N.J. Admin. Code § 10:52-6.25

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

Section 10:52-6.25 - Reports of costs and revenues

(a) The financial elements shall take into account a facility's income from all sources, including specific purpose grants and other funds from governmental sources, but excluding income and principal from board or donor restricted funds, gifts and special fund raising projects. Expenses incurred and revenues generated by a hospital for items not included in the definitions of Services Related to Patient Care (that is Routine Services, Ambulatory Services, Ancillary Services, Patient Care General Services, and Institutional Services) shall be classified as either other operating expenses and revenues or non-operating revenue. These expenses and revenues shall be accounted for separately to determine if and how they shall be applied to Costs Related to Patient Care and the Capital Facilities Allowance to determine the hospital's total financial elements or the Current Cost Base. (For Preliminary Cost Bases established using data from all Other Operating and Non-Operating Revenues and Expenses reported as Standard Hospital Accounting and Rate Evaluation (SHARE) cost center costs and "expense recoveries" shall be treated as Case B, as defined in (a)2 below). There are three cases into which such reconciliations are classified:

1. Case A--Expenses and revenues related to activities which the hospital has selected to engage in but which are not an integral part of, or necessary for, the provision of patient care. Such expenses and revenues are netted against each other. Gains are applied as reductions to the Current Cost Base used to determine hospital payment rates, but any losses are not applied.

2. Case B--Expenses and revenues related to activities which the hospital has elected to engage in and which are an integral part of, or necessary for, the provision of patient care. Such expenses and revenues are netted against each other. Losses are applied as increases to the Current Cost Base and gains are applied as reductions.

3. Case C--Expenses and revenues related to activities which are specifically excluded under the State rules. Expenses and revenues shall not be netted against each other. Neither gains nor losses shall be applied in determination of the Current Cost Base.

(b) Items of other operating expense and revenue shall be excluded from Services Related to Patient Care reporting centers. Other operating expenses and revenues so determined, in addition to non-operating revenues, shall be classified to account for all revenue and expense transactions of the hospital's Unrestricted Fund per the hospital's financial statements. Accounting differences between the hospital's financial statements and the Financial Elements Report shall be reconciled.

(c) Other operating expenses and revenues and non-operating revenues shall be categorized below as:

1. Excluded health care services;

2. Education and research;

3. Sales and services not related to patient care;

4. Patient convenience items;

5. Administrative items; and

6. Other income.

(d) Expenses and revenues of these items are netted against each other and the resulting total gains subtracted from or total losses added to Costs Related to Patient Care and the Capital Facilities Allowance to determine the hospital's Current Cost Base, depending on the Case (A, B, or C) into which the item is classified in 10:52-6.27 through 6.33. Items not listed in 10:52-6.27 through 6.33 shall be assigned to the case whose definition in (c) above best matches the nature of the item.

N.J. Admin. Code § 10:52-6.25

Recodified from N.J.A.C. 10:52-6.27 by R.2000 d.29, effective 1/18/2000.
See: 31 New Jersey Register 3151(a), 32 New Jersey Register 276(a).
Former N.J.A.C. 10:52-6.25, Purchased Services, recodified to N.J.A.C. 10:52-6.23.