Washington Administrative Code

(1) Each provider's reimbursement rate must be recalculated once each calendar year. The recalculated rate will be implemented prospectively. The recalculated rate will be effective on July 1 of the calendar year in which it was computed. Rates may be recalculated to reflect legi…

DSHS must review and analyze each annual cost report within six months after it is properly completed and filed with the department.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0595, filed 4/20/01, effective 5/21/01.]

DSHS reviews and analyzes annual cost reports to determine if the information contained in them is correct, complete, and reported according to generally accepted accounting principles, the requirements of this chapter and any other applicable rules and instructions issued by the…

(1) DSHS' review and analysis may include, but is not limited to:(a) An examination of prior years reported costs;(b) An examination of any cost report review adjustments made in prior years and their final disposition;(c) An examination of findings, if any, from prior year cost …

DSHS may accumulate data from properly completed cost reports for:(1) Use in exception profiling and establishing rates; and(2) Analytical, statistical, or informational purposes that the department considers important.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-83…

(1) A provider's overall ICF/ID resident reimbursement rate consists of five component rates within three cost centers.(2) The five component rates are:(a) Resident care and habilitative services;(b) Food;(c) Administration and operations;(d) Property; and(e) Return on equity.(3)…

(1) Resident care and habilitation cost centers at facilities with at least sixteen residents and licensed as a nursing facility, must, according to applicable federal and state regulations, reimburse for resident living services, habilitative and training services, recreation se…

Administration, operations, and property cost center rates are the sum of three separate rate components:(1) The food rate component established by WAC 388-835-0865;(2) The administration and operations rate component established by WAC 388-835-0870; and(3) The property rate comp…

The food rate component reimburses for the necessary and ordinary costs of a resident's bulk and raw food, dietary supplements, beverages with meals and nourishment between meals.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0630, filed 4/20/01, effective 5/21/01…

Compensation for administrative personnel is an allowable cost within the limits contained in this section:(1) For purposes of this section "compensation" means gross salaries, wages, and the applicable cost of fringe benefits made available to all employees. Compensation does no…

(1) A provider can enter into an agreement with an individual or firm to manage their ICF/ID facility as the provider's agent, however, the provider must submit a copy of the agreement to DSHS at least sixty days before it becomes effective.(2) Copies of any amendments to a manag…

Management fees are allowable costs only when there is:(1) A written management agreement that:(a) Creates a principal and/or agent relationship between the provider and the manager; and(b) Identifies the items, services, and activities that the manager will provide.(2) Documenta…

Providers must limit the amount of allowable fees for general management services (including corporate management fees, business entity management fees, board of director fees and overhead and indirect costs associated with providing general management services) to:(1) The maximu…

(1) A management fee paid to or for the benefit of a related organization is allowable if it does not exceed the lesser of:(a) The limits set out in WAC 388-835-0400; or(b) The lower of the related organization's actual cost of providing necessary resident care and training servi…

(1) For general administrative and management services, costs such as central office costs, owner compensation, and other fees or compensation, including joint facility costs, must include the overhead and indirect costs associated with providing general management services that …

(1) All necessary travel and housing expenses of nonresident staff working at a provider's ICF/ID facility are allowable costs if their visit does not exceed three weeks.(2) If the nonresident staff visit extends beyond three weeks, any travel and housing expenses are subject to …

(1) Bonuses paid to employees at a provider's ICF/ID facility are compensation.(2) Bonuses paid to central office employees are management costs that are subject to the management fee limits established in WAC 388-835-0405.(3) Bonuses paid to other employees not located at an ICF…

Fees paid to board of director members or corporations operating ICF/ID facilities are management costs subject to the management fee limits established in WAC 388-835-0405.[Statutory Authority: RCW 71A.12.030 and 44.04.280. WSR 15-09-069, § 388-835-0675, filed 4/15/15, effective…

(1) The administration and operations rate component includes reimbursement for the necessary and ordinary costs of:(a) Overall administration and management of the facility;(b) Operations and maintenance of the physical plant;(c) Resident transportation;(d) Dietary service (othe…

(1) The property rate component reimburses an ICF/ID facility for the necessary and ordinary costs of leases, depreciation, and interest.(2) It is the facility's most recent desk-reviewed cost per resident day.[Statutory Authority: RCW 71A.12.030 and 44.04.280. WSR 15-09-069, § 3…

DSHS pays a return on equity to proprietary providers.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0690, filed 4/20/01, effective 5/21/01.]

Calculating return on equity is a three-step process.(1) First, a provider's net equity is calculated using appropriate items from the provider's most recent cost report and relevant medicare rules and regulations. Note: Goodwill is not included in the calculation of net equity. …

If a provider's cost report covers less than a twelve-month period, annual resident days are estimated by using the actual resident days reported by the provider. The provider will then be paid a prospective rate per resident day. The prospective rate will either be the rate per …

(1) All information used to calculate return on equity is subject to field audit.(2) A field audit can be used to determine whether the providers reported equity exceeds the equity calculated according to medicare and the rules of this chapter.[Statutory Authority: RCW 71A.20.140…

DSHS can use the field audit results to recalculate the provider's return on equity rate for the reported rate period. Any payments received by the provider in excess of the return on equity rate must be refunded to DSHS as part of the settlement procedure established in WAC 388-…

DSHS limits its reimbursement rates to the following:(1) Reimbursement rates for providers cannot exceed the provider's customary charge to the general public for the type of service covered by the rate.(2) Public facilities rendering services for free or for a nominal charge wil…

(1) Except as otherwise provided in this chapter, settlements must be calculated at the lower of a provider's prospective reimbursement rate or audited allowable costs.(2) Each provider must complete a proposed preliminary settlement as part of their annual cost report. The due d…

(1) Within thirty days after submitting a preliminary or final settlement report to the provider, DSHS must pay any underpayments it owes.(2) If a provider received overpayments or payments in error from DSHS, they must refund those payments within thirty days after receiving the…

(1) A provider does not have to refund any disputed amounts if they, in good faith, disagree with a settlement report and file a timely request for an administrative or judicial hearing.(2) DSHS cannot withhold any amount owed by a provider, plus interest, from current payments d…

(1) Proposed preliminary settlements submitted by providers must use the prospective rate for the resident care and habilitation cost center at which the provider was paid during the report period, including any resident specific payment adjustments. Resident specific payments mu…

(1) DSHS has one hundred twenty days after receiving a proposed preliminary settlement to review it for accuracy and either accept or reject it.(2) If accepted, the proposed preliminary settlement becomes the preliminary settlement report.(3) If rejected, DSHS must issue a prelim…

A provider has thirty days after receiving a preliminary settlement report to contest it (see WAC 388-835-0950 and 388-835-0955). After thirty days, if the preliminary settlement report has not been contested, it cannot be reviewed.[Statutory Authority: RCW 71A.16.010, 71A.16.030…

(1) A final settlement must be by cost center and must fully substantiate all:(a) Disallowed costs;(b) Refunds;(c) Underpayments; or(d) Adjustments to cost reports, financial statements, other reports, and schedules submitted by the provider.(2) A final settlement report must use…

A provider has thirty days after receiving a final settlement report to contest it (see WAC 388-835-0950 and 388-835-0955). After thirty days, if the final settlement report has not been contested, it cannot be reviewed.[Statutory Authority: RCW 71A.16.010, 71A.16.030, 71A.12.030…

(1) If DSHS conducts an audit, it must issue a final settlement report to the provider after the audit process is completed. Completing the audit process includes exhausting or mutual terminating the reviews and/or appeals of audit findings or determinations.(2) If a provider, in…

The state facility settlement is determined to establish a state facility's final payment.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0765, filed 4/20/01, effective 5/21/01.]

The settlement must be calculated as follows:(1) If the state facility's allowable costs for the report period are greater than their interim payment, the amount owed to the facility is the allowable cost amount minus the interim payment.(2) If the state facility's allowable cost…

(1) The settlement is implemented in a two-step process consisting of the facility first submitting a proposed preliminary settlement to DSHS and DSHS responding with a final settlement report that it submits to the state facility.(2) The proposed preliminary settlement must be:(…

(1) DSHS must give written notification to each provider regarding DSHS's prospective reimbursement rate.(2) Unless specified at the time the reimbursement rate is issued, the rate will be effective from the first day of the month the rate is issued until a new rate becomes effec…

(1) Except for the situations described in subsection (3) and (4) of this section, DSHS prospective reimbursement rates are the maximum provider payment rates for those periods to which they apply.(2) DSHS does not grant rate adjustments for cost increases that are or were subjec…

(1) Any provider requesting a rate adjustment must submit a:(a) Financial analysis showing the increased cost and an estimate of the rate increase needed to cover the increased cost. The estimated rate increase must be computed according to allowable methods;(b) Written justifica…

(1) Providers that receive prospective rate increases may be required to submit quarterly reports showing how the additional funds were spent. If required, a quarterly report would begin on the first day of the month following the date the rate increase is granted.(2) If the addi…

(1) DSHS may adjust prospective rates resulting from cost report errors, computational errors or omissions by either DSHS or the provider.(2) In addition to adjusting the rate, DSHS must notify the provider in writing:(a) Regarding the nature and substance of each adjustment;(b) …

(1) If a provider discovers an error or omission that caused their cost report to be incorrect, the provider must submit amended cost report pages.(2) Amended cost report pages must be certified and accompanied by a written explanation why the amendment is necessary. Amendments a…

(1) No adjustment can be made to a rate more than:(a) One hundred twenty days after the field audit narrative and summary is sent to the provider; or(b) One hundred twenty days after a preliminary settlement becomes a final settlement.(2) A final settlement that is concluded with…

(1) Repayment (or starting repayment) of any amount owed to DSHS by a provider as a result of an error or omission rate adjustment must occur:(a) Within sixty days after the provider receives a rate adjustment notification from DSHS; or(b) According to a repayment schedule develo…

Each year before prospective reimbursement rates are set, DSHS will give all interested members of the public an opportunity to review and comment on the department's proposed rate setting methods and standards.[Statutory Authority: RCW 71A.20.140. WSR 01-10-013, § 388-835-0820, …