General Definitions

As used in 101 CMR 204.00, unless the context requires otherwise, terms have the meanings in 101 CMR 204.02. Actual Utilization Rate. The percentage of occupancy of a resident care facility. It is calculated by dividing total resident days by maximum available bed days. Additions. New units or enlargements of existing units that may or may not be accompanied by an increase in licensed bed capacity. Base Year. The calendar year or portion of the calendar year that is used to compute the prospective rates as defined in 101 CMR 204.04. The base year for rates effective December 1, 2025, is 2023. Building. The structure that houses residents. Building costs include the direct cost of construction of the shell and expenditures for service equipment and fixtures such as elevators, plumbing, and electrical fixtures that are made a permanent part of the structure. Building costs also include the cost of bringing the building to productive use, such as permits, engineering and architect’s fees, and certain legal fees. Building costs include interest paid during construction, but not mortgage acquisition costs. When the fixed assets of a facility are sold, the allowable book value of all improvements will become part of the allowable basis of the building for the buyer. Center. The Center for Health Information and Analysis (CHIA), established under M.G.L. c. 12C. Change of Ownership. A bona fide transfer, for reasonable consideration, of all the powers and indicia of ownership. A change of ownership may not occur between related parties and must be a sale of assets of the facility rather than a method of financing. A change in the legal form of the provider does not constitute a change of ownership unless the other criteria are met. Community Support Facility. A resident care facility licensed by the Department in compliance with 105 CMR 150.000: Standards for Long-term Care Facilities that provides or makes arrangements to provide appropriate mental health services in addition to the minimum basic care and services required by 105 CMR 150.000 for residents who do not routinely require nursing or other medically related services. Community Support Resident. An individual in need of resident care facility services, who is 50 years of age or older, and who, upon the written consent of the individual (if he or she is competent to give such consent) or guardian (if he or she is not competent), and a physical evaluation by a psychiatrist or other physician, and a psychiatric evaluation by a psychiatrist, is deemed appropriate by both for residency and services provided by a community support facility pursuant to 105 CMR 150.000: Standards for Long-term Care Facilities or its most recent applicable regulation. Any exceptions and additional factors used to determine whether a resident is a community support facility resident will be in accordance with 105 CMR 150.000. Community Support Resident Days. The number of days of occupancy by community support residents in a community support facility or a resident care facility with community support residents. Community support resident days include the day of admission, but not the day of discharge. Where admission and discharge occur on the same day, one community support resident day will be used. Those days a bed is held vacant for a publicly aided community support resident temporarily placed in a different care situation, pursuant to an agreement between the provider and the Department of Transitional Assistance in accordance with duly established policies of said Department, are included as community support resident days. Those days a bed is held vacant for a non-publicly aided resident, whether or not there is a charge for such reservation by the facility, are included as community support resident days. Constructed Bed Capacity. A resident care facility’s bed capacity (or clinical bed capacity) as defined in 105 CMR 100.100: Definitions, which states: the capacity of a building to accommodate a bed and the necessary physical appurtenances in accordance with the applicable standards imposed as a condition of operation under state law. It includes a room designed or able to accommodate a bed and necessary physical appurtenances, whether or not a bed and all such appurtenances are actually in place, with any necessary utilities (e.g., drinking water, sprinkler lines, oxygen, electric current, electric signals, etc.), with either outlets or capped lines within the room. Deferred Charges. Expenditures, such as prepaid insurance, rent or licenses, not recognized as a cost of operations for the period in which they were incurred, but carried forward to be written off in one or more future periods. Deferred charges are not expenditures that can be identified with and justified as relating to physical assets that will contribute services to future operations. Department. The Massachusetts Department of Public Health. Department of Transitional Assistance Days (DTA Days). Days of resident care facility services provided to residents who are recipients of Emergency Assistance for the Elderly, Disabled and Children (EAEDC) or Supplemental Security Income/State Supplemental Payments (SSI/SSP) funded by DTA. Desk Audit. A comprehensive audit performed at the Center’s offices in which the auditor evaluates the accuracy of the information in the cost reports and supporting documentation in accordance with an audit program. Direct Restorative Therapy. Services of physical therapists, occupational therapists, and speech, hearing, and language therapists provided directly to individual residents to reduce physical or mental disability and to restore the resident to maximum functional level. Direct restorative therapy services are provided only upon written order of a physician, physician assistant, or nurse practitioner who has indicated anticipated goals and frequency of treatment to the individual resident. EOHHS. The Executive Office of Health and Human Services established under M.G.L. c. 6A. Equipment. Tangible fixed assets, usually moveable, that are accessory or supplemental to such larger items as buildings and structures. Exit Conference. A conference conducted at the close of an on-site field audit at which the Center auditors present audit findings and recommendations to the provider. The provider may respond to the Center’s findings and may present additional information for review. The conference may take place at a scheduled meeting or by telephone. Field Audit. An audit performed on site at the resident care facility in which the auditor evaluates the accuracy of the information in the cost reports and claim for reimbursement by examining the books and records of the facility by evaluating internal controls, observing the physical plant, and interviewing resident care facility staff. Fixed Costs. Indirect resident care costs, independent of the level of occupancy, including interest associated with long-term debt; depreciation of buildings; building improvements; equipment and software; equipment; insurance on buildings and equipment; real estate taxes; rent; the non-income related portion of the Massachusetts corporate excise tax; personal property tax; and equipment rental. Generally Available Employee Benefits. The employee benefits that are reasonable and necessary for the efficient operation of the facility including, but not limited to, insurance, pensions, bonuses, child care, and non-required but job-related education. Such benefits must be nondiscriminatory and available to all full-time employees. Improvements. Expenditures that increase the quality of the existing building by rearranging the building layout or substituting improved components for old components so that facilities are in some way better than before the renovation. Improvements do not add to the existing building nor do they expand the square footage of the building. An improvement is measured by the facility’s increased productivity, greater capacity, or longer life. Imputed Value. An alternative cost based on a standard amount to be used by EOHHS in lieu of other costs. Indirect Restorative Therapy. Services of physical therapists, occupational therapists, and speech, hearing, and language therapists to provide orientation programs for aides and assistants, in- service training to staff, and consultation and planning for continuing care after discharge. Industrial Accident Resident. A person receiving resident care facility services for which an employer or an insurer is liable under M.G.L. c. 152 (the Workers’ Compensation Act). Land Costs. The purchase price plus the cost of bringing land to productive use including, but not limited to, commissions to agents, attorney’s fees, demolition of buildings, clearing and grading the land, site-survey, soil investigation, streets, off-site sewer and water lines, and public utility charges necessary to service the land. Land must be necessary for the care of publicly aided residents. Licensed Bed Capacity. A resident care facility’s licensed bed capacity as defined by 105 CMR 100.100: Definitions, which states: the portion of bed capacity, by number of beds, which a provider under its license, as issued or subsequently modified, is authorized to use for patient occupancy, or in the case of a facility operated by a government agency, the number of beds approved by the Department. Limited Life Assets. Limited life assets include software, wallpaper, and painting. Long-term Interest Expense. Reasonable and necessary expense that is incurred for the use of legitimate loans related to the care of publicly aided residents and that is supported by allowable, depreciable fixed assets. It includes all of the costs of borrowing money including, but not limited to, interest, allowable mortgage acquisition costs, and mortgage insurance premiums. Major Additions. A newly constructed addition to a facility that increases the licensed bed capacity of the facility by 50% or more. Massachusetts Corporate Excise Tax. Those taxes that have been paid to the Massachusetts Department of Revenue in connection with the filing of Form 355, Business/Manufacturing Corporate Excise Return. Maximum Available Bed-days. The total number of licensed bed-days for the calendar year, determined by multiplying the mean licensed bed capacity for the calendar year by the days in the calendar year. Mean Licensed Bed Capacity. A facility’s weighted average licensed bed capacity for the calendar year. The value is calculated by multiplying the licensed bed capacity by the number of days in the calendar year for which the facility was licensed to determine the maximum available bed-days. The maximum available bed-days is divided by the number of days in the calendar year to determine the mean licensed bed capacity. Mortgage Acquisition Costs. Those costs, including finder’s fees, points, certain legal fees, and filing fees, that are necessary to obtain long-term financing through a mortgage, bond, or other long-term debt instrument. Nonprofit Provider. A provider either organized for charitable purposes or recognized as a nonprofit entity by the Internal Revenue Service. This includes Massachusetts corporations organized under M.G.L. c. 180; clubs, associations, organizations, or tax-exempt entities; corporations organized under M.G.L. c. 156B and granted a tax exemption under the Internal Revenue Code, § 501(c)(3); and facilities owned or operated by governmental units. Nursing Facility. A nursing or convalescent home, infirmary maintained in a town, or charitable home for the aged, as defined in M.G.L. c. 111, § 71, or a nursing facility operating under a hospital license issued by the Department pursuant to M.G.L. c. 111, and certified by the Department for participation in the MassHealth program, or facilities licensed to operate a residential care unit within a nursing facility or those exempt from licensure under M.G.L. c. 111, § 73B. Proprietary Provider. A provider that does not meet the criteria specified in 101 CMR 204.02: General Definitions: Nonprofit Provider. Provider. A resident care facility providing care to publicly aided residents. Prudent Buyer Concept. The assumption that a purchase price that exceeds the market price for a supply or service is an unreasonable cost. Publicly Aided Resident. A person as to whose care in a resident care facility the Commonwealth or a political subdivision of the Commonwealth is in whole or in part financially liable. Rate Year. The period in which the rate determined under 101 CMR 204.00 is effective. Related Party. An individual or organization associated or affiliated with, or that has control of, or is controlled by, the provider; or any director, stockholder, trustee, partner, or administrator of the provider by common ownership or control or in a manner specified in the Internal Revenue Code of 1954, §§ 267(b), 267(c), and 318; provided, however, that 10% must be the operative factor as set out in §§ 267(b)(2) and (3). Related individuals include spouses, parents, children, spouses of children, grandchildren, siblings, fathers-in-law, mothers-in-law, brothers-in-law, and sisters-in-law. Resident Care Facility (Facility). A facility licensed by the Department in compliance with 105 CMR 150.000: Standards for Long-term Care Facilities or exempt from licensure under M.G.L. c. 111, § 73B providing protective supervision in addition to the minimum basic care required by 105 CMR 150.000 for residents who do not routinely require nursing or other medically related services, and for purposes of 101 CMR 204.00, residential care units in nursing facilities that do not have established rates for nursing facility services pursuant to 101 CMR 206.00: Standard Payments to Nursing Facilities. Resident Days. The number of days of occupancy by residents in a facility. Included in the computation of resident days is the day of admission, but not the day of discharge. Where admission and discharge occur on the same day, one resident day is used. Those days in which a bed is held vacant and reserved for a publicly aided resident temporarily placed in a different care situation, are included as resident days. Those days on which a bed is held vacant and reserved for a non-publicly aided resident, whether or not there is a charge for such reservation by the facility, are included as resident days. Responsible Person. A person 21 years of age or older who has received a high school diploma, is of good moral character, and has the ability to communicate orally and in writing in English or the primary language used by residents of the facility, and who will make mature and accurate judgments regarding the care needs of the residents as required by 105 CMR 150.000: Standards for Long-term Care Facilities. Sole Proprietor. A business enterprise other than a corporation or partnership in which the net worth belongs entirely to one individual. Support Service Coordinator. A person who has received a BA or BS degree in a human service field of study such as psychology, nursing, or social work and who is employed by a community support facility to identify, monitor, and meet the support service needs of community support residents. Support Services. Those services provided for the benefit of community support resident(s) in order to enhance psycho-social and physical functioning as defined by the Department in 105 CMR 150.000: Standards for Long-term Care Facilities. Unit. Unit has the same definition as in 105 CMR 150.000: Standards for Long-term Care Facilities. Variable Costs. Costs that change depending on the volume of occupancy. Variable costs include the allowable amounts reported in the following accounts from the cost report: administrator/responsible person salaries and benefits; clerical salaries; EDP/payroll/bookkeeping services; office supplies; telephone, except directory advertising; motor vehicle expense; conventions and meetings; advertising, help wanted; licenses and dues, resident care related; total education and training; total employee benefits, except officers, profit sharing and other benefits; accounting services not related to appeals; total payroll taxes, except officer; nonprofit DES claims; malpractice and general liability insurance; total Workers’ Compensation, except officer; total group life/health, except officer; total plant operations; total dietary; total laundry; total housekeeping; total nursing; quality assurance professional; community support coordinator; total physician services; house supplies, not resold; pharmacy consultant; social service worker; indirect therapy salaries; indirect therapy consultants; total recreation, except transportation; realty company variable add-back; management company variable and fixed cost add-back, less non-allowable self-disallowances; vending machine income; and other operating cost recoverable income.