Washington Administrative Code

(1) A provider must maintain a subsidiary ledger with an account for each resident for whom the provider holds money in trust.(2) Each account and related supporting information must be:(a) Maintained at the facility;(b) Kept current;(c) Balanced each month; and(d) Detailed, with…

(1) A resident may not overdraw their account (show a debit balance).(2) If residents want to spend an amount greater than the balance in their trust account, the facility may loan the residents money from facility funds.(3) The facility can collect loans to residents by installm…

Resident trust accounts cannot be charged for services provided under Title XIX.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0350, filed 4/20/01, effective 5/21/01.]

(1) Any properly made charge to a resident's trust account for medical services must be supported by a written denial from DSHS.(2) Any request for additional equipment such as a walker, wheelchair or crutches must have a written denial from DSHS before a resident's trust account…

(1) Providers may maintain petty cash funds for residents.(2) The fund must be an imprest type fund.(3) The cash for the fund must come from trust money.(4) The amount of the fund must be reasonable and necessary for the size of the facility and the needs of the residents, but mu…

(1) A provider must deposit all money, over and above the trust fund petty cash amount, intact into a trust fund checking account that is separate and apart from any other bank account(s) of the facility or other facilities.(2) Deposits of resident allowances must be made intact …

(1) A provider must not release trust fund money to anyone other than the:(a) Resident or, with their written consent, their guardian;(b) Resident's designated agent as appointed by power of attorney; or(c) Appropriate DSHS personnel designated by the DDA regional services admini…

Any money held in trust for a resident must be available to them for their personal and incidental needs upon their request or the request of one of the individuals designated in WAC 388-835-0335.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0375, filed 4/20/01, …

(1) When a facility is sold or some other transfer of ownership takes place, the former provider must provide the new provider with a written accounting, based upon generally accepted auditing standards, of all resident funds being transferred. The former provider must also obtai…

When a resident is discharged and/or transferred, the balance of their trust account, along with a receipt, will be returned to the individual designated in WAC 388-835-0335 within thirty days of the resident's transfer or discharge.[Statutory Authority: RCW 71A.20.140. WSR 01-10…

(1) In the case of deceased resident, the provider must obtain a receipt from the next-of-kin, guardian, or duly qualified agent when the balance of the trust fund is released. If the next-of-kin, guardian or duly qualified agent cannot be identified, the DDA regional service off…

(1) A facility must maintain a current, written record for each resident that includes written receipts for all personal property entrusted to the facility by the resident.(2) All property records must be available to the resident or designated resident representative (see WAC 38…

(1) Allowable costs are documented costs that are necessary, ordinary, related to providing ICF/ID services to ICF/ID residents, and not expressly declared nonallowable by applicable statutes or regulations. Costs are ordinary if they are of the nature and magnitude that a pruden…

(1) Costs are unallowable if they are not documented, necessary, or ordinary and do not relate to providing services to ICF/ID residents.(2) Examples of unallowable costs include, but are not limited to, the following:(a) Costs of items or services not covered by the medicaid pro…

(1) A provider must reduce allowable costs whenever the item, service, or activity covered by the costs generate revenue or financial benefits (e.g., purchase discounts or rebates) other than through the provider's normal billing for ICF/ID services.(2) A provider must not deduct…

(1) All necessary and ordinary expenses incurred by a provider to meet required standards associated with providing ICF/ID services are allowable costs.(2) Examples are the cost of:(a) Meeting licensing and certification standards;(b) Fulfilling accounting and reporting requireme…

(1) DSHS allows costs applicable to services, facilities, and supplies furnished to a provider by a related organization only to the following extent:(a) The costs do not exceed the lower of the cost to the related organization; or(b) Market, meaning the price paid for comparable…

DSHS allows all necessary and ordinary start-up costs in the administration and operations rate component. Start-up costs must be amortized over at least sixty consecutive months beginning with the month the first resident is admitted for care.[Statutory Authority: RCW 71A.20.140…

(1) DSHS allows necessary and ordinary costs directly related to the creation of a provider's corporation or other form of business that are incurred before the admission of the first resident.(2) DSHS allows these costs in the administration and operation cost area if they are a…

(1) DSHS allows ordinary expenses associated with on-the-job and in-service training required for employee orientation and certification when those expenses directly relate to performing an employee's assigned duties.(2) Ordinary expenses for staff training are allowable costs.(3…

Facility and/or equipment rental or lease costs associated with an arm's length operating lease are allowable costs.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0440, filed 4/20/01, effective 5/21/01.]

The expense of renting facilities or equipment from a related organization are allowable to the extent that the rent paid does not exceed the related organization's costs of owning (e.g., depreciation, interest on a mortgage) or leasing the assets. Computing the related organizat…

(1) DSHS allows a provider's necessary and ordinary interest costs incurred for working capital loans and capital indebtedness.(a) "Necessary" means the interest expense must be incurred in connection with a loan satisfying a financial need of the provider and for a purpose relat…

Except for nonprofit facilities, a provider must deduct from allowable interest expense all interest income earned from either investing or lending nonrestricted and restricted funds.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0455, filed 4/20/01, effective 5/2…

(1) Total compensation means the compensation provided in the employment contract, including benefits. The employment contract can be written, verbal, or inferred from the acts of the parties.(2) In the absence of a contract, total compensation includes gross salary or wages and …

(1) DSHS limits the total compensation of an owner or an owner's relative to the ordinary compensation for necessary services actually performed.(a) Compensation is ordinary if it is the amount usually paid for comparable services in a comparable facility to an unrelated employee…

A provider must capitalize equipment, including furniture and furnishings according to the following table:Equipment, including furniture and furnishingsHistorical costUseful lifeFor settlement purposes beginning January 1, 1881 and for rate setting purposes beginning July 1, 198…

Buildings and other real property items, components, improvements and leasehold improvements must be capitalized if they are:(1) Required or authorized by the lease agreement;(2) Cost more than five hundred dollars; and(3) Involve at least one of the following:(a) Increase the in…

The useful lives for all leasehold improvements are based upon the American Hospital Association (AHA) guidelines for the applicable asset.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0480, filed 4/20/01, effective 5/21/01.]

Depreciable assets are tangible assets that are subject to depreciation and in which a provider has an ownership interest.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0485, filed 4/20/01, effective 5/21/01.]

Some examples of depreciable assets are:(1) Buildings, meaning the basic structure or shell and additions to it.(2) Equipment such as elevators, heating system, and air conditioning system that are attached to a building and characterized by:(a) An economic useful life of at leas…

(1) Minor equipment includes items such as wastebaskets, bedpans, syringes, catheters, silverware, mops, and buckets.(2) Minor equipment is generally characterized as:(a) Not occupying a fixed location and is used by a variety of departments;(b) Small in size and unit cost;(c) Su…

Because the economic useful life of land is considered to be unlimited, land is not a depreciable asset.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0500, filed 4/20/01, effective 5/21/01.]

Examples of costs that are capitalized as land costs include the cost of:(1) Offsite sewer and water lines;(2) Public utility charges necessary to service the land;(3) Government assessments for street paving and sewers;(4) Permanent roadways and grading of a nondepreciable natur…

(1) The depreciation base of a tangible asset is the asset's historical cost at the time it is acquired by the provider in an arm's length transaction:(a) Plus the cost of preparing the asset for use;(b) Less the asset's estimated salvage value, if any, where the straight-line or…

(1) If DSHS challenges the historical cost of an asset or if a provider is unable to adequately document the historical cost of an asset, the department may use an appraisal process to establish the asset's fair market value at the time of purchase.(2) If an appraisal process is …

(1) The depreciation base of donated and/or inherited assets is the lesser of:(a) Fair market value at the date of donation or death, less goodwill. (Any estimated salvage value must be deducted from fair market value when either the straight-line or sum-of-the-years digits metho…

(1) Except for buildings, a provider must not adopt useful lives shorter than the guideline lives contained in the Internal Revenue Service class life ADR system or published by the American Hospital Association. Thirty years is the shortest useful life a provider can adopt for b…

(1) Buildings, building improvements, land improvements, leasehold improvements, and fixed equipment must be depreciated using the straight-line method.(2) Equipment must be depreciated using the straight-line method, the sum-of-the-years digits method, or the declining balance m…

(1) Depreciation expense on tangible assets used to provide ICF/ID services is an allowable cost.(2) Depreciation expense must be:(a) Identifiable and recorded in the provider's accounting records; and(b) Computed using the depreciation base, useful lives and methods specified in…

(1) Depreciation cannot be claimed on tangible assets that are sold, traded, scrapped, exchanged, stolen, wrecked or destroyed by fire or some other casualty.(2) Depreciation cannot be claimed on permanently abandoned assets.(3) If an asset has been retired from active use but is…

For settlement purposes beginning with January 1, 1981 and for rate setting purposes beginning with the July 1, 1982 rate period, the rules in WAC 388-835-0265 through 388-835-0275 apply.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0545, filed 4/20/01, effective…

When a tangible asset is retired, the difference between the assets undepreciated base and any proceeds received from its retirement is considered a gain or loss on retirement.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0550, filed 4/20/01, effective 5/21/01.]

If a provider replaces a retired asset, any gain or loss on retirement must be deducted from or added to the cost of the replacement asset, respectively. However, a loss on retirement can only be added to the replacement asset's cost if the provider makes a reasonable effort to r…

(1) If a retired asset is not replaced the gain or loss on retirement must be spread over the actual life of the asset up to the date of retirement. However, a loss can only be spread if the provider has made a reasonable effort to recover at least the outstanding book value of t…

If a retired asset is not replaced and the provider is terminating their contract with DSHS, the gain or loss on retirement must be accounted for according to the requirements in WAC 388-835-0280.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0565, filed 4/20/01, …

If a provider terminates their contract without selling or otherwise retiring equipment that was depreciated using an accelerated method, depreciation schedules for this equipment for those periods when the provider participated in the ICF/ID program must be adjusted. DSHS will r…