OAR 410-147-0480: Cost Statement Instructions

(1) The Division of Medical Assistance Programs (Division) requires federally qualified health centers (FQHC) to submit Cost Statements (DMAP 3027). (2) Rural health clinics (RHCs) can choose to submit either their Medicare Cost Report or the Cost Statement (DMAP 3027). If the RHC files a Medicare Cost Report, the Division may request additional information. (3) The Division reimburses some services, items and supplies fee-for-service, outside of a FQHC or RHC’s Prospective Payment System (PPS) encounter rate. For this reason, clinics must exclude the costs for the following items from the cost statement: (a) Contraceptive supplies and contraceptive medications (see OAR 410-147-0280); (b) Pharmacy. Requires separate enrollment, refer to OAR chapter 410, division 121, Pharmaceutical Services Program Rulebook for specific information; (c) Durable medical equipment and supplies. Requires separate enrollment, refer to OAR chapter 410, division 122, Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS); (d) Targeted case management (TCM) services. Requires separate enrollment, see OAR 410-147-0610, and refer to OAR chapter 410, division 138, Targeted Case Management for specific information; and. (e) Comprehensive environmental lead investigation (refer to OAR 410-130-0245, Early and Periodic Screening, Diagnostic and Treatment Program). (4) Payment for services provided by FQHCs and RHCs is in accordance with 42 USC 1396a (bb). In general, a Prospective Payment System (PPS) encounter rate is calculated on a per visit basis that is equal to the average of reasonable and allowable costs incurred by a clinic for furnishing services included in the State Plan under Title XIX and XXI of the Social Security Act. The rate is calculated by dividing the total costs incurred by an FQHC or RHC for furnishing services by the total number of clinic encounters as defined in OAR 410-147-0500. A clinic must submit a Cost Statement (DMAP 3027) to the Division: (a) For established clinics during an adjustment to the clinic’s rate based on a change in scope of clinic services (see OAR 410-147-0360); (b) For new clinics (see OAR 410-147-0360); or (c) If there is a change of ownership, the new owner can submit the Cost Statement (DMAP 3027) or Medicare Cost Report within 30 days from the date of change of ownership to have a new PPS encounter rate calculated (see also OAR 410-147-0320 (8). (5) The Cost Statement (DMAP 3027) must include all documents required by OAR 410-147-0320. (6) Each section must be completed if applicable. (7) Page 1 — Statistical Information: (a) Enter the full name of the FQHC or RHC, the address and telephone number, the fiscal reporting period, legacy Division provider number, current National Provider Identifier (NPI) numbers and associated taxonomy code(s); the name of the persons or organizations having legal ownership of the FQHC or RHC; and all provider and health care practitioners as defined on the DMAP 3027 Cost Statement. (b) The Cost Statement (DMAP 3027) must be prepared, signed and dated by both the FQHC or RHC accountant and an authorized responsible officer. (8) Page 2 — Part A — FQHC or RHC Practitioner Staff and Visits: (a) Full Time Equivalent (FTE) Personnel: List the total number of staff by position; (b) Encounters: List the number of on-site and off-site encounters by staff (see OAR 410-147-0500, Total Encounters for Cost Reports). Exclude the following types of encounters from your total encounters: (A) Out-stationed outreach workers; (B) Administration; and (C) Support staff, or any staff members who do not meet the criteria of OAR 410-147-0120(6) or the qualification or certification requirements under a clinic’s mental health certification or alcohol and other drug program approval or licensure by the Addictions and Mental Health Division (AMH) (see OAR 410-147-0320). (9) Pages 3-4 — Reclassification and adjustment of trial balance of expenses: (a) Record the expenses for covered health care costs, non-reimbursable program costs, allowable overhead costs, and non-reimbursable overhead costs: (A) Covered health care (program) costs include all necessary and proper costs that are appropriate and helpful in developing and maintaining the operation of patient care facilities and activities. Necessary and proper costs related to patient care are usually costs which are common and accepted occurrences in the field of the provider's activity. Whether the Division allows the costs is subject to the regulations prescribing the treatment of specific items under the Medicaid program (see OAR 410-147-0020 Professional Services). Covered health care (program) and direct health care costs include but are not limited to: (i) Personnel costs, including Medical record and medical receptionist costs; (ii) Administrative costs; (iii) Employee pension plan costs; (iv) Normal standby costs; (v) Medical practitioner salaries; and (vi) Malpractice insurance costs; (B) Non-reimbursable program costs are costs that are not related to patient care and which are not appropriate or necessary and proper in developing and maintaining the operation of patient care facilities and activities. Costs that are not necessary include costs that usually are not common or accepted occurrences in the field of the provider's activity. Non-reimbursable program costs include, but are not limited to: (i) Women, Infants and Children (WIC); (ii) Community services/housing projects (refer to OAR 410-120-1200); (iii) Environmental external maintenance costs (e.g. landscaping, pesticide application); (iv) Research; (v) Public education; and (vi) Outside services; (C) Allowable overhead costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective. Below are examples of overhead costs: (i) Administrative costs; (ii) Billing department expenses; (iii) Audit costs; (iv) Reasonable data processing expenses (not including computers, software or databases not used solely for patient care or clinic administration purposes); (v) Space costs (rent and utilities); and (vi) Liability insurance costs; (D) Non-reimbursable overhead costs: (i) Entertainment; (ii) Fines and penalties; (iii) Fundraising; (iv) Goodwill; (v) Gifts and contributions; (vi) Political contributions; (vii) Bad debts; (viii) Other interest expense; (ix) Advertising; (x) Membership dues for public relations purposes, including country or fraternal club memberships; (xi) Cost of personal use of motor vehicles; (xii) Cost of travel incurred in connection with non-patient care related purposes; and (xiii) Costs applicable to services, facilities, and supplies furnished by a related organization (related party transactions) in excess of the lower of cost to the related organization, or the price of comparable service as rendered by a non-related entity (see OAR 410-147-0540); (b) Attach expense documentation from financial accounting records and an explanation for allocations, and allocation method used; (c) Enter any reclassified expenses, adjustments (increase/decrease) of actual expenses in accordance with the FQHC and RHC administrative rules on allowable costs. A schedule of any reported reclassification of trial balance expense, whether an increase or decrease, must include: (A) A reference to the line number on either page 3 or 4; (B) A description of the reclassification or adjustment; (C) The amount of the debit or credit; and (D) The total for each debit and credit; (d) Net expenses must equal the combined reclassified trial balance taking into account the adjustment amount on each detail line; (e) Enter the totals from each column in the “Total” fields. (10) Page 5 — Determinations — Determination of overhead applicable to FQHC and RHC services: (a) Parts A and B: Enter all totals from the previous pages of the Cost Statement (DMAP 3027) as requested under overhead applicable to FQHC or RHC services and FQHC or RHC rate; (b) Part C: If applicable, complete by entering the wages for Out-stationed Outreach Workers on line C1, divide the wages by the number of billable Division encounters to determine the rate per encounter (see also OAR 410-147-0400).