C.M.R. 10, 144, ch. 101, ch. III, 144-101-III-107, subsec. 144-101-III-107-1
The purpose of these principles is to comply with 42 U.S.C. §§ 1396d(a)(16) and (h)42 CFR §441.150 through §441.184 and 42 CFR § 483.350 through § 483.376. These principles provide reimbursement methodology for Psychiatric Residential Treatment Facility (PRTF) services (provided under the MaineCare Program in accordance with Title XIX of the Social Security Act) through the use of rates which are reasonable and adequate to meet the costs of the facility. These costs must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable State and Federal laws, regulations, and quality and safety standards. Accordingly, these rates take into account the costs of services required to attain or maintain the highest practicable physical, psychological, and psychosocial well-being of each MaineCare resident.
The Authority of the Department to accept and administer any funds which may be available from private, local, State or Federal sources for the provision of the services set forth in the Principles of Reimbursement is established in Title 22 of the Maine Revised Statutes Annotated. The regulations themselves are issued pursuant to authority granted to the Department by Title 22 of the Maine Revised Statutes Annotated §§41-B and 42(1).
Providers of PRTF services are paid a statewide per diem rate for medical, clinical and direct care costs (direct care services), and paid a facility-specific rate for routine and fixed costs (room and board costs). The routine and fixed costs facility rate is informed by annual cost reporting performed by the providers using a state-developed cost report. The medical, clinical and direct care per diem rate is not cost settled. The routine and fixed cost rate is cost settled by the Department.
Department as used throughout these principles is the State of Maine Department of Health and Human Services.
State Licensing and Federal Certification as used throughout these principles is the "Regulations Governing the Licensing and Functioning of Children's Residential Care Facilities with Secure Capacity and Psychiatric Treatment Level 2" and the Federal Certification requirements for psychiatric residential treatment facility services that are in effect at the time the cost is incurred. Secure Capacity Level 2 means Psychiatric Residential Treatment Facility (PRTF).
Accrual Method of Accounting means that revenue is reported in the period when it is earned, regardless of when it is collected, and expenses are reported in the period in which they are incurred, regardless of when they are paid.
AICPA is the American Institute of Certified Public Accountants.
Allowable Costs are costs that MaineCare will reimburse under these Principles of Reimbursement and that are below the caps.
Ancillary Services are medical services identifiable to a specific resident furnished at the direction of a physician and for which charges are customarily paid separately from the direct care per diem charge.
Capital Asset is defined as services, equipment, supplies or purchases which have a value of $500 or greater.
Cash Method of Accounting means that revenues are recognized only when cash is received and expenditures for expense and asset items are not recorded until cash is disbursed for them.
Centers for Medicare and Medicaid Services (CMS ) is the agency within the U.S. Department of Health and Human Services (HHS) responsible for developing and implementing policies governing the Medicare and Medicaid programs.
Common Ownership exists when an individual possesses significant ownership or equity in the provider and the institution or organization serving the provider.
Control exists where an individual or an organization has the power, directly or indirectly, to significantly influence or direct the actions or policies of an organization or institution.
Cost Finding is the process of segregating costs by cost centers and allocating indirect cost to determine the cost of services provided.
Days of Care are the total number of days of care provided whether or not payment is received and the number of any other days for which payment is made. (Note: Bed hold days and discharge days are included only if payment is received for these days.)
Direct Costs are costs that are directly identifiable with a specific activity, service or product of the program.
Discrete Costing is the specific costing methodology that calculates the costs associated with new additions/renovations of psychiatric residential treatment facilities. None of the historical basis of costs from the original building are allocated to the addition/renovation.
Donated Asset is an asset acquired without making any payment in the form of cash, property or services.
Experience Modifier is the rating number given to PRTFs based on worker's compensation claims submitted for the previous three (3) years. The lower the rating number, the better the worker's compensation claims ratio.
Fair Market Value is the price that the asset would bring by bona fide bargaining between well-informed buyers and sellers at the date of acquisition. Usually the fair market price will be the price at which bona fide sales have been communicated for assets of like type, quality, and quantity in a particular market at the time of acquisition.
Fixed Cost Component shall be determined based upon actual allowable costs incurred by an economically and efficiently operated facility.
Fringe Benefits include payroll taxes, qualified retirement plan contributions, group health, dental, and life insurance, cafeteria plans and flexible spending plans.
Generally Accepted Accounting Principles (GAAP) are accounting principles approved by the American Institute of Certified Public Accountants: those accounting principles with substantial authoritative support. In order of authority the following documents are considered GAAP:
Historical Cost is the cost incurred by the present owner in acquiring the asset. The historical cost shall not exceed the lower of:
In computing the historical cost three (3) categories of assets will be evaluated: Land, Building, and Equipment. Each category will be evaluated based on the methods listed above.
Land (non-depreciable) includes the land owned and used in provider operations. Included in the cost of the land are costs of such items as off-site sewer and water lines, public utility charges necessary to service the land, governmental assessments for street paving and sewers, the cost of permanent roadways and grading of a non-depreciable nature, the cost of curbs and sidewalks whose replacement is not the responsibility of the provider and other land expenditures of a non-depreciable nature.
Land Improvements (depreciable) include paving, tunnels, underpasses, on-site sewer and water lines, parking lots, shrubbery, fences, walls, etc. (if replacement is the responsibility of the provider).
Leasehold Improvements include betterments and additions made by the lessee to the leased property. Such improvements become the property of the leaser after the expiration of the lease.
Medical Leave Days are defined as days PRTFs are reimbursed at the routine and fixed costs rate when a member is hospitalized for an acute medical or psychiatric condition that cannot be treated at the PRTF.
Necessary and Proper Costs are for services and items that are essential to provide appropriate resident care and activities at an efficient and economically operated facility. They are costs for services and items that are commonly provided and are commonly accepted as essential for the type of facility in question.
Net Book Value of an asset is the depreciable basis used under the program by the asset's last participation owner less the depreciation recognized under the program.
Owners include any individual or organization with ten percent (10%) equity interest in the provider's operation and any members of such individual's family or his or her spouse's family. Owners also include all partners and all stockholders in the provider's operation and all partners and stockholders or organizations that have an equity interest in the provider's operation.
Policy Planning Function includes the policy-making, planning and decision-making activities necessary for the general and long-term management of the affairs of the facility, including, but not limited to the following:
Psychiatric Residential Treatment Facility (PRTF) means a facility other than a hospital, that provides psychiatric services to individuals under age 21, in an inpatient setting, and which meets the requirements set forth in Chapter II, Section 107, Psychiatric Residential Treatment Facility Services.
Reasonable Costs are those services and items for which a prudent and cost-conscious buyer would pay and which are essential for resident care and activities at the facility as determined by the Division of Audit. If any of a provider's costs are determined to exceed by a significant amount, those that a prudent and cost-conscious buyer would have paid, those costs of the provider will be considered unreasonable in the absence of a showing by the provider that those costs were unavoidable.
Related to Provider means that the provider to a significant extent is associated or affiliated by common ownership with or has control of or is controlled by the organization furnishing the services, facilities, and supplies.
State Fiscal Year is defined as July 1st of the first year through June 30th of the second year. Example: State fiscal year 2019 begins July 1st of 2018 and ends June 30th of 2019.
Straight-line Method is a method of depreciation whereby the cost or other basis (e.g., fair market value in the case of a donated asset) of an asset, less its estimated salvage value, if any, is determined first. This amount is then distributed in equal amounts over the period of the estimated useful life of the asset.
Therapeutic Leave Days are defined as days when PRTFs are reimbursed at the routine and fixed costs rate when a member is on a leave of absence for therapeutic reasons as directed by the team physician as indicated in the member's treatment plan.
C.M.R. 10, 144, ch. 101, ch. III, 144-101-III-107, subsec. 144-101-III-107-1