1. (a) The proprietary fee cost element shall be calculated for each CSF as follows:

   1. (1) Identify the amount of the allowable, unrecovered basis for depreciation of all fixed assets to determine the total net fixed asset value;
   2. (2) Divide the total net fixed asset value by the average number of residents residing at the facility during the reporting period to get total net fixed asset value per resident.

2. (b) Using generally accepted statistical techniques:

   1. (1) Analyze total net fixed asset value per resident to determine if there are any significant differences by:

      1. (A) Service level;
      2. (B) Operation type;
      3. (C) Facility size; and
      4. (D) Geographic location.
   2. (2) Group together those with a significant similarity, except geographic locations;
   3. (3) Group together those that are similar by geographic location, whether or not the differences between locations are significant;
   4. (4) Where distinct groups have been identified in subsections (2) and (3) above, determine the median total net fixed asset value per resident for each group.
3. (c) Determine the pre-tax rate of return on assets for residential care facilities (Standard Industrial Code 8361) using Dun and Bradstreet data reports; and

4. (d) For each median identified in subsection (b)(4) above, calculate the monthly amount for the proprietary fee cost element utilizing the following formula:

   PROPRIETARY FEE

   =

   Median total net fixed asset value per consumer x [rate of return identified in (c) above]

   the number of months in the reporting period

Note: Authority cited: Section 4681.1, Welfare and Institutions Code. Reference: Section 4681.1, Welfare and Institutions Code.

History

1. New section filed 1-14-91; operative 2-13-91 (Register 91, No. 14).

2. Amendment of subsection (d) filed 11-23-94; operative 11-23-94 (Register 94, No. 47).

3. Change without regulatory effect amending subsections (b)(4) and (d) filed 6-19-95 pursuant to section 100, title 1, California Code of Regulations (Register 95, No. 25).