6513 EXCLUSIONS FROM ALLOWABLE COSTS

6513.1 The following categories of expense shall be excluded from allowable operating costs because they are not normally incurred in providing resident care:

1. (a) Fund raising expenses in excess of ten percent (10%) of the amount raised;
2. (b) Parties and social activities not related to resident care;
3. (c) Personal telephone, radio, and television services;
4. (d) Gift, flower and coffee shop expenses;
5. (e) Vending machines;
6. (f) Interest expenses and penalties due to late payment of bills or taxes, or for licensure violations; and
7. (g) Prescription drug costs.

6513.2 The following expenditures shall reduce allowable costs:

1. (a) The greater of the revenues generated from employee and guest meals or the cost of the meals;
2. (b) The greater of the revenues generated from rental space in the facility or the cost of the rental space;
3. (c) Purchase discounts and allowances;
4. (d) Investment income for unrestricted funds to the extent that it exceeds interest expense on investments;
5. (e) Recovery of an insured loss;
6. (f) Grants, gift and income from endowments designated by the donor for specific operating expenses; and
7. (g) Any other income or expense item determined to reduce allowable costs pursuant to the Medicare Principles of Reimbursement.

SOURCE: Final Rulemaking published at 53 DCR 1370 (February 24, 2006).