N.Y. Comp. Codes R. & Regs. tit. 14 § 841.12

Current through Register Vol. 46, No. 25, June 18, 2024

Section 841.12 - Capital costs

(a) This section shall apply to programs with Medicaid reimbursement calculated pursuant to this Part.

(b) No program or service governed by this Part shall have its own facility specific or program specific capital add-on. Instead, capital costs from submitted cost reports shall be reviewed by the Office and a regional, and not separately identifiable, capital component shall be built into the operating fees. Such fees shall constitute payment in full for all costs of operating the program, including capital costs, unless otherwise specified.

(c) Allowable Costs.

(1) Allowable capital costs means the costs to a program operated by an applicant with respect to the acquisition of real property estates, interests, and cooperative interests in realty, their design, construction, reconstruction, rehabilitation and improvement, original furnishings and equipment, site development, and appurtenances of a facility and as otherwise identified in this Title.

(2) Unless otherwise specified in this Part, costs of ownership of real property shall be allowable in the following categories; depreciation, interest, and closing costs on the purchase and financing of real property, including fees related to loans from the Dormitory Authority of the State of New York (DASNY). Providers should not report costs that were not actually incurred by the provider (e.g., debt service or fees on DASNY loans that were paid by the State of New York or refunded to the provider by the State of New York).

(3) Costs related to Dormitory Authority loans shall be allowable, unless otherwise paid by the State of New York, as follows:

(i) Interest cost accruing from Dormitory Authority mortgage loans pursuant to subdivision 13-d of section 5 of the Facilities Development Corporation Act, net of the portion of such interest cost attributable to operating costs, is an allowable cost. That portion of the interest cost attributable to allowable start-up costs is also allowable. That portion of the loan principal that is attributable to depreciable or amortizable costs, under the rules of HIM 15, is an allowable cost and shall be reimbursed as depreciation or amortization in accordance with any requirements and conditions. Any portion of the loan principal that is attributable to costs that are not depreciable or amortizable under the rules of HIM 15 is not allowable for reimbursement.

(ii) Fees imposed by the office and annual administrative fees imposed by the Dormitory Authority in connection with Dormitory Authority mortgage loans shall be allowable costs.

(iii) Interest payments on Dormitory Authority loans pursuant to this subdivision for capital indebtedness and start-up costs will be considered allowable where such interest expense results from approved capital indebtedness and/or start-up costs in accordance with this Title.

(iv) Interest payment on Dormitory Authority loans pursuant to the provisions of this Part are allowable in excess of the amount associated with the outstanding principal balance prior to refinancing only if the purpose of the additional debt is to acquire assets to be used for care of the persons served by the program and all other applicable requirements of this Part are met.

(v) The Office may recoup, in full or in part, the interest and fee reimbursement for DASNY loans attributable to a particular service. The office may also recoup, in full or in part, the annual depreciation or amortization reimbursement for costs financing through DASNY mortgage loans. The amount of Dormitory Authority mortgage loan interest, fee, depreciation, and amortization recoupments shall be equal to or less than the provider's actual reimbursement for such costs. In no case shall these recoupments exceed such reimbursement.

(d) Start-up costs. Upon the approval by the office, the approved start-up costs of new programs shall be amortized and reimbursed to the provider over a period not to exceed five years.

N.Y. Comp. Codes R. & Regs. Tit. 14 § 841.12

Amended New York State Register December 9, 2015/Volume XXXVII, Issue 49, eff. 11/20/2015

Adopted New York State Register January 26, 2022/Volume XLIV, Issue 04, eff. 1/26/2022