Icf/Iid: Property Rental Rate Reimbursement

ICFs/IID are paid a property rental rate. Property taxes, property insurance, depreciation expense, and major moveable equipment are reimbursed as costs exempt from limitations. The property rental rate does not include compensation for minor movable equipment. The property rental rate is paid in lieu of payment for amortization, depreciation, and interest for financing the cost of land and depreciable assets. (7-1-26) 01. Rate Calculation. Property rental rates are based upon current construction costs, age of a facility, type of facility, and major expenditures made to improve a facility, or a rate based upon current property costs. Amounts paid for each Medicaid day of care are phased in as follows: (7-1-26) a. “R” = “Property Base” x forty (40) - “Age” / forty (40) x “change in building costs” where: IDAHO ADMINISTRATIVE CODE IDAPA 16.03.26 Department of Health & Welfare Medicaid Plan Benefits Section 523 Page 116 (7-1-26) b. “R” = the property rental rate. (7-1-26) c. “Property Base”: (7-1-26) i. Eleven dollars and twenty-two cents ($11.22) for ICF/IID with wheelchair accommodations. (7-1-26) ii. Seven dollars and twenty-two cents ($7.22) for ICF/IID without wheelchair accommodations. (7-1-26) d. “Change in building costs” = the most recent CMI available to set a prospective rate for a period including all or part of the calendar year. (7-1-26) e. “Age” of facility = The effective age of the facility in years is set by subtracting the year in which a facility, or a new section, was constructed from the year in which the rate is applied. No facility or new section is assigned an age over thirty (30) years, however: (7-1-26) i. The age is set at thirty (30) years unless documentation is received to the contrary. Adequate documentation includes, but is not limited to, copies of building permits, tax assessors' records, receipts, invoices, building contracts, and original notes of indebtedness. An age is determined for each building. A weighted average using the age and square footage of the buildings becomes the effective age of a facility. The age of each building is based upon the date when construction on that building was completed. (7-1-26) ii. An effective age of a facility is further adjusted when the cost of major repairs, replacements, remodeling, or renovation of a building results in a change in age by at least one (1) year when applied to this formula: r = A x E / S x C Where: These changes do not decrease an effective age of a facility beyond the point where an increase in the property rental rate is more than three fourths (3/4) of the difference between the property rental rate “r” for a new facility at the time of a proposed rate revision and the property rental rate a facility was eligible for immediately before an adjustment. The cost for “C” is adjusted according to costs published by Marshall Swift Valuation Service reflecting current construction costs for average Class D convalescent hospitals. Providers must notify the Department with documented costs. The Department adjusts the age. (7-1-26) iii. The Department reimburses expenditures directly related to new requirements imposed by state or federal agencies, as an increase to the property rental rate if the expense exceeds one hundred dollars ($100) per bed. When costs related to a requirement are less than one hundred dollars ($100) per bed, the Department reimburses the Medicaid share of the entire cost of new requirements in a one-time payment to a facility within twelve (12) months of expense verification. (7-1-26) iv. “Age of facility” will be a revised age that is lesser of either the age established under this section, or the age that most closely yields the rate allowable to existing facilities. This revised age will not increase over time. (7-1-26) r = Reduction in the age of a facility in years. A = Age of a building at the time construction was completed. E = Actual expenses for construction provided the total costs were incurred within 24 months of completion of the construction. S = The number of square feet in a building at the end of construction. C = The cost of construction for buildings in the year construction was completed. IDAHO ADMINISTRATIVE CODE IDAPA 16.03.26 Department of Health & Welfare Medicaid Plan Benefits Section 524 Page 117 02. Facility Sale. When a facility, or asset of a facility, is sold, the buyer receives the property rental rate as calculated. (7-1-26)