Compensation

1. Compensation on an annual basis for top management personnel must be limited, prior to allocation, if any, to the greatest of: a. The highest market-driven compensation of an administrator employed by a freestanding not-for-profit facility during the previous report year increased by the consumer price index for all urban consumers, United States city average, all items; b. If the facility is combined with a nursing facility or hospital, the compensation limit for top management personnel as determined by chapter 75-02-06, except the allocation of the compensation to the basic care facility may not exceed subdivision a; or c. For a facility licensed before July 1, 2016, which is located in North Dakota and shares a home office that is also located in North Dakota with no more than two nursing facilities that are located in North Dakota, but whose cost report does not include nursing facility costs, the compensation limit for top management personnel as determined by chapter 75-02-06, except the allocation of the compensation to the basic care facility may not exceed subdivision a. 2. Compensation for top management personnel employed for less than a year must be limited to an amount equal to the limitation described in subsection 1, divided by three hundred sixty-five times the number of calendar days the individual was employed. 3. Compensation includes: a. Salary for managerial, administrative, professional, and other services; b. Amounts paid for the personal benefit of the individual, e.g., housing allowance, flat-rate automobile allowance; c. The cost of assets and services the individual receives from the provider; d. Deferred compensation, pensions, and annuities; e. Supplies and services provided for the personal use of the individual; f. The cost of a domestic or other employee who works in the home of the individual; or g. Life and health insurance premiums paid for the individual and medical services furnished at facility expense. 4. Reasonable compensation for a person with at least five percent ownership, individuals on the governing board, or any individual related within the third degree of kinship to top management personnel must be considered an allowable cost if services are actually performed and required to be performed. The amount to be allowed must be an amount determined by the department to be equal to the amount required to be paid for the same services if provided by a nonrelated employee to a North Dakota facility. Reasonableness also requires that functions performed be necessary in that, had the services not been rendered, the facility would have to employ another person to perform them. Reasonable hourly compensation may not exceed the amount determined under subsection 1, divided by two thousand eighty. 5. Costs otherwise nonallowable under this chapter may not be included as compensation.