Section 405 IAC 1-12-20 - Allowable costs; calculation of allowable owner or related party compensation; wages; salaries; fees; fringe benefitsAuthority: IC 12-15-1-10; IC 12-15-21-2
Affected: IC 12-13-7-3; IC 12-15
Sec. 20.
(a) Compensation for owner, related party, management, general line personnel, and consultants who perform management functions, or any individual or entity rendering services above the department head level shall be subject to the annual limitations described in this section. All compensation received by the parties as described in this subsection shall be reported and separately identified on the financial report form even though such payment may exceed the limitations. This compensation is allowed to cover costs for all administrative, policy making, decision making, and other management functions above the department head level. This includes wages, salaries, and fees for owner, administrator, assistant administrator, individuals within management, contractors, and consultants who perform management functions, as well as any other individual or entity performing such tasks.(b) The maximum amount of owner, related party, management compensation for the parties identified in subsection (a) shall be the lesser of the amount under subsection (d), as updated by the office on July 1 of each year by determining the average rate of change of the most recent twelve (12) quarters of the Gross National Product Implicit Price Deflator, or the amount of patient or resident related wages, salaries, or fees actually paid or withdrawn which were properly reported to the Internal Revenue Service as wages, salaries, fringe benefits, expenses, or fees. If liabilities are established, they shall be paid within seventy-five (75) days after the end of the accounting period or such costs shall be disallowed.(c) In addition to wages, salaries, and fees paid to owners under subsection (b), the office will allow up to twelve percent (12%) of the appropriate schedule for fringe benefits, business expenses charged to an operation, and other assets actually withdrawn that are patient or resident related. These expenses include fringe benefits that do not meet nondiscriminatory requirements of the Internal Revenue Code, entertainment, travel, or continuing education. Other assets actually withdrawn include only those items that were actually accrued and subsequently paid during the cost reporting period in which personal services were rendered and reported to the Internal Revenue Service as fringe benefits, expenses, or fees. If liabilities are established, they shall be paid within seventy-five (75) days after the end of the accounting period or such costs shall be disallowed.(d) The owner, related party, and management compensation and expense limitation per operation effective July 1, 1993, shall be as follows: Owner and Management Compensation | Owner's Expense |
Beds | Allowance | (12% × bed allowance) |
10 | $18,527 | $2,223 |
20 | $24,717 | $2,966 |
30 | $30,887 | $3,706 |
40 | $37,049 | $4,446 |
50 | $43,241 | $5,189 |
60 | $46,948 | $5,634 |
70 | $50,657 | $6,079 |
80 | $54,362 | $6,523 |
90 | $58,055 | $6,967 |
100 | $61,763 | $7,412 |
110 | $66,731 | $8,007 |
120 | $71,663 | $8,600 |
130 | $76,628 | $9,195 |
140 | $81,546 | $9,786 |
150 | $86,496 | $10,380 |
160 | $91,427 | $10,971 |
170 | $96,378 | $11,565 |
180 | $101,313 | $12,157 |
190 | $106,262 | $12,751 |
200 | $111,196 | $13,343 |
200 and over | $111,196 plus $225 per bed over 200 | $13,343 plus $27 per bed over 200 |
This subsection applies to each provider of a certified Medicaid operation. The unused portions of the allowance for one (1) operation shall not be carried over to other operations.
Office of the Secretary of Family and Social Services; 405 IAC 1-12-20; filed Jun 1, 1994, 5:00p.m.: 17 IR 2327; readopted filed Jun 27, 2001, 9:40 a.m.: 24 IR 3822; readopted filed Sep 19, 2007, 12:16 p.m.: 20071010-IR-405070311RFA; readopted filed Oct 28, 2013, 3:18 p.m.: 20131127-IR-405130241RFAFiled 10/13/2017, 12:09 p.m.: 20171108-IR-405160327FRAReadopted filed 5/30/2023, 11:54 a.m.: 20230628-IR-405230292RFA