DEFINITIONS
1 Accrual Method of Accounting is when revenue is reported in the period when it is earned, regardless of when it is collected, and expenses are reported in the period in which they are incurred, regardless of when they are paid.
2 Allowable Costs are those operating costs remaining after the adjustments required by the Principles of Reimbursement have been applied to the provider's total operating costs reported in the annual cost reports.
3 Allowances are deductions granted for damages, delay, shortage, imperfections, or other causes, excluding discounts and returns.
4 Alzheimer's/Dementia Care Unitis a unit that provides care/services in a designated, separated area for residents with Alzheimer's disease or other dementia. The unit provides specialized programs, services and activities, and is locked, segregated or secured to provide or limit access by a resident outside the designated or separated area.
5 Average Annual Per Diem Cost for Routine Services is the average annual per diem cost for routine services for total allowable routine costs in accordance with applicable principles divided by total bed days.
6 Bed Days means the actual total occupied bed days for the year in accordance with applicable Principles of Reimbursement and including bed hold days for members, who because of need for medical care and/or visits with family or friends, are absent from the residence.
7 Common Ownership exists when an individual possesses significant ten percent (10%) ownership or equity in the provider and the institution or organization serving the provider.
8 Control exists where an individual or organization has the power, directly or indirectly to significantly influence or direct the actions or policies of an organization or institution.
9 Cost of Capital is the opportunity cost of all capital invested in an enterprise.
10 Cost Reimbursement is the term as used throughout these Principles that refers to the reimbursement methods established herein.
11 Department as used throughout these Principles refers to the State of Maine Department of Health and Human Services (DHHS).
12 Discrete Costing is the specific costing methodology that calculates the costs associated with new additions and/or renovations. In this methodology, none of the historical basis of costs from the original building is allocated to the addition/renovation.
13 Discounts as referred to in these Principles, are reductions granted for the settlement of debts.
14 Fair Market Value is the price that the asset would bring as a result of bona fide bargaining between well-informed buyers and sellers as of the date of acquisition. Usually the fair market value price will be based on the price at which bona fide sales of assets of like type, quality and quantity have occurred, under similar market conditions in a particular market as of the date of acquisition. The Department's determination of the fair market value of the asset will be based on the lower of the sale price or the amount determined by an appraisal. The appraisal must be a full narrative appraisal report prepared by an appraiser who is licensed in the State of Maine and qualified to appraise residential care facilities. The appraisal must provide two components of the historical cost: the current reproduction cost, adjusted for depreciation from all sources, and the fair market value. The Department, at its discretion, may require an alternative appraisal. The submission of an appraisal by a facility indicates the facility's agreement with the appraisal, and shall preclude any challenge to the appraisal by the...
