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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 54 Pa.B. 2336 (April 27, 2024).

55 Pa. Code § 6211.4. Definitions.

§ 6211.4. Definitions.

 The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

   Allocate—To designate a specific task, service or supply to a specific cost center because of its direct relationship to client care and identifiable measure of application.

   Allowable cost—The cost reimbursed under MA, that is the facility’s actual audited allowable cost after appropriate adjustments are certified by Commonwealth auditors.

   Apportion—To divide costs that are necessary to program operation but that cannot be directly or entirely charged to a specific cost center.

   Arms-length transaction—A transaction including independent unrelated parties (no interest such as equity, control, contracts, interlocking directorates, officers, and the like); and, a willing buyer and a willing seller.

   Assets—Economic resources that are owned by a business and are expected to benefit future operations.

   Budget—A plan of financial operation for some future period expressed in monetary terms.

   Capital asset—An item with a useful life of more than 1 year or that would not meet Internal Revenue Service standards for nondepreciable assets. The term includes buildings, renovations and building improvements, and moveable items such as furniture and fixtures, computers and transportation equipment. Land is not a depreciable capital asset.

   Change of ownership—The sale or transfer of a facility and all of its assets to another person, corporation, organization or partnership, with the expectation that the facility will continue to operate for the same purpose for which it is currently being used.

   Closed audit—An audit is closed when the written audit report has been distributed and one of the following occurs:

     (i)   The period for appeal has passed.

     (ii)   An appeal has been concluded and finalized. The closed audit results in final settlement, which is either additional payments due to the provider or a repayment of funds dispersed to the provider for disallowed costs.

   Compensation—The total remuneration paid to an individual employe, including wages or salaries and benefits.

   Competitive bidding process—The method used to procure goods or services by obtaining three or more vendor cost proposals and selecting the proposal with the lowest responsible bid.

   Cost center—A group of services or employes, or both, or another unit or type of activity into which functions of a facility are divided for purposes of expense assignment and allocations.

   Cost report—A summary of client occupancy, income and expenses for a given period, presented in a manner prescribed by the Department.

   Cost settlement—A retroactive adjustment based on a cost report, made at the end of a reporting period, to bring the interim payments made to the provider during that reporting period into agreement with the reimbursable amount payable to the provider for the allowable services actually rendered to program beneficiaries during that period. Final adjustment is made after an audit is closed.

   Current fiscal year—The fiscal year in which the interim per diem rate is to be used.

   Depreciable assets—Equipment, buildings and fixtures that have a purchase price of more than $500 and are expected to have a useful life of more than 1 year.

   Depreciation—Apportionment of the value of an asset over its useful life.

   Direct care staff—Staff assigned to perform direct responsibilities related to activities of daily living, self-help and socialization skills. Staff involved in regularly scheduled specialized developmental programs with clients are not included in direct care staff. Professional staff may be included in direct care staff.

   Efficiency incentive—A remuneration to a provider that may be earned by spending less than projected operating expenses within specified guidelines.

   Facility—A non-State operated intermediate care facility for persons with an intellectual disability or a non-State operated intermediate care facility for persons with other related conditions.

   Fair market rental appraisal—The determination of reasonable payment to a lessor for a rented space by a qualified real estate appraiser.

   Interest—The direct cost incurred for the use of borrowed funds.

   Interest on capital indebtedness—The direct cost incurred for funds borrowed for capital purposes. Examples of interest on capital indebtedness include acquisition of facilities, equipment and capital improvements. Generally, loans for capital purposes are long term loans.

   Interest on current indebtedness—The direct cost incurred for funds borrowed for a relatively short term, usually for purposes such as working capital for normal operating expenses.

   Investment income—Return on funds not expended by the facility and placed with a third party. The term includes interest income from bonds and savings accounts, premiums and dividends on stock purchases, and income from trust agreements.

   Major object of expenditure—A generic classification of costs within cost centers including personnel, equipment, operating costs, depreciation and interest, and apportioned costs.

   Management fee—A charge for general administrative services incurred for a common or joint purpose not readily assignable to a specific cost center.

   Practitioner—Salaried or contracted practitioners including physicians, dentists, podiatrists, occupational therapists and physical therapists.

   Prudent buyer—A term for the price paid for items by a cost-conscious purchaser in the open market under competitive conditions.

   Reasonable costs—Necessary and proper costs incurred by the provider, based on the expectation that the facility is operated efficiently and economically.

   Related party—An organization related to the provider by common ownership or control. Related to the provider means that the provider, to a significant extent, is associated with, affiliated with or has control of or is controlled by the organization furnishing the services. Common ownership exists when an individual possesses significant ownership or equity in the provider and the institution or organization serving the provider. Control exists where an individual or an organization has the power, directly or indirectly, to significantly influence or direct the actions or policies of an organization or institution.

   Request for proposal—A formal document describing services requested that is provided to interested contractors along with information to enable the preparation and submission of proposals for evaluation and selection.

   Service contract—An obligation between a provider and supplier in which the nature and cost of service is specified, and reimbursement is not based upon actual units of service provided.

   Standard interim per diem rate—The rate established by the Department in accordance with §  6211.16 (relating to establishment of standard interim per diem rate) for the purpose of making interim payments to the facility pending a year-end cost settlement.

   Start-up costs—Costs incurred by the provider in developing its ability to furnish client care services prior to certification of the facility or admission of the first client.

   Unit of service contract—An obligation between a provider and supplier in which the unit is defined, a price for the unit is stipulated, the basis for the price and unit is justified, and reimbursement is based upon actual units of service provided.


   The provisions of this §  6211.4 amended under sections 201(2), 403(b) and 403.1 of the Human Services Code (62 P.S. § §  201(2), 403(b) and 403.1).


   The provisions of this §  6211.4 amended June 8, 2012, effective July 1, 2011, in accordance with section 403.1(e) of the Human Services Code, 42 Pa.B. 3261. Immediately preceding text appears at serial pages (213308) to (213311).

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