Sec. 10.09.10.21. Cost Reporting

A. The provider shall include, for purposes of cost finding, direct and indirect costs applicable to recipient care.

B. The provider shall specifically identify, in the cost report, costs associated with related organizations.

C. The provider shall maintain adequate financial records and statistical data according to generally accepted accounting principles and procedures. This system of accounts will provide as a minimum:

(1) Maintenance of a chronological cash receipts and disbursements journal in sufficient detail to show the exact nature of the receipts and disbursements;

(2) Proper reference to supporting invoice, voucher, or other form of original evidence;

(3) Maintenance of an appropriate time reporting system for all personnel and proper payroll authorizations and vouchers;

(4) Provision for payment by check (when financial transactions involve numerous small expenditures, an imprest petty cash fund may be established, provided adequate supporting vouchers are maintained);

(5) Maintenance of records on all assets capitalized and depreciation on the assets;

(6) Maintenance of appropriate records of patient days by level of care;

(7) Maintenance of records on an accrual basis;

(8) Maintenance of a daily midnight bed census by recipient name in a form prescribed by the Department (use of the prescribed form may be waived by the Department or its designee where a provider demonstrates the ability to maintain a superior system of census information); and

(9) Maintenance of other records as required by the Department.

D. The provider shall keep all records available for inspection or audit by the Department or its designee at any reasonable time during normal business hours. Upon request by the Department or its designee, documentation of costs shall be made available by the provider during the course of verification. The provider shall have 30 days from the date of the request to provide documentation for undocumented costs. Costs for which documentation is not provided within the 30 days shall be deemed not allowable. The Department may grant, in writing, an extension of time upon written demonstration by the provider of good cause. Records shall be retained for 6 years after the month the cost report to which the materials apply is filed with the Department or its designee.

E. Financial and Statistical Data Required.

(1) The provider shall submit to the Department or its designee, in the form prescribed, financial and statistical data within 3 months after the end of the provider's fiscal year unless the Department grants the provider an extension or the provider discontinues participation in the Program.

(2) If reports are not received within 3 months and an extension has not been granted, the Department shall reduce the per diem rate by 3 percent for services provided during the calendar month after the month in which the report is due and any subsequent calendar month through the month during which the report has been submitted.

(3) If a provider discontinues participation, financial and statistical data shall be submitted to the Department within 45 days after the effective date of termination.

(4) A 1-month extension will be granted upon written request in advance by the provider. The Department may not grant an extension longer than 1 month unless the delay in filing the report has been caused by fire, flood, or act of God, and an extension is not allowed past March 31 after the calendar year during which the provider's fiscal year ended unless the report cannot be submitted by that date due to fire, flood, or act of God.

F. When a report is not submitted by the last day of the sixth month after the end of the provider's fiscal year, the Department shall impose one or more sanctions as provided for in Regulation .33 of this chapter.

G. For purposes of §§E and F of this regulation, reports are considered received when the submitted reports are completed according to instructions issued by the Department or its designee.

H. Billing time limitations for claims submitted pursuant to this chapter are set forth in COMAR 10.09.36.

I. The Department, at its option, may request an additional cost report from a provider when a:

(1) Change in the location of a provider's operation occurs; or

(2) Significant change occurs that would affect the appraised value of a facility, such as an increase in the number of beds by more than 10 percent.

J. If the Department exercises its option under the provisions of §I of this regulation, the period covered by the two reports in the specific provider’s fiscal year shall be divided as follows:

(1) Beginning of fiscal year to date of change; and

(2) Date of change through the end of the fiscal year.

K. Except as indicated in §L of this regulation, administrative and routine, other patient care, and capital costs incurred by the provider exclusively for providing ventilator care are not allowed in these cost centers, but are allowable nursing service costs.

L. For any provider who provides ventilator care on 50 percent or more of its Maryland Medical Assistance days of care, all costs incurred by the provider exclusively for providing ventilator care are not allowable costs.

M. A provider which renders a minimal number of Maryland Medical Assistance days of care may not be subject to cost reporting or field verification requirements for a specified fiscal period when the following criteria are met:

(1) The provider bills the Maryland Medical Assistance Program for less than 1,000 Maryland Medical Assistance days of care during the provider's fiscal period; and

(2) The provider gives notice to the Program within 3 months after the end of the provider's fiscal period of the intent to not file a cost report for that period.

N. The notice required in §M(2) of this regulation shall include:

(1) An assurance that the provider billed the Medical Assistance Program for less than 1,000 days of care in the fiscal period; and

(2) A statement that the provider agrees to accept as final reimbursement the average rate paid to all other nursing facilities in the facility’s geographic region identified in Regulation .30A of this chapter, minus the quality assessment add-on for facilities that are exempt from Nursing Facility Quality Assessment identified in COMAR 10.01.20.

O. A provider that does not incur costs for over-the-counter drugs on behalf of its private pay residents may adjust its report in order to ensure final reimbursement that more accurately reflects its costs for Medicaid days of care. The provider shall divide its costs by Medicaid and other government-paid days, multiply the quotient by its private pay days of care, and report the product as an adjustment to its over-the-counter drug costs.