Ch. 7, § 4. General Provisions

(a) An allowable cost must be reasonable, ordinary, necessary, and related to patient care. (b) A nursing facility must deliver quality healthcare efficiently and economically. (c) Except as otherwise specified in this Chapter, the Department determines per diem rates using the methodology set forth in the Medicare Provider Reimbursement Manual ("PRM") and the CMS instructions for administering the PRM. The PRM and the CMS instructions are incorporated by reference and are available from the CMS. (d) The Department calculates per diem rates for nursing facilities using a combination of a cost-based system and a fixed price system.