Section 1181.234. General administration allowance

(a) The allowable cost of general administration will be limited. The allowable cost of general administration for each level of care will be determined so that all other allowable costs, excluding depreciation and interest on capital indebtedness, equal no less than 88% of the allowable net operating costs, except as provided in this section.

(b) General administration expenses may include, but are not limited to: administrative salaries, including fringe benefits and payroll taxes; home office expenses; compensation of owners, officers or persons other than facility employes; personnel; procurement; accounting; auditing; management consultants; office services and supplies; telephone; licenses; travel; association dues; and legal costs, including attorney’s fees.

(c) Home office allocations and management fees are subject to the following conditions and limitations:

(1) Home office allocations and management fees between related parties shall be reported without any markup by the provider.

(2) Costs, such as those related to nonworking officers or officers’ life insurance, which are not allowable, may not be included in home office allocations or management fees.

(3) Components of the home office and management costs shall be documented through work time records. If documentation of these costs is not provided to the Department’s auditors upon request, the total home office and management costs will be disallowed.

(4) Home office allocations, including depreciation and interest, shall be charged to the general administration line on the cost report.

(d) A facility providing more than one level of care shall allocate the total administrative costs to each level of care on the basis of a percentage of the costs of each level of care to the total costs.

The provisions of this § 1181.234 adopted August 5, 1983, effective July 1, 1983, 13 Pa.B. 2402.

Notation

Notes of Decisions

Where petitioner failed to establish percentage of Office of Public Information (OPI) expense attributable to newsletters distributed to facility residents and immediate family, hearing officer did not err in concluding OPI costs were not related to patient case and were not reimbursable related to patient case. Tressler Lutheran Service Associates v. Department of Public Welfare, 514 A.2d 661 (Pa. Cmwlth. 1986).

Cross References

This section cited in 55 Pa. Code § 1181.251 (relating to contracted management services).