N.J. Admin. Code § 10:52-6.20

Current through Register Vol. 56, No. 21, November 4, 2024

Section 10:52-6.20 - Natural classifications of expense

(a) Salaries and wages, including stipends, payable in cash, for services performed by an employee for a hospital (except a physician, including compensation for time not worked such as on call) vacation, holiday and sickpay or the monetary value assigned to direct services provided to the hospital by a person performing in an employee relationship are considered remuneration. Monetary value shall not be assigned to the services of students or other volunteer workers. All labor costs (including deferred income which qualifies as pension costs) shall be included in the accounting period during which the employee accrues the payment for their services.

(b) The following applies to the Physician Compensation--Hospital Component:

1. That portion of compensation for a physician's (M.D., D.O., D.D.S./M.D.) activities, provided through agreement with a hospital, representing services which are not directly related to an identifiable part of the medical care of an individual patient is the hospital component of physician compensation, and must be split between salaries and fees. Hospital services include teaching, research conducted in conjunction with and as part of patient care (to the extent that such costs are not met by special research funds), administration, general supervision of professional or technical personnel, laboratory quality control activities, committee work, performance of autopsies, and attending conferences as a part of the physician's hospital service activities. The allocation of physician compensation between hospital and professional components and documentation thereof is to be in accordance with Medicare HIM-15, section 2108, incorporated herein by reference, for provider component. Medicare manuals are available via the Internet from www.cms.gov. To obtain paper copies of the Medicare HIM-15 document or other Medicare manuals write to:

Department of Health and Human Services

Centers for Medicare & Medicaid Services

Division of Medicare

Regional Office 2

26 Federal Plaza

New York, New York 10278

(c) The following applies to the Physician Compensation--Professional Component:

1. That portion of compensation for a physician's services provided through agreement with a hospital pertaining to activities which are directly related to the medical care of an individual patient is the professional component of physician compensation (for example, remuneration for the identifiable medical services by the physician which contribute to the diagnosis of the patient's condition or to his or her treatment) and must be split between salaries and fees. The allocation of physician compensation between hospital professional components and documentation thereof is to be in accordance with Medicare HIM-15, section 2108. For the address for obtaining Medicare documents, see (b) above.

(d) Employee Fringe Benefits are amounts paid to or on behalf of an employee, in addition to direct salary or wages, and from which the employee or his beneficiary derives a personal benefit before or after the employee's retirement or death.

1. Fringe Benefits associated with physicians shall be reported with physician's compensation.

2. Pensions, annuities and deferred income arrangement costs for past and current services shall be accounted for and reported in accordance with Employee Retirement Income and Security Act (ERISA) and Internal Revenue Service (IRS) requirements. Employee Fringe Benefits include: FICA; State and Federal unemployment insurance; disability insurance; life insurance; employee health insurance; retirement (net of actuarial and realized gains on the investment of related funds); Workers' Compensation insurance; other payroll related employee benefits; tuition reimbursement and other training; moving expenses of new employees of a non-recurring nature; the cost of providing free or subsidized meals or cost to the employee at less than charges to employees; employee parking lot costs net of any revenue received for operation of the facility; and other non-payroll employee benefits.

3. The cost of providing health care services to employees shall be included in classifications of expense in various cost centers providing the funds. Such costs will be factored into the Preliminary Cost Base and Schedule of Rates by certain revenue adjustments. Where a hospital elects to self-insure for Workers' Compensation or unemployment insurance, costs reported shall be the amounts set aside for that accounting period plus associated administrative costs, where a separate fund was established, to the actual amounts of claims paid during the accounting year if a fund is not established. Where a hospital provides free or subsidized health care services to employees or physicians, the hospital's customary charges shall be generated and accounted for separately as personnel health allowances.

4. In order to preserve comparability of hospital expenses for provision of direct patient care, purchased employee health insurance expenses shall be reported as a separate cost center and shall not be distributed to the labor costs of each center. Employee Fringe Benefits shall be assigned to the cost center in which the employee's compensation is reported on the following basis:

Benefit	Basis of Assignment
FICA--non-physician and physician	Direct Cost
All other Payroll Related Benefits including
Unemployment Insurance, Disability Insurance,
Worker's Compensation and Pension and
Retirement	Salaries
Life Insurance	Salaries or FTEs
Employee Education and Training	FTEs
Room and Board	FTEs
Cafeteria	FTEs
Parking Lot	FTEs

(e) Other Direct Expenses include all other direct non-capital operating expenses not classified elsewhere and reported for Costs Related to Patient Care. Other Direct Expenses include the following: utilities; non-physician professional fees; licensing fees; dues assessments; travel; postage; printing and duplicating costs; outside training sessions; subscriptions; paid taxes as defined in 10:52-6.16; and insurance, other than employee fringe benefit insurance programs.

N.J. Admin. Code § 10:52-6.20

Recodified from N.J.A.C. 10:52-6.22 and amended by R.2000 d.29, effective 1/18/2000.
See: 31 New Jersey Register 3151(a), 32 New Jersey Register 276(a).
In (e), changed N.J.A.C. reference.
Amended by R.2005 d.214, effective 7/5/2005.
See: 37 New Jersey Register 436(a), 37 New Jersey Register 2506(a).
In (b), inserted the sentence containing the Internet site, inserted "paper copies" preceding "of the Medicare HIM-15 document" and substituted "Centers for Medicare & Medicaid Services" for "Health Care Financing Administration" in 1; in (d), substituted "Income" for "Insurance" following "Employee Retirement" in 2.