Pennsylvania Code & Bulletin

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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 54 Pa.B. 1806 (March 30, 2024).

Pennsylvania Code



1189.51.    Allowable costs.
1189.52.    Allocating cost centers.
1189.53.    Changes in bed complement during a cost reporting period.
1189.54.    Costs of related parties.
1189.55.    Prudent buyer concept.

§ 1189.51. Allowable costs.

 A cost incurred by a county nursing facility is an allowable cost if the cost was incurred in the course of providing nursing facility services and one of the following applies:

   (1)  The cost is allowable pursuant to the Medicare Provider Reimbursement Manual (CMS Pub. 15-1).

   (2)  The cost is not allowable under the CMS Pub. 15-1 but is allowable as a net operating cost under Chapter 1187 (relating to nursing facility services).

   (3)  The cost is identified as an allowable county nursing facility cost in the Commonwealth’s approved State Plan.

§ 1189.52. Allocating cost centers.

 (a)  The county nursing facility shall allocate costs in accordance with the allocation bases and methodology established by the Department as contained in this chapter and the MA cost report. If the nursing facility has its own more accurate method of allocation basis, it may be used only if the nursing facility receives written approval from the Department prior to the first day of the applicable cost report year.

 (b)  The absence of documentation to support allocation or the use of other methods which do not properly reflect use of the Department’s required allocation bases or approved changes in bases shall result in disallowances being imposed for each affected line item.

§ 1189.53. Changes in bed complement during a cost reporting period.

 (a)  When the county nursing facility’s bed complement changes during a cost reporting period, the allocation bases are subject to verification at audit.

 (b)  The county nursing facility shall keep adequate documentation of the costs related to bed complement changes during a cost reporting period. The county nursing facility shall submit the supplemental schedules as may be required by the Department to identify the costs being allocated by the required statistical methods for each period of change.

§ 1189.54. Costs of related parties.

 Costs applicable to services, movable property and supplies, furnished to the county nursing facility by organizations related to the county nursing facility by common ownership or control shall be included as an allowable cost of the county nursing facility at the cost to the related organization. This cost may not exceed the price of comparable services, movable property or supplies that could be purchased elsewhere.

§ 1189.55. Prudent buyer concept.

 The purchase or rental by a county nursing facility of services, movable property and supplies, including pharmaceuticals, may not exceed the cost that a prudent buyer would pay in the open market to obtain these items, as described in the CMS Pub. 15-1.

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