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demonstrating the purpose of the trips so that a relationship to contracted
client care in Texas can be determined. For the purpose of comparison
to the cost of commercial alternatives, documentation of the cost
of operating and maintaining a private aircraft includes allowable
expenses relating to the lease or depreciation of the aircraft; aircraft
fuel and maintenance expenses; aircraft insurance, taxes, and interest;
pilot expenses; hangar and other related expenses; mileage, vehicle
rental or other ground transportation expense; and airport parking
fees. Documentation demonstrating the allowable cost of commercial
alternatives includes commercial airfare ticket costs at the lowest
fare offered (including all discounts) and associated expenses, including
mileage, vehicle rental or other ground transportation expenses; airport
parking fees; and any hotel or per diem due to necessary layovers
(no scheduled flights at the time of return trip).
(iv) To substantiate the allowable cost of leasing
a luxury vehicle as defined in §355.103(b)(10)(C)(i) of this
subchapter, the provider must obtain at the time of the lease a separate
quotation establishing the monthly lease costs for the base amount
allowable for cost-reporting purposes as specified in §355.103(b)(10)(C)(i)
of this subchapter. Without adequate documentation to verify the allowable
lease costs of the luxury vehicle, the reported costs shall be disallowed.
(v) For adequate documentation purposes, a written
description of each cost allocation method must be maintained that
includes, at a minimum, a clear and understandable explanation of
the numerator and denominator of the allocation ratio described in
words and in numbers, as well as a written explanation of how and
to which specific business components the remaining percentage of
costs were allocated.
(vi) To substantiate the allowable cost for staff training
as defined in §355.103(b)(15)(A) of this subchapter, the provider
must maintain a description of the training verifying that the training
pertained to contracted client care-related services or quality assurance.
At a minimum, a program brochure describing the seminar or a conference
program with a description of the workshop must be maintained. The
documentation must provide a description clearly demonstrating that
the seminar or workshop provided training for contracted client care-related
services or quality assurance.
(vii) Documentation regarding the allocation of costs
related to noncontracted services, as specified in §355.102(j)(2)
of this subchapter, must be maintained by the provider. At a minimum,
the provider must maintain written records verifying the number of
units of noncontracted services provided during the provider's fiscal
year, along with adequate documentation supporting the direct and
allocated costs associated with those noncontracted services.
(viii) Adequate documentation to substantiate legal,
accounting, and auditing fees must include, at a minimum, the amount
of time spent on the activity, a written description of the activity
performed which clearly explains to which business component the cost
should be allocated, the person performing the activity, and the hourly
billing amount of the person performing the activity. Other legal,
accounting, and auditing costs, such as photocopy costs, telephone
costs, court costs, mailing costs, expert witness costs, travel costs,
and court reporter costs, must be itemized and clearly denote to which
business component the cost should be allocated.
(ix) Providers who self-insure for all or part of their
employee-related insurance costs, such as health insurance and workers'
compensation costs, must use one of the two following methods for
determining and documenting the provider's allowable costs under the
cost ceilings and any carry forward as described in §355.103(b)(13)(E)
of this subchapter.
(I) Providers may obtain and maintain each fiscal year's
documentation to establish what their premium costs would have been
had they purchased commercial insurance for total coverage. The documentation
should include, at a minimum, bids from two commercial carriers. Bids
must be obtained no less frequently than every three years.
(II) If providers choose not to obtain and maintain
commercial bids as described in subclause (I) of this clause, providers
may claim as an allowable cost the health insurance actual paid claims
incurred on behalf of the employees that do not exceed 10% of the
payroll for employees eligible for receipt of this benefit. In addition,
providers may claim as an allowable cost the workers' compensation
actual paid claims incurred on behalf of the employees, an amount
each cost report period not to exceed 10% of the payroll for employees
eligible for receipt of this benefit.
(III) Providers who self-insure must also maintain
documentation that supports the amount of claims paid each year and
any allowable costs to be carried forward to future cost-reporting
periods.
(x) Providers who self-insure for all or part of their
coverage for nonemployee-related insurance, such as malpractice insurance,
comprehensive general liability, and property insurance, must maintain
documentation for each cost-reporting period to establish what their
premium costs would have been had they purchased commercial insurance
for total coverage. The documentation should include, at a minimum,
bids from two commercial carriers. Bids must be obtained no less frequently
than every three years. Providers who self-insure must also maintain
documentation that supports the amount of claims paid each year and
any allowable costs to be carried forward to future cost-reporting
periods. Governmental providers must document the existence of their
claims management and risk management programs.
(xi) Regarding compensation of owners and related parties,
providers must maintain the following documentation, at a minimum,
for each owner or related party: a detailed written description of
actual duties, functions, and responsibilities; documentation substantiating
that the services performed are not duplicative of services performed
by other employees; time sheets or other documentation verifying the
hours and days worked; the amount of total compensation paid for these
duties, with a breakdown detailing regular salary, overtime, bonuses,
benefits, and other payments; documentation of regular, periodic payments
and/or accruals of the compensation, documentation that the compensation
is subject to payroll or self-employment taxes; and a detailed allocation
worksheet indicating how the total compensation was allocated across
business components receiving the benefit of these duties.
(I) Regarding bonuses paid to owners and related parties,
the provider must maintain clearly defined bonus policies in its written
agreements with employees or in its overall employment policy. At
a minimum, the bonus policy must include the basis for distributing
the bonuses, including qualifications for receiving the bonus and
how the amount of each bonus is calculated. Other documentation must
specify who received bonuses, whether the persons receiving bonuses
are owners, related parties, or arm's-length employees, and the bonus
amount received by each individual.
(II) Regarding benefits provided to owners and related
parties, the provider must maintain clearly defined benefit policies
in its written agreements with employees or in its overall employment
policy. At a minimum, the documentation must include the basis for
eligibility for each type of benefit available, who is eligible to
receive each type of benefit, who actually receives each type of benefit,
whether the persons receiving each type of benefit are owners, related
parties, or arm's-length employees, and the amount of each benefit
received by each individual.
(xii) Regarding all forms of compensation, providers
must maintain documentation for each employee which clearly identifies
each compensation component, including regular pay, overtime pay,
incentive pay, mileage reimbursements, bonuses, sick leave, vacation,
other paid leave, deferred compensation, retirement contributions,
provider-paid instructional courses, health insurance, disability
insurance, life insurance, and any other form of compensation. Types
of documentation would include insurance policies; provider benefit
policies; records showing paid leave accrued and taken; documentation
to support hours (regular and overtime) worked and wages paid; and
mileage logs or other documentation to support mileage reimbursements
and travel allowances. For accrued benefits, the documentation must
clearly identify the period of the accrual. For example, if an employee
accrues two weeks of vacation during 20x1 and receives the corresponding
vacation pay during 20x3, that employee's compensation documentation
for 20x3 should clearly indicate that the vacation pay received had
been accrued during 20x1.
(I) For staff required to maintain continuous daily
time sheets as per §355.102(j) of this subchapter and subclause
(II) of this clause, the daily timesheet must document, for each day,
the staff member's start time, stop time, total hours worked, and
the actual time worked (in increments of 30 minutes or less) providing
direct services for the provider, the actual time worked performing
other functions, and paid time off. The employee must sign each Cont'd... |
