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Ohio Laws and Rules
(A) The following shall apply in order to determine if a project qualifies as a nonextensive renovation for inclusion on the medicaid cost report:
(1) The project results in the betterment, improvement, or restoration of a ICF-MR beyond its current functional capacity through a structural change that costs at least five hundred dollars per bed; and
(2) When applying the five hundred dollars per bed requirement the following apply:
(a) If the project affects only the medicaid certified part of a facility, all medicaid certified beds in the facility will be considered when applying the minimum cost criteria; or
(b) If the project affects the entire facility, all licensed beds will be considered when applying the minimum cost criteria; and
(3) The project does not increase the number of licensed beds; and
(4) If the facility relocates beds within the current structure of the building, the construction for the relocated beds shall be considered a nonextensive renovation if it meets the other criteria specified in paragraph (A) of this rule unless the project meets the definition of extensive renovation; and
(5) The ICF-MR has obtained prior approval under paragraph (C) of this rule; and
(6) The ICF-MR has satisfied all requirements for notice to Ohio department of job and family services (ODJFS) upon completion of the project as set forth under paragraph (E)(1) of this rule; and
(7) Unless the project is necessary to meet the requirements of federal, state or local statutes, ordinances, rules or polices, ODJFS will not approve a project as a nonextensive renovation if fewer than five years have elapsed since the date of licensure of the portion of the ICF-MR that is proposed to be renovated.
(B) To obtain prior approval from ODJFS to report a project as a nonextensive renovation on the medicaid cost report, the following information must be submitted by the ICF-MR prior to beginning construction of the proposed nonextensive renovation:
(1) A brief description of the project including the need for the project; and
(2) An estimate of the cost of the project, a list of work items summarizing the scope of the project, a copy of the estimate from the contractor that will undertake the project, and estimated total annual depreciation and interest expense for the project; and
(3) A sketch, diagram, or illustration of the facility prior to the project; and
(4) A sketch, diagram, or illustration of the facility showing the layout after completion of the project; and
(5) The estimated start and completion date of the project; and
(6) If the ICF-MR is requesting an approval of a project under paragraph (A)(7) of this rule, the applicable statute, ordinance, rules or policy must be submitted along with an explanation of how the project is necessary to meet the requirements of federal, state or local statutes, ordinances, rules or policies; and
(7) The request must show the number of beds affected by each component of the project in order to determine the minimum cost requirement set forth under paragraph (A)(2) of this rule.
(C) When reviewing a request for prior approval to report a project as a nonextensive renovation on the medicaid cost report, ODJFS shall:
(1) Request in writing any additional information needed to review the request for prior approval; and
(2) Determine that the project meets the definition of a renovation; and
(3) Determine that the project satisfies all the requirements of a nonextensive renovation as set forth under paragraph (A) of this rule; and
(4) Determine that the estimated costs of the project are allowable; and
(5) Notify the provider in writing that the request for prior approval to report a project as a nonextensive renovation on the medicaid cost report has been granted or denied. After prior approval is granted, the provider shall comply with the following:
(a) The nonextensive renovation project must be started within six months after the date ODJFS grants approval; and
(b) The nonextensive renovation project must be completed within eighteen months after it is started. The total cost of all portions of the nonextensive renovation project completed within eighteen months after it is started must satisfy the cost per bed requirement under paragraph (A)(1) of this rule. For purposes of paragraph (C) of this rule, “started” means the physical work has begun on the project at the site of the facility. Preliminary work such as planning, agency approval, feasibility surveys, and architectural drawings are not considered “started”. Failure to satisfy the conditions under this paragraph shall result in costs of the project being reported as cost of ownership in lieu of nonextensive renovations in accordance with paragraph (E)(3) of this rule.
(6) Written approval from ODJFS of a project as a nonextensive renovation for inclusion on the medicaid cost report shall clearly state that the approval of any additional costs as set forth under paragraph (D) of this rule must be approved in writing by ODJFS in order to qualify as nonextensive renovation costs.
(D) Additional notice to ODJFS is required during the course of the construction of the approved nonextensive renovation if any of the following circumstances occur:
(1) The completion of the nonextensive renovation project is delayed or accelerated by more than four months from the estimated date of completion.
(2) The actual cost of construction exceeds the approved cost by the greater of ten per cent or two thousand dollars.
(a) Upon receiving notice of the cost increase, ODJFS may approve the additional costs for inclusion as nonextensive renovation costs on the medicaid cost report. In reviewing a project for approval under paragraph (D)(2)(a) of this rule, ODJFS shall apply the criteria specified in paragraph (C) of this rule; or
(b) If ODJFS does not approve the additional costs for inclusion as nonextensive renovation costs on the medicaid cost report, expenses related to all costs in excess of the approved amount will be reported as cost of ownership; or
(c) If the provider fails to provide notice to ODJFS of the increased costs, expenses related to all costs in excess of the approved amount will be reported as cost of ownership.
(3) The actual amount financed exceeds the approved amount financed by the greater of ten per cent or two thousand dollars.
(a) Upon receiving notice of the increase in the amount financed, ODJFS may approve the increase in the amount financed for inclusion as nonextensive renovation costs on the medicaid cost report. In reviewing a project for approval under paragraph (D)(3)(a) of this rule, ODJFS shall apply the criteria specified in paragraph (C) of this rule; or
(b) If ODJFS does not approve the additional amount financed, interest expense related to all amounts financed in excess of the approved amount will be reported as cost of ownership; or
(c) If the provider fails to provide notice to ODJFS of the increased amount financed, interest expense related to all amounts financed in excess of the approved amount will be reported as cost of ownership.
(4) The actual interest rate exceeds the projected interest rate by two percentage points or more.
(a) Upon receiving notice of the increased interest rate, ODJFS may approve the interest expense associated with the increased interest rate for inclusion as nonextensive renovation costs on the medicaid cost report. In reviewing a project for approval under paragraph (D)(4)(a) of this rule, ODJFS shall apply the criteria specified in paragraph (C) of this rule; or
(b) If ODJFS does not approve the increased interest rate, the interest expense associated with the incremental increase in the approved interest rate will be reported as cost of ownership; or
(c) If the provider fails to provide notice to ODJFS of the increased interest rate, the interest expense associated with the incremental increase in the approved interest rate will be reported as cost of ownership.
(5) Any increase or decrease in the scope of the nonextensive renovation project.
(a) Upon receiving notice of the change in the scope of the nonextensive renovation project, ODJFS may approve the project as revised if the change in scope bears a reasonable relationship to the approved nonextensive renovation project; or
(b) If ODJFS does not approve the project as revised, the additional costs associated with the increase in scope shall be reported as cost of ownership; or
(c) If the provider fails to provide notice to ODJFS of the change in the scope of the project, the additional costs associated with the increase in scope shall be reported as cost of ownership.
(6) Any change of cost that causes the project to exceed the threshold for being considered an extensive renovation or to fall below the threshold for being considered a nonextensive renovation.
(E) An approved nonextensive renovation project shall be reported as follows:
(1) Before a nonextensive renovation or portion thereof can be reported on a cost report, notice of completion must be submitted to ODJFS. The notice of completion must include:
(a) The date the project or portion thereof was placed in service; and
(b) Detailed depreciation and amortization schedules and a narrative explanation of any material differences between the expenses stated on the schedules and the estimated costs submitted for the project under paragraph (B)(2) of this rule; and
(c) A detailed reconciliation of actual financing costs to the projected financing cost in the request for approval of a nonextensive renovation.
(2) A nonextensive renovation may be reported on the cost report as each portion of the project is placed into service as long as the anticipated completion of the portions of the project is still within the period set forth under paragraph (C)(5) of this rule and in the aggregate satisfy the five hundred dollar bed requirement under paragraph (A)(1) of this rule.
(3) If the total cost of all the portions of the entire project that have been placed into service within the period set forth under paragraph (C)(5) of this rule do not satisfy the cost per bed requirement under paragraph (A)(1) of this rule, the costs and related expenses for all the portions of the project that have been reported as a nonextensive renovation shall be reported in cost of ownership.
Replaces: 5101:3-3- 84.3
Effective: 02/02/2006
R.C. 119.032 review dates: 02/01/2011
Promulgated Under: 119.03
Statutory Authority: 5111.02, 5111.251
Rule Amplifies: 5111.251
Prior Effective Dates: 7/3/80, 9/1/82, 2/21/83, 8/15/83 (Emer), 11/10/83 (Emer), 12/25/83, 2/12/85 (Emer), 6/1/85, 8/1/87, 9/30/87 (Emer), 12/28/87, 10/1/91 (Emer), 12/20/91, 9/30/93 (Emer), 12/30/93 (Emer), 3/31/94, 7/4/02