WAC 388-96-010
Definitions. Unless the context
indicates otherwise, the following definitions apply in this
chapter.
"Accounting" means activities providing information,
usually quantitative and often expressed in monetary units,
for:
(1) Decision making;
(2) Planning;
(3) Evaluating performance;
(4) Controlling resources and operations; and
(5) External financial reporting to investors, creditors,
regulatory authorities, and the public.
"Administration and management" means activities used to
maintain, control, and evaluate the efforts and resources of
an organization for the accomplishment of the objectives and
policies of that organization.
"Allowable costs" means documented costs that are
necessary, ordinary, and related to the care of medicaid
recipients, and are not expressly declared nonallowable by
this chapter or chapter 74.46 RCW. Costs are ordinary if they
are of the nature and magnitude that prudent and cost
conscious management would pay.
"Allowable depreciation costs" means depreciation costs
of tangible assets, whether owned or leased by the contractor,
meeting the criteria specified in RCW 74.46.330.
"Assignment of contract" means:
(1) A new nursing facility licensee has elected to care
for medicaid residents;
(2) The department finds no good cause to object to
continuing the medicaid contract at the facility; and
(3) The new licensee accepts assignment of the
immediately preceding contractor's contract at the facility.
"Capitalized lease" means a lease required to be recorded
as an asset and associated liability in accordance with
generally accepted accounting principles.
"Cash method of accounting" means a method of accounting
in which revenues are recorded when cash is received, and
expenditures for expense and asset items are not recorded
until cash is disbursed for those expenditures and assets.
"Change of ownership" means a substitution, elimination,
or withdrawal of the individual operator or operating entity
contracting with the department to deliver care services to
medical care recipients in a nursing facility and ultimately
responsible for the daily operational decisions of the nursing
facility.
(1) Events which constitute a change of ownership
include, but are not limited to, the following:
(a) Changing the form of legal organization of the
contractor, e.g., a sole proprietor forms a partnership or
corporation;
(b) Transferring ownership of the nursing facility
business enterprise to another party, regardless of whether
ownership of some or all of the real property and/or personal
property assets of the facility are also transferred;
(c) Dissolving of a partnership;
(d) Dissolving the corporation, merging the corporation
with another corporation, which is the survivor, or
consolidating with one or more other corporations to form a
new corporation;
(e) Transferring, whether by a single transaction or
multiple transactions within any continuous twenty-four-month
period, fifty percent or more of the stock to one or more:
(i) New or former stockholders; or
(ii) Present stockholders each having held less than five
percent of the stock before the initial transaction;
(f) Substituting of the individual operator or the
operating entity by any other event or combination of events
that results in a substitution or substitution of control of
the individual operator or the operating entity contracting
with the department to deliver care services; or
(g) A nursing facility ceases to operate.
(2) Ownership does not change when the following, without
more, occurs:
(a) A party contracts with the contractor to manage the
nursing facility enterprise as the contractor's agent, i.e.,
subject to the contractor's general approval of daily
operating and management decisions; or
(b) The real property or personal property assets of the
nursing facility change ownership or are leased, or a lease of
them is terminated, without a substitution of individual
operator or operating entity and without a substitution of
control of the operating entity contracting with the
department to deliver care services.
"Charity allowance" means a reduction in charges made by
the contractor because of the indigence or medical indigence
of a patient.
"Component rate allocation(s)" means the initial
component rate allocation(s) of the rebased rate for a rebase
period effective July 1. If a month and a day, other than
July 1, with a year precedes "component rate allocation(s),"
it means the initial component rate allocation(s) of the
rebased rate of the rebase period has been amended or updated
effective the date that precedes it, e.g., October 1, 1999
direct care component rate allocation.
"Contract" means an agreement between the department and
a contractor for the delivery of nursing facility services to
medical care recipients.
"Cost report" means all schedules of a nursing facility's
cost report submitted according to the department's
instructions.
"Courtesy allowances" means reductions in charges in the
form of an allowance to physicians, clergy, and others, for
services received from the contractor. Employee fringe
benefits are not considered courtesy allowances.
"Donated asset" means an asset the contractor acquired
without making any payment for the asset either in cash,
property, or services. An asset is not a donated asset if the
contractor:
(1) Made even a nominal payment in acquiring the asset;
or
(2) Used donated funds to purchase the asset.
"Equity capital" means total tangible and other assets
which are necessary, ordinary, and related to patient care
from the most recent provider cost report minus related total
long-term debt from the most recent provider cost report plus
working capital as defined in this section.
"Fiscal year" means the operating or business year of a
contractor. All contractors report on the basis of a
twelve-month fiscal year, but provision is made in this
chapter for reports covering abbreviated fiscal periods. As
determined by context or otherwise, "fiscal year" may also
refer to a state fiscal year extending from July 1 through
June 30 of the following year and comprising the first or
second half of a state fiscal biennium.
"Gain on sale" means the actual total sales price of all
tangible and intangible nursing facility assets including, but
not limited to, land, building, equipment, supplies, goodwill,
and beds authorized by certificate of need, minus the net book
value of such assets immediately prior to the time of sale.
"Intangible asset" is an asset that lacks physical
substance but possesses economic value.
"Interest" means the cost incurred for the use of
borrowed funds, generally paid at fixed intervals by the user.
"Multiservice facility" means a facility at which two or
more types of health or related care are delivered, e.g., a
hospital and nursing facility, or a boarding home and nursing
facility.
"Nonadministrative wages and benefits" means wages,
benefits, and corresponding payroll taxes paid for
nonadministrative personnel, not to include administrator,
assistant administrator, or administrator-in-training.
"Nonallowable costs" means the same as "unallowable
costs."
"Nonrestricted funds" means funds which are not
restricted to a specific use by the donor, e.g., general
operating funds.
"Nursing facility occupancy percentage" is determined by
multiplying the number of calendar days for the cost report
period by the number of licensed beds for the same cost report
period. Then, the nursing facility's actual resident days for
the same cost report period is divided by the product. When
the nursing facility under chapter 70.38 RCW reinstates or
reduces the number of licensed beds, then under WAC 388-96-708
or 388-96-709 the number of licensed beds after reinstatement
or reduction will be used. In all determinations that require
a nursing facility occupancy percentage, the department will
use the greater of either a nursing facility's occupancy
percentage or eighty-five percent.
"Per diem (per patient day or per resident day) costs"
means total allowable costs for a fiscal period divided by
total patient or resident days for the same period.
"Prospective daily payment rate" means the rate assigned
by the department to a contractor for providing service to
medical care recipients prior to the application of settlement
principles.
"Recipient" means a medicaid recipient.
"Related care" includes:
(1) The director of nursing services;
(2) Activities and social services programs;
(3) Medical and medical records specialists; and
(4) Consultation provided by:
(a) Medical directors; and
(b) Pharmacists.
"Relative" includes:
(1) Spouse;
(2) Natural parent, child, or sibling;
(3) Adopted child or adoptive parent;
(4) Stepparent, stepchild, stepbrother, stepsister;
(5) Father-in-law, mother-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law;
(6) Grandparent or grandchild; and
(7) Uncle, aunt, nephew, niece, or cousin.
"Start up costs" means the one-time preopening costs
incurred from the time preparation begins on a newly
constructed or purchased building until the first patient is
admitted. Start up costs include:
(1) Administrative and nursing salaries;
(2) Utility costs;
(3) Taxes;
(4) Insurance;
(5) Repairs and maintenance; and
(6) Training costs.
Start up costs do not include expenditures for capital
assets.
"Total rate allocation" means the initial rebased rate
for a rebase period effective July 1. If a month and a day,
other than July 1, with a year precedes "total rate
allocation," it means the initial rebased rate of the rebase
period has been amended or updated effective the date that
precedes it, e.g., October 1, 1999 direct care component rate
allocation.
"Unallowable costs" means costs which do not meet every
test of an allowable cost.
"Uniform chart of accounts" means a list of account
titles identified by code numbers established by the
department for contractors to use in reporting costs.
"Vendor number" means a number assigned to each
contractor delivering care services to medical care
recipients.
[Statutory Authority: RCW 74.46.800. 01-12-037, §
388-96-010, filed 5/29/01, effective 6/29/01. Statutory
Authority: Chapter 74.46 RCW, 1999 c 376 § 3 amending c 309 §
207. 99-24-084, § 388-96-010, filed 11/30/99, effective
12/31/99. Statutory Authority: RCW 74.46.800. 98-20-023, §
388-96-010, filed 9/25/98, effective 10/1/98; 97-17-040, §
388-96-010, filed 8/14/97, effective 9/14/97. Statutory
Authority: RCW 74.46.800 and 1995 1st sp.s. c 18. 95-19-037
(Order 3896), § 388-96-010, filed 9/12/95, effective 10/13/95.
Statutory Authority: RCW 74.46.800. 94-12-043 (Order 3737),
§ 388-96-010, filed 5/26/94, effective 6/26/94. Statutory
Authority: RCW 74.46.800 and 74.09.120. 93-19-074 (Order
3634), § 388-96-010, filed 9/14/93, effective 10/15/93. Statutory Authority: RCW 74.09.120. 91-22-025 (Order 3270),
§ 388-96-010, filed 10/29/91, effective 11/29/91. Statutory
Authority: RCW 79.09.120 [74.09.120] and 74.46.800. 90-09-061 (Order 2970), § 388-96-010, filed 4/17/90, effective
5/18/90. Statutory Authority: 1987 c 476. 88-01-126 (Order
2573), § 388-96-010, filed 12/23/87. Statutory Authority:
RCW 74.09.120 and 74.46.800. 85-13-060 (Order 2240), §
388-96-010, filed 6/18/85. Statutory Authority: RCW 74.09.120. 84-24-050 (Order 2172), § 388-96-010, filed
12/4/84. Statutory Authority: RCW 74.46.800. 84-12-039
(Order 2105), § 388-96-010, filed 5/30/84. Statutory
Authority: RCW 74.09.120. 83-19-047 (Order 2025), §
388-96-010, filed 9/16/83; 82-21-025 (Order 1892), §
388-96-010, filed 10/13/82; 81-22-081 (Order 1712), §
388-96-010, filed 11/4/81. Statutory Authority: RCW 74.09.120 and 74.46.800. 81-06-024 (Order 1613), §
388-96-010, filed 2/25/81. Statutory Authority: RCW 74.09.120. 80-09-083 (Order 1527), § 388-96-010, filed
7/22/80; 79-04-061 (Order 1381), § 388-96-010, filed 3/28/79. Statutory Authority: RCW 74.08.090 and 74.09.120. 78-06-080
(Order 1300), § 388-96-010, filed 6/1/78; Order 1262, §
388-96-010, filed 12/30/77.]