FAQs

• Efficiency Incentives
  Answer: Facilities may also qualify for efficiency payments if per day costs in any of these categories are below the 80th percentile of per day costs for all RCH. The efficiency payment is 20% of the difference between the facility cost per day for the expense category and the cost per day at the 80th percentile of all facilities.
• Fixed Asset Reimbursement
  Answer:

  Reimbursement for property/fixed assets is based on a fair rental value method in lieu of associated interest and depreciation costs. The fair rent allowance is determined by amortizing the cost of the asset over its useful life with application of rate of return (ROR). For example, renovation costs of $150,000 with a useful life of 25 years completed in year with an applicable ROR of 4.515% (2009 ROR) would yield $10,131 in allowable reimbursement per year. 

• Occupancy Standards for Rate Setting
  Answer: For rate computation purposes, allowable costs are divided by the higher of reported total resident days for the year; or for facilities with 26 or more beds - 90% of licensed capacity, or facilities with 25 or fewer beds - 85% of licensed capacity.
  Salary Limits and Cost Categories
  
  The cost-based system includes limits on allowable salaries for the facility administrator and owners/related parties. In addition, the system includes year-to-year cost increase limits for housekeeping, laundry, and dietary expense categories. If costs on a per day basis in any of these categories increase by more than inflation, allowable costs are limited to prior year costs plus inflation.