Section 75-04-05-08 - Financial reporting requirements1.Records.a. The provider agency shall maintain on the premises the required census records and financial information sufficient to provide for a proper state and federal audit or review. Data must be available for any cost on the statement of costs as of the audit date to fully support the statement item.b. If several programs are associated with a group and their accounting and reports are centrally prepared, additional fiscal information must be submitted for costs, undocumented at the reporting facility, with the statement of costs or provided prior to the audit or review of the facility. Accounting or financial information regarding related organizations must be readily available to substantiate cost.c. Each provider agency shall maintain, for a period of not less than six years following the date of submission of the statement of costs to the department, financial and statistical records of the period covered by such statement of costs which are accurate and in sufficient detail to substantiate the cost data reported. If an audit has begun, but has not been finally resolved, the financial and statutory records relating to the audit must be retained until final resolution. Each provider agency shall make such records available upon reasonable demand to representatives of the department or to the secretary of health and human services or representatives thereof.2.Census records.a. Adequate census records for all clients, regardless of payer source, must be prepared and maintained on a daily basis by the provider agency to allow for proper audit of the census data. The daily census records must include: (1) Identification of the client;(2) Entries for all days that services are offered, including the duration of service, and not just by exception; and(3) Identification of type of day, i.e., hospital, personal assistance retainer, or in-house day.b. A maximum of fifteen days per occurrence may be allowed for payment by the medical assistance program for hospital leave day in an intermediate care facility for individuals with intellectual disabilities. Hospital leave days in excess of fifteen consecutive days are not billable to the medical assistance program.c. A maximum of thirty therapeutic leave days per client per calendar year may be allowed for payment by the medical assistance program in an intermediate care facility for individuals with intellectual disabilities. Therapeutic leave days in excess of thirty per calendar year are not billable to the medical assistance program.d. A maximum of thirty personal assistance retainer days per client per calendar year may be allowed for payment by the medical assistance program in residential habilitation. Personal assistance retainer days in excess of thirty per calendar year are not billable to the medical assistance program.3.Accounting and reporting requirements.a. The accounting system must be double entry.b. The basis of accounting for reporting purposes must be accrual in accordance with generally accepted accounting principles. Ratesetting procedures will prevail if conflicts occur between ratesetting procedures and generally accepted accounting principles.c. To properly facilitate auditing, the accounting system must be maintained in a manner that will allow cost accounts to be grouped by cost center and readily traceable to the statement of costs.d. A provider agency who offers intermediate care facility for individuals with intellectual disability services may have an independent certified public accountant or the department complete an audit of the provider agency during the statement of costs year of each year to ensure the provider agency is in compliance with applicable state and federal regulations.e. For each provider agency that chose to have an independent certified public accountant complete a department compliance audit report in compliance with state and federal regulations, shall provide to the department no later than October first of each year: (1) A statement of costs for the statement of cost year on forms prescribed by the department.(2) A copy of an audited report of the provider agency's financial records from an independent certified public accountant. The audit must be conducted in accordance with generally accepted auditing standards. The information must be reconciled to each provider agency's statement of costs and must include: (a) A statement of assets and liabilities;(b) An operations statement;(c) A statement disclosing contract income and client wages;(d) A statement of client fees or payments and their distribution, including private pay individuals;(e) A statement of the assets and liabilities of any related organizations;(f) A statement of ownership for the provider agency, including the name, address, and proportion of ownership of each owner; [1] If a privately held or closely held corporation or partnership has an ownership interest in the provider agency, the provider agency shall report the name, address, and proportion of ownership of all owners of the corporation or partnership who have an ownership interest of five percent or more, except that any owner whose compensation or portion of compensation is claimed in the provider agency's statement of costs must be identified regardless of the proportion of ownership interest; or[2] If a publicly held corporation has an ownership interest of fifteen percent or more in the provider agency, the provider agency shall report the name, address, and proportion of ownership of all owners of the publicly held corporation who have an ownership interest of fifteen percent or more;(g) Copies of leases, purchase agreements, appraisals, financing arrangements, and other documents related to the lease or purchase of the provider agency's facilities or a certification the content of the document remains unchanged since the most recent statement given pursuant to this subsection;(h) Supplemental information reconciling the costs on the financial statements with costs on the statement of costs; and(i) Independent audit report must comply with this chapter and follow: [1] Medicare and Medicaid guidance and provider payment manual;[2] Government auditing standards;[3] North Dakota Century Code chapters 25-01.2 and 25-04;[4] Titles 2, 42, and 45, Code of Federal Regulations, American institution of certified public accountants, financial accounting standards board, and government accounting standards board rules and regulations; and[5] All other applicable state and federal regulations.(3) The following information upon request by the department:(a) Copies of leases, purchase agreements, and other documents related to the acquisition of equipment, goods, and services claimed as allowable costs;(b) Audited financial statements for any home or corporate office organization, excluding individual developmental disabilities provider agencies of a chain organization owned in whole or in part by an individual or entity that has an ownership interest in the facility, together with supplemental information that reconciles costs on the financial statements to costs for the report year; and(c) Audited financial statements for every organization the facility conducts business and is owned in whole or in part by an individual or entity that has an ownership interest in the facility, together with supplemental information that reconciles costs on the financial statements to costs for the report year.f. For each provider agency that chose not to have an independent certified public accountant complete a department compliance audit report in compliance with state and federal regulations, shall provide to the department no later than October first of each year: (1) A statement of costs for the statement of cost year on forms prescribed by the department;(2) Except for state-owned facilities and provider agencies that do not have an independent audit completed annually, a copy of an audited report of the provider agency's financial records from an independent certified public accountant. The audit must be conducted in accordance with generally accepted auditing standards. The information must be reconciled to each provider agency's statement of costs;(3) A statement of assets and liabilities;(4) An operations statement;(5) A statement disclosing contract income and client wages;(6) A statement of client fees or payments and their distribution, including private pay individuals;(7) A statement of the assets and liabilities of any related organizations;(8) A statement of ownership for the provider agency, including the name, address, and proportion of ownership of each owner; (a) If a privately held or closely held corporation or partnership has an ownership interest in the provider agency, the provider agency shall report the name, address, and proportion of ownership of all owners of the corporation or partnership who have an ownership interest of five percent or more, except that any owner whose compensation or portion of compensation is claimed in the provider agency's statement of costs must be identified regardless of the proportion of ownership interest; or(b) If a publicly held corporation has an ownership interest of fifteen percent or more in the provider agency, the provider agency shall report the name, address, and proportion of ownership of all owners of the publicly held corporation who have an ownership interest of fifteen percent or more;(9) Copies of leases, purchase agreements, appraisals, financing arrangements, and other documents related to the lease or purchase of the provider agency's facilities or a certification the content of the document remains unchanged since the most recent statement given pursuant to this subsection;(10) Supplemental information reconciling the costs on the financial statements with costs on the statement of costs; and(11) The following information upon request by the department:(a) Copies of leases, purchase agreements, and other documents related to the acquisition of equipment, goods, and services claimed as allowable costs;(b) Audited financial statements for any home or corporate office organization, excluding individual developmental disabilities provider agencies of a chain organization owned in whole or in part by an individual or entity that has an ownership interest in the facility, together with supplemental information that reconciles costs on the financial statements to costs for the report year; and(c) Audited financial statements for every organization the facility conducts business and is owned in whole or in part by an individual or entity that has an ownership interest in the facility, together with supplemental information that reconciles costs on the financial statements to costs for the report year.g. A statement of costs must contain the actual costs, adjustments for nonallowable costs, and units of service. The mailing of a statement of costs by registered mail, return receipt requested, ensures documentation of the filing date.h. Adjustments made by the audit unit, to determine allowable cost, though not meeting the criteria of fraud or abuse on their initial identification, may, if repeated on future cost filings, be considered as possible fraud or abuse.i. The provider agency shall make all adjustments, allocations, and projections necessary to arrive at allowable costs. The department may reject any statement of costs when the information filed is incomplete or inaccurate. If a statement of costs is rejected, the department may reduce the current payment rate to ninety-five percent of its most recently established rate until the information is completely and accurately filed.4.Auditing. In order to properly validate the accuracy and reasonableness of cost information reported by the provider agency, the department shall provide for audits as necessary. a. A provider agency shall submit its statement of costs by October first of the statement of cost year.b. A provider agency may request, and the department may grant, one thirty-day extension of the due date of the statement of costs for good cause. (1) If a provider agency fails to file the required statement of costs on or before the due date, the department may reduce the current payment rate to ninety-five percent of its most recently established rate.(2) Reinstatement of the rate must occur on the first of the month beginning after receipt of the required information, but is not retroactive.c. The preliminary audit report shall be submitted to the provider agency no later than six months after the department receives the provider agency's statement of costs. The provider agency must be notified by facsimile transmission or electronic mail.d. The provider agency may submit information, within thirty days after notification, to explain why the provider agency believes the desk adjustment is incorrect. The department shall review the information and make appropriate adjustments.e. The final audit report shall be submitted to the provider agency within sixty days of the department's receipt of the provider agency's response.f. Provider agency shall submit requests for information and responses to the department in writing. In computing any period of time prescribed or allowed in this subsection, the day of the act, event, or default from which the designated period of time begins to run may not be included. The last day of the period so computed must be included, unless it is a Saturday, a Sunday, or a legal holiday, in which event the period runs until the end of the next day which is not a Saturday, a Sunday, or a legal holiday. In determining whether the deadlines described in subdivision c, d, or e have been met, the department may not count any day that sufficient information has not been timely provided by a provider agency when the provider agency has shown good cause for its inability to provide the required information within the time periods prescribed in any one of those subdivisions.5.Penalties for false reports.a. A false report is when a provider agency knowingly supplies inaccurate or false information in a required statement of costs and supporting documentation that results in inaccurate costs.b. If a false report is received, the department may:(1) Place the provider agency's license on restricted status as defined in chapter 75-04-01;(2) Terminate the department's agreement with the provider agency;(3) Refer to law enforcement for investigation and prosecution under applicable state or federal law; or(4) Use any combination of the foregoing actions.N.D. Admin Code 75-04-05-08
Effective July 1, 1984; amended effective June 1, 1985; June 1, 1995; August 1, 1997; July 1, 2001; May 1, 2006.Amended by Administrative Rules Supplement 2017-363, January 2017, effective 1/1/2017.Amended by Administrative Rules Supplement 368, April 2018, effective 4/1/2018.Amended by Administrative Rules Supplement 376, April 2020, effective 4/1/2020.General Authority: NDCC 25-01.2-18, 50-06-16
Law Implemented: NDCC 25-18-03, 50-24.1-01