management functions as well as any other individual or entity performing such tasks are subject to this limitation.
(b) Through June 30, 2019, the maximum allowable amount for owner, related party, and management compensation shall be the average allowable cost of the median patient day for owner, related party, and management compensation subject to this limitation as defined in subjection [sic, subsection] (a). The average allowable cost of the median patient day shall be updated four (4) times per year effective January 1, April 1, July 1, and October 1.(c) Beginning July 1, 2019, the maximum amount of owner, related party, and management compensation for the parties identified in subsection (a) shall be the lesser of the amount: (1) under subsection (d), as updated by the office on July 1 of each year based on the average rate of change of the most recent twelve (12) quarters of the Gross National Product Implicit Price Deflator; or(2) of patient-related wages, salaries, or fees actually paid or withdrawn that were properly reported to the federal Internal Revenue Service as wages, salaries, fringe benefits, or fees. If liabilities are established, they shall be paid within seventy-five (75) days after the end of the accounting period or the costs shall be disallowed.
(d) The owner, related party, and management compensation limitation per operation effective July 1, 1995, shall be as follows: Owner and Management Compensation |
Beds | Allowance |
10 | $21,542 |
20 | $28,741 |
30 | $35,915 |
40 | $43,081 |
50 | $50,281 |
60 | $54,590 |
70 | $58,904 |
80 | $63,211 |
90 | $67,507 |
100 | $71,818 |
110 | $77,594 |
120 | $83,330 |
130 | $89,103 |
140 | $94,822 |
150 | $100,578 |
160 | $106,311 |
170 | $112,068 |
180 | $117,807 |
190 | $123,562 |
200 | $129,298 |
200 and over | $129,298 + $262/bed over 200 |
This subsection applies to each provider of a Medicaid-certified operation. The unused portions of the allowance for one (1) operation shall not be carried over to other operations.
Office of the Secretary of Family and Social Services; 405 IAC 1-14.6-18; filed Aug 12, 1998, 2:27p.m.: 22 IR 80, eff Oct 1, 1998; readopted filed Jun 27, 2001, 9:40 a.m.: 24 IR 3822; filed Apr 24, 2006, 3:30 p.m.: 29 IR 2982; readopted filed Sep 19, 2007, 12:16p.m.: 20071010-IR-405070311RFA; filed Nov 12, 2009, 4:01 p.m.: 20091209-IR-405090215FRA; filed May 31, 2013, 8:52 a.m.: 20130626-IR-405120279FRA; readopted filed Oct 28, 2013, 3:18 p.m.: 20131127-IR-405130241RFAFiled 4/29/2015, 3:38 p.m.: 20150527-IR-405150034FRAFiled 4/19/2018, 11:30 a.m.: 20180516-IR-405170552FRAReadopted filed 5/30/2023, 11:54 a.m.: 20230628-IR-405230292RFA