New Mexico Register / Volume XXXII, Issue 16 /August 24, 2021

 

 

This is an amendment to 8.311.3 NMAC, Sections 8 and 14, effective 9/1/2021.

 

8.311.3.8               [RESERVED] MISSION STATEMENT:  To transform lives.  Working with our partners, we design and deliver innovative, high quality health and human services that improve the security and promote independence for New Mexicans in their communities.

[8.311.3.8 NMAC - N, 9/1/2021]

 

8.311.3.14             DETERMINATION OF ACTUAL, ALLOWABLE, AND REASONABLE COSTS:

                A.            Adequate cost data:

                                (1)           All hospitals must provide adequate cost data based on financial and statistical records which can be verified by qualified auditors.  The hospital will submit a cost report each year.  The cost data must be based on an approved method of cost finding and on the accrual basis of accounting.  However, where governmental institutions operate on a cash basis of accounting, cost data on this basis will be acceptable, subject to appropriate treatment of capital expenditures.

                                (2)           The cost finding method to be used by hospitals will be the step-down method.  This method recognizes that services rendered by certain non-revenue-producing departments or centers are utilized by certain other non-revenue-producing centers.  All costs of non-revenue-producing centers are allocated to all centers which they serve, regardless of whether or not these centers produce revenue.  The cost of the non-revenue-producing center serving the greatest number of other centers while receiving benefits from the least number of centers is apportioned first.  Following the apportionment of the cost of the non-revenue-producing center, that center will be considered "closed" and no further costs will be apportioned to it.  This applies even though it may have received some service from a center whose cost is apportioned later.  Generally when two centers render services to an equal number, that center which has the greatest amount of expense will be allocated first.

                B.            Reporting year:  For the purpose of determining payment rates, the reporting year is the hospital's fiscal year.

                C.            Cost reporting:  At the end of each of its fiscal years, the hospital will provide to the department or its audit agent an itemized list of allowable costs (financial and statistical report) on the New Mexico MAD cost reporting form.  The cost report must be submitted within five months after the close of the hospital's fiscal year.  Failure to file a report within the five month limit, unless an extension is granted, will result in any or all of the following: suspensions of MAD payments, suspension of the provider’s medicaid number, or a penalty of $100 per day until such time as the report and other substantiating data is received.  Extensions may be granted based on 42 CFR Part 413.

                D.            Retention of records:

                                (1)           Each hospital will maintain financial and statistical records of the period covered by such cost report for a period of [not less than four] 10 years following the date of submittal of the New Mexico MAD cost report to the department.  These records must be accurate and in sufficient detail to substantiate the cost data reported.  The provider will make such records available upon demand to representatives of the department, the state of New Mexico audit agent, or the United States department of health and human services.

                                (2)           The department or its audit agent will retain all cost reports submitted by providers for a period of [not less than three] 10 years following the date of final settlement of such reports.

                E.            Audits:

                                (1)           Desk audit:  Each cost report submitted will be subjected to a comprehensive desk audit by the state's audit agent.  This desk audit is for the purpose of analyzing the cost report.  After each desk audit is performed, the audit agent will submit a complete report of the desk review to the department.

                                (2)           Field audit:  Field audits will be performed on all facilities and per the auditing schedule established by medicare.  The purpose of the field audit of the facility's financial and statistical records is to verify that the data submitted on the cost report is accurate, complete, and reasonable.  The field audits are conducted in accordance with generally accepted auditing standards.  Field audits are of sufficient scope to determine that only proper items of cost applicable to the service furnished were included in the provider's calculation of its cost and to determine whether the expense attributable to such proper items of cost was accurately determined and reasonable.  After each field audit is performed, the audit agent will submit a complete report of the audit to the department.  This report will meet generally accepted auditing standards and shall declare the auditor's opinion as to whether, in all material respects, the costs reported by the provider are allowable, accurate, and reasonable.  These audit reports will be retained by the department for a period of not less than three years from the date of final settlement of such reports.  Audits will be performed in accordance with applicable federal regulations.

                F.            Overpayments:  All overpayments found in audits will be accounted for on the CMS-64 report in accordance with 42 CFR 433.300 through 42 CFR 433.322.

                G.            Allowable and non-allowable costs:  Allowable costs, non-allowable costs, and reasonableness of costs will be determined as on the basis of the medicare health insurance manual (HIM-15).

[8.311.3.14 NMAC - Rp, 8.311.3.14 NMAC, 6/1/2016; A, 1/1/2019; A, 9/1/2021]