A cost incurred by a county nursing facility is an allowable cost if the cost was incurred in the course of providing nursing facility services and one of the following applies:

1. (1) The cost is allowable pursuant to the Medicare Provider Reimbursement Manual (CMS Pub. 15-1).
2. (2) The cost is not allowable under the CMS Pub. 15-1 but is allowable as a net operating cost under Chapter 1187 (relating to nursing facility services).
3. (3) The cost is identified as an allowable county nursing facility cost in the Commonwealth’s approved State Plan.