2005 Idaho Code - 56-101 — DEFINITIONS

                                  TITLE  56
                        PUBLIC ASSISTANCE AND WELFARE
                                  CHAPTER 1
                           PAYMENT FOR SKILLED AND
                            INTERMEDIATE SERVICES
    56-101.  DEFINITIONS. Unless the context clearly requires otherwise, the
definitions in this section apply throughout this chapter and shall have the
following meanings:
    (1)  "Appraisal" means the method of determining the value of the property
as determined by an appraisal conducted by a member of the appraisal institute
(MAI), or successor organization. The appraisal must specifically identify the
values of land, building, equipment, and goodwill.
    (2)  "Assets" means economic resources of the contractor, recognized and
measured in conformity with generally accepted accounting principles.
    (3)  "Bed-weighted median" is determined by arraying the average per diem
cost per bed of all facilities from high to low and identifying the bed at the
point in the array at which half of the beds have equal or higher per diem
costs and half have equal or lower per diem costs. The identified bed is the
median bed. The per diem cost of the median bed is the bed-weighted median.
    (4)  "Case mix index" is a numeric score assigned to each facility
resident, based on the resident's physical and mental condition, which
projects the amount of relative resources needed to provide care to the
resident.
    (5)  "Depreciation" means the systematic distribution of the cost or other
basis of tangible assets, less salvage, over the estimated useful life of the
assets.
    (6)  "Direct care costs" consists of the following costs directly assigned
to the nursing facility or allocated to the nursing facility through medicare
cost finding principles:
    (a)  Direct nursing salaries which include the salaries of registered
    nurses, licensed professional nurses, certificated nurse's aides, and unit
    clerks; and
    (b)  Routine nursing supplies; and
    (c)  Nursing administration; and
    (d)  Direct portion of medicaid related ancillary services; and
    (e)  Social services; and
    (f)  Raw food; and
    (g)  Employee benefits associated with the direct salaries.
    (7)  "Director" means the director of the department of health and welfare
or the director's designee.
    (8)  "Equity" means the new book value of all tangible and intangible
assets less the recorded value of all liabilities, as recognized and measured
in conformity with generally accepted accounting principles.
    (9)  "Facility" means an entity which contracts with the director to
provide services to recipients in a structure owned, controlled, or otherwise
operated by such entity, and which entity is responsible for operational
decisions. In conjunction with the use of the term "facility":
    (a)  "Free-standing intermediate care" means an intermediate care
    facility, as defined in and licensed under chapter 13, title 39, Idaho
    Code, which is not owned, managed, or operated by, nor is otherwise a part
    of a hospital, as defined in section 39-1301(a), Idaho Code; and
    (b)  "Free-standing skilled care" means a nursing facility, as defined in
    and licensed under chapter 13, title 39, Idaho Code, which is not owned,
    managed, or operated by, nor is otherwise a part of a hospital, as defined
    in section 39-1301(a), Idaho Code; and
    (c)  "Free-standing special care" means a facility that provides either
    intermediate care, or skilled care, or intermediate care for the mentally
    retarded, or any combination of either, which is not owned, managed, or
    operated by, nor is otherwise a part of a hospital, as defined in section
    39-1301(a), Idaho Code; and
    (d)  "Hospital-based" means a nursing or intermediate care facility, as
    defined in and licensed under chapter 13, title 39, Idaho Code, which is
    owned, managed, or operated by, or is otherwise a part of a hospital, as
    defined in section 39-1301(a), Idaho Code.
    (10) "Forced sale" is a sale required by a bankruptcy, foreclosure, the
provisions of a will or estate settlement pursuant to the death of an owner,
physical or mental incapacity of an owner which requires ownership transfer to
existing partner or partners, or a sale required by the ruling of a federal
agency or by a court order.
    (11) "Goodwill" means the amount paid by the purchaser that exceeds the
net tangible assets received. The value of goodwill is derived from the
economic benefits that a going concern may enjoy, as compared with a new one,
from established relations in the related markets, with government departments
and other noncommercial bodies and with personal relationships. These
intangible assets cannot be separated from the business and sold as can plant
and equipment. Under the theory that the excess payment would be made only if
expected future earnings justified it, goodwill is often described as the
price paid for excess future earnings. The amortization of goodwill is
nonallowable, nonreimbursable expense.
    (12) "Historical cost" means the actual cost incurred in acquiring and
preparing an asset for use, including feasibility studies, architect's fees,
and engineering studies.
    (13) "Indirect care costs" consists of the following costs either directly
coded to the nursing facility or allocated to the nursing facility through the
medicare step-down process:
    (a)  Administrative and general care cost; and
    (b)  Activities; and
    (c)  Central services and supplies; and
    (d)  Laundry and linen; and
    (e)  Dietary ( "non-raw food" costs); and
    (f)  Plant operation and maintenance (excluding utilities); and
    (g)  Medical records; and
    (h)  Employee benefits associated with the indirect salaries; and
    (i)  Housekeeping; and
    (j)  Other costs not included in direct care costs or costs exempt from
    cost limits.
    (14) "Interest rate limitation" means that the interest rate allowed for
working capital loans and for loans for major movable equipment for
intermediate care facilities for the mentally retarded shall be the prime rate
as published in the western edition of the Wall Street Journal or successor
publication, plus one percent (1%) at the date the loan is made. All interest
expense greater than the amount derived by using the limitation above shall be
nonreimbursable; provided, however, that this interest rate limitation shall
not be imposed against loans or leases which were made prior to July 1, 1984.
Said loans or leases shall be subject to the tests of reasonableness,
relationship to patient care and necessity.
    (15) "Intermediate care facility for the mentally retarded" means an
habilitative facility designed and operated to meet the educational, training,
habilitative and intermittent medical needs of the developmentally disabled.
    (16) "Major movable equipment" means such items as accounting machines,
beds, wheelchairs, desks, furniture, vehicles, etc. The general
characteristics of this equipment are:
    (a)  A relatively fixed location in the building;
    (b)  Capable of being moved, as distinguished from building equipment;
    (c)  A unit cost sufficient to justify ledger control;
    (d)  Sufficient size and identity to make control feasible by means of
    identification tags; and
    (e)  A minimum life of approximately three (3) years.
    (17) "Medicaid" means the 1965 amendments to the social security act (P.L.
89-97), as amended.
    (18) "Minor movable equipment" includes such items as wastebaskets,
bedpans, syringes, catheters, silverware, mops, buckets, etc. The general
characteristics of this equipment are:
    (a)  In general, no fixed location and subject to use by various
    departments of the provider's facility;
    (b)  Comparatively small in size and unit cost;
    (c)  Subject to inventory control;
    (d)  Fairly large quantity in use; and
    (e)  Generally, a useful life of approximately three (3) years or less.
    (19) "Net book value" means the historical cost of an asset, less
accumulated depreciation.
    (20) "Normalized per diem costs" refers to direct care costs that have
been adjusted based on the facility's case mix index for purposes of making
the per diem costs comparable among facilities. Normalized per diem costs are
calculated by dividing the facility's direct care per diem costs by its
facility-wide case mix index, and multiplying the result by the statewide
average case mix index.
    (21) "Nursing facility inflation rate" means the most specific skilled
nursing facility inflation rate applicable to Idaho established by data
resources, inc., or its successor. If a state or regional index has not been
implemented, the national index shall be used.
    (22) "Patient-day" means a calendar day of care which will include the day
of admission and exclude the day of discharge unless discharge occurs after
3:00 p.m. or it is the date of death, except that, when admission and
discharge occur on the same day, one (1) day of care shall be deemed to exist.
    (23) "Property costs" means the total of allowable interest expense, plus
depreciation, property insurance, real estate taxes, amortization, and
allowable lease/rental expense. The department may require and utilize an
appraisal to establish those components of property costs which are identified
as an integral part of an appraisal.
    (24) "Raw food" means food used to meet the nutritional needs of the
residents of a facility, including liquid dietary supplements, liquid
thickeners, and tube feeding solutions.
    (25) "Reasonable property insurance" means that the consideration given is
an amount that would ordinarily be paid by a cost-conscious buyer for
comparable insurance in an arm's length transaction. Property insurance per
licensed bed in excess of two (2) standard deviations above the mean of the
most recently reported property insurance costs per licensed bed of all
facilities in the reimbursement class as of the end of a facility's fiscal
year shall not be considered reasonable.
    (26) "Recipient" means an individual determined eligible by the director
for the services provided in the state plan for medicaid.
    (27) "Rural hospital-based nursing facilities" are those hospital-based
nursing facilities not located within a metropolitan statistical area (MSA) as
defined by the United States bureau of the census.
    (28) "Urban hospital-based nursing facilities" are those hospital-based
nursing facilities located within a metropolitan statistical area (MSA) as
defined by the United States bureau of the census.
    (29) "Utilities" means all expenses for heat, electricity, water and
sewer.