Related Party Transactions

01. Principle. Allowability of costs applicable to services, facilities, and supplies furnished by entities related to the provider is subject to the regulations in 42 CFR 413.17, et al., and PRM. (7-1-26) 02. Determination of Common Ownership or Control. A provider organization is related to a supplying organization as defined under 42 CFR 413.17. If the elements of common ownership or control are not present in both organizations, the organizations are deemed unrelated. (7-1-26) 03. Cost to Related Organizations. The charges to a provider from related organizations may not exceed the billing to the related organization for these services. (7-1-26) 04. Costs Not Related to Patient Care. All home office costs not related to patient care are not allowed. (7-1-26) 05. Interest Expense. Interest expense on loans between related entities is not reimbursable under Chapters 2, 10, and 12, PRM. (7-1-26) IDAHO ADMINISTRATIVE CODE IDAPA 16.03.26 Department of Health & Welfare Medicaid Plan Benefits Section 047 Page 30 06. Exception. An exception to the general principle applicable to related organizations applies if the provider demonstrates they meet the requirements in 42 CFR 413.17(d). The exception is not applicable to sales, lease or rentals of hospitals, which do not meet the requirement that there be an open, competitive market for the facilities furnished under the PRM. (7-1-26) a. Rental expense for transactions between related entities will not be recognized. Costs of ownership will be allowed. (7-1-26) b. When a facility is purchased from a related entity, the purchaser's depreciable basis must not exceed the seller's net book value under the PRM. (7-1-26) 046. (RESERVED)