016.06.8-4-3A. Instructions for Cost Report Forms
AR ADC 016.06.8-4-3AArkansas Administrative CodeEffective: August 14, 2022
Effective: August 14, 2022
Ark. Admin. Code 016.06.8-4-3A
016.06.8-4-3A. Instructions for Cost Report Forms
The true name of the long term care facility as licensed by the Department of Human Services, Division of Medical Services.
The facility's Medicaid provider number in effect for the dates of the cost report. This is the nine (9) digit number used to bill for Medicaid services.
The name by which the long term care facility operates (complete only if different from facility name above).
The facility's administrator at the close of the cost reporting period and their Arkansas license number.
The person employed by the facility who should be contacted regarding the cost report and their telephone number.
Identify where the financial records used to complete the cost report are located.
List the name, address and telephone number of the person to whom all correspondence, desk reviews, audits, etc. should be addressed. Each facility is allowed only one name and address in this section.
Complete this section if the facility pays management fees. A narrative description of purchased management services or a copy of contracts for managed services must be submitted with the cost report in order for management fees to be allowed. Check the applicable identification as to whether the management company is related party or non-related.
The Certification by Officer or Administrator of Provider is required and must include an original signature (not a copy) by an authorized officer or the administrator of the facility. The cost report will not be deemed received by the Division of Medical Services if this certification has not been completed.
The cost report may be completed by the facility's employees, owners, independent accountants, or other qualified parties. If a Certified Public Accountant prepares the cost report, the cost report must be accompanied by the appropriate compilation, review or audit report. The cost report must be completed in addition to any other items required by the Guidelines for Financial and Compliance Audits of Programs Funded by the Arkansas Department of Human Services.
Check the appropriate blocks that apply to your facility. Check only one block on each of Lines 1 and 3. Line 2 must have a box checked on each of Lines A, B, C and D. Line 2B and/or 2C should be checked “Yes” if any owner (individual, partnership, corporation, etc.) of this facility with a 5% or greater ownership also owns a 5% or greater share of any other nursing facility/facilities.
Complete the number of actual resident days by type of resident (payment source).
All Medicaid reimbursed days will be identified here. This category will also include Medicaid reimbursed reserved bed days due to hospitalization and therapeutic home leave.
All private pay reimbursed days by the resident, resident's family, etc. will be identified here. This category will also include private pay reimbursed reserved bed days due to hospitalization and home therapeutic leave.
Complete the number of actual resident days by resident level of care -- Column (A) Total resident days, Column (B) Skilled resident days, Column (C) Intermediate I resident days, Column (D) Intermediate II resident days, and Column (E) Intermediate III resident days. Line 4.2, Column A must agree with Line 4.1, Column A.
Complete the number of Medicaid resident days by resident level of care -- Column (A) Total Medicaid resident days, Column (B) Skilled resident days, Column (C) Intermediate I resident days, Column (D) Intermediate II resident days, and Column (E) Intermediate III resident days. Line 4.3, Column A must agree with Line 4.1, Column B.
Identify the number of beds licensed at the beginning and end of the period. Temporary changes because of alterations, repairs, etc. do not affect bed capacity.
Compute the total licensed bed days available during the period by multiplying the number of beds available for the period by the number of days in the period. Any increase or decrease in the number of beds must be taken into consideration as well as the number of days elapsed during each increase or decrease.
The percentage of occupancy for the cost report period is computed by dividing the total resident days from Line 4.1, Column A by the bed days available on Line 8. The decimal place will be carried out to four places. Example -- 92.31%.
A resident day is the period of service for one resident for one day of care. For cost reporting purposes, a day paid is considered a resident day. This means that a paid reserved bed will be counted toward total resident days. Examples of paid reserved beds include resident leave of absences from the facility to the hospital or therapeutic home visit that are paid by any source.
The day of the resident's admission is counted but the day of discharge is not counted as a resident day. When a resident is admitted and discharged on the same day, this period must be counted as one resident day.
List Medicaid resident days for the reporting period by month. The total of this column must agree with Form 3, Line 4.1, Column B.
List Medicare resident days for the reporting period by month. The total of this column must agree with Form 3, Line 4.1, Column C.
List private pay resident days for the reporting period by month. The total of this column must agree with Form 3, Line 4.1, Column D.
List all other types of resident days for the reporting period by month. The total of this column must agree with Form 3, Line 4.1, Column E.
Total of Columns 2, 3, 4, and 5. The total of this column must agree with Form 3, Line 4.1, Column A.
List the total number of bed days available for each month. The total of this column must agree with Form 3, Line 8.
List the facility's third party daily rates for both private rooms and semi-private rooms that were effective during the reporting period. The list should include all rates that were effective during the reporting period. Also list the number of resident days by level of care by payor source and room type. The resident days by payor source and room type plus Medicaid days by level of care must equal Form 3, Line 4.2.
All revenue, regardless of source, is to be entered on the appropriate line in Column 1 on this schedule and should agree with the revenue and adjustment account balances recorded on the submitted adjusted trial balance. As described in Section 3-4, adjustments to specific expenses per revenue amounts can be identified in Column 2 in lieu of determining and eliminating the actual cost. Column 3 is to be used to identify which Form 6 line number is being adjusted if the revenue is used to reduce the expense. Provide a separate detailed schedule for Form 6 line number corresponding adjustment amounts when more than one Form 6 line number is to be adjusted.
Medicaid, Private, Medicare Part A, and other Third Party amounts received and receivable for services/supplies usually reimbursed on a per diem or monthly basis.
Physical Therapy, Occupational Therapy, Speech Therapy, medical supplies and other ancillary services/supplies billed separately to Medicare Part A.
Physical Therapy, Occupational Therapy, Speech Therapy and medical supplies amounts received and receivable for Medicare Part B reimbursed services.
Amounts received and receivable for other ancillary services/supplies/therapies/medical supplies when paid separately from a resident's all inclusive per diem or monthly payment. Amounts received from the sale of other ancillary supplies/services to employees or other non-residents will be included here. Attach a detail schedule of adjustments made for other third party ancillaries.
Amounts received and receivable for drugs and pharmaceuticals from residents, employees or other non-residents.
Amounts received from contributions, gifts, grants, etc.
Amounts received and receivable for nurse aide training and testing.
Amounts received and receivable for other. Attach a detail schedule of other income items.
Any other necessary adjustments including excess direct compensation as described in Sections 3-2.B. and 3-2.O.
Column 1 -- Enter the expenses per the adjusted trial balance on the appropriate line. Do not net general ledger expenses by omitting from the first column any non-allowable items. Columns 2 and 5 must be used to reclassify or adjust out any non-allowable items. Line 6, Column 1 must agree with Form 5, Line 21.
Column 2 -- This column is for any reclassification that should be made between expenses. The total for Column 2 on Line 6 must be zero.
Column 3 -- This column is used to make adjustments for related party expenses. Example -- to remove unallowable related party rent included on Line 3-09 or 3-10 and record the actual cost of amortization, depreciation, interest, property insurance and property taxes on Lines 3-01, 3-02, 3-03, 3-04, 3-05, 3-06 and 3-08. This column will include the total net adjustments to allowable cost for related management company/home office expense reported on Line 2-50.
Column 4 -- Column 1 plus or minus Column 2 and Column 3.
Column 5 -- Adjustments to expenses will be entered in Column 5. These adjustments will include Form 5 revenue adjustments and unallowable expenses, etc. This column will include adjustments for excess direct facility compensation as described in Section 3-2.B.
Column 6 -- Column 4 plus or minus Column 5 adjustments.
Line 1-01, Salaries -- Aides
Salaries of certified nurse aides and nurse aides in training.
Line 1-02, Salaries Medication Assistants
Salaries of Medication Assistants-Certified
Line 1-03, Salaries -- LPN's
Salaries of licensed practical nurses and graduate practical nurses.
Line 1-04, Salaries -- RN's (exclude DON and Assistant DON)
Salaries of registered nurses and graduate nurses (excluding the DON and Assistant DON).
Line 1-05, Salaries -- Assistant Director of Nursing
Salaries of the Assistant Director of Nursing.
Line 1-06, Salaries -- Director of Nursing
Salaries of Director of Nursing.
Line 1-07, Salaries -- Occupational Therapists
Salaries of occupational therapists. Therapy costs which are reimbursed by Medicare Part A, Medicare Part B or a third party payer should be reclassified to Line 5-11.
Line 1-08, Salaries -- Physical Therapists
Salaries of physical therapists. Therapy costs which are reimbursed by Medicare Part A, Medicare Part B or a third party payer should be reclassified to Line 5-11.
Line 1-09, Salaries -- Speech Therapists
Salaries of speech therapists. Therapy costs which are reimbursed by Medicare Part A, Medicare Part B or a third party payer should be reclassified to Line 5-11.
Line 1-010, Salaries -- Other Therapists
Salaries of therapists other than occupational therapists, physical therapists and speech therapists. Therapy costs which are reimbursed by Medicare Part A, Medicare Part B or a third party payer should be reclassified to Line 5-11.
Line 1-11, Salaries -- Rehabilitation Nurse Aides
Salaries of rehabilitation nurse aides and/or Health Rehabilitative Nurse Aides.
Line 1-12, FICA -- Direct Care
Cost of employer's portion of Social Security Tax for direct care employees.
Line 1-13, Group Health -- Direct Care
Cost of employer's contribution to employee health insurance for direct care employees.
Line 1-14, Pensions -- Direct Care
Cost of employer's contribution to employee pensions for direct care employees.
Line 1-15, Unemployment Taxes -- Direct Care
Cost of employer's contribution to State and Federal unemployment taxes for direct care employees.
Line 1-16, Uniform Allowance -- Direct Care
Employer's cost of uniform allowance and/or uniforms for direct care employees.
Line 1-17, Worker's Compensation -- Direct Care
Cost of worker's compensation insurance for direct care employees.
Line 1-18, Other Fringe Benefits -- Direct Care (Schedule)
Cost of other fringe benefits not specifically noted on Line 1-11 through 1-16. A schedule must be attached that details the amount on this line.
Line 1-19, Contract -- Aides
Cost of aides hired through contract that are not facility employees.
Line 1-20, Contract Medication Assistants
Cost of Medication Assistants-Certified hired through contract that are not facility employees.
Line 1-21, Contract -- LPN's
Cost of LPN's and graduate practical nurses hired through contract that are not facility employees.
Line 1-22, Contract -- RN's
Cost of RN's and graduate nurses hired through contract that are not facility employees.
Line 1-23, Contract -- Occupational Therapists
Cost of occupational therapists hired through contract that are not facility employees. Therapy costs, which are reimbursed by Medicare Part A, Medicare Part B or a third party payer, should be reclassified to Line 5-11.
Line 1-24, Contract -- Physical Therapists
Cost of physical therapists hired through contract that are not facility employees. Therapy costs, which are reimbursed by Medicare Part A, Medicare Part B or a third party payer, should be reclassified to Line 5-11.
Line 1-25, Contract -- Speech Therapists
Cost of speech therapists hired through contract that are not facility employees. Therapy costs, which are reimbursed by Medicare Part A, Medicare Part B or a third party payer, should be reclassified to Line 5-11.
Line 1-26, Contract -- Other Therapists
Cost of therapists other than occupational therapists, physical therapists and speech therapists hired through contract that are not facility employees. Therapy costs, which are reimbursed by Medicare Part A, Medicare Part B or a third party payer, should be reclassified to Line 5-11.
Line 1-27, Consultant Fees -- Nursing
Fees paid to nursing personnel, not on the facility payroll, for providing advisory and educational services to the facility.
Line 1-28, Training Direct Care (Schedule)
Cost of training related to resident care for RN's, LPN's and Certified Nurse Aides. Also includes travel costs associated with this training. Training cost for Nurse Aide certification should be on Line 5-10, non-allowable nurse aide training. A detailed schedule must be submitted that agrees with the amount on this line. The schedule will include for each expenditure the date, description of training, destination, person traveling, expense description, and the cost.
Line 1-29, Over-the-Counter Drugs
Cost of over-the-counter drugs provided by the facility to its residents.
Line 1-30, Oxygen
Cost of oxygen and related supplies.
Line 1-31, Medical Supplies -- Direct Care
Cost of providing direct medical care. Includes by illustration:
• Single use disposable items and consumable supplies that are used in the course of providing direct medical care to a resident, such as catheters, syringes, sterile dressings, prep supplies, alcohol pads, Betadine solution in bulk, tongue depressors, and cotton balls.
• Pressure relieving devices that cannot be used by more than a single resident or that would be classified as minor equipment.
• Minor medical equipment used in providing direct medical care such as thermometers, sphygmomanometers, stethoscopes, etc.
• Costs of supplies for which Medicare Part B revenue is received must be reclassified to Line 5-11 in Column 2 or removed in Column 5 per Form 5 revenue adjustments.
Cost associated with point of care software applications.
• Cost of operating a point of care software application that does not require capitalization.
• Depreciation of capitalized cost associated with a point of care software application reclassified from Section 3.
• Interest expense associated with a point of care software application reclassified from Section 3.
• Rent expense associated with a point of care software application reclassified from Section 3.
Line 1-32, Therapy Supplies
The cost of supplies used directly by the therapy staff for rendering therapeutic service to the residents of the facility. Costs of therapy supplies for which other third party income is received (Medicare Part A, Medicare Part B, etc.) must be reclassified to Line 5-11 in Column 2 or removed in Column 5 per Form 5 revenue adjustments.
Line 1-33, Raw Food
Cost of food products used to provide meals and snacks to residents.
Line 1-34, Food -- Supplements
Cost of food products given in addition to normal meals and snacks under doctor's orders.
Line 1-35, Incontinence Supplies
Cost of incontinence supplies to include both disposable and linen diapers, and disposable underpads.
Line 1-36, Dental (Schedule)
Cost of dentist advisory services (not individual resident specific). All other dental expenses must be reclassified to Line 5-11 in Column 2. A schedule must be attached that details the amount on this line.
For Arkansas Health Center Nursing Facility (AHC), all dental services are allowable.
Line 1-37, Drugs Legend
Cost of prescription drugs are allowable only for AHC. Other nursing facilities must reclassify these costs to Line 5-11 in Column 2.
Line 1-38, Lab and X-Ray
Cost of lab and x-ray services are allowable only for AHC. Other nursing facilities must reclassify these costs to Line 5-11 in Column 2.
Line 1-39, Total Direct Care Costs
Line 1-39 is the sum of Line 1-01 through Line 1-38.
Line 2-01, Salaries -- Administrator
Salaries of licensed administrators excluding owners.
Line 2-02, Salaries -- Assistant Administrator
Salaries of licensed assistant administrators excluding owners.
Line 2-03, Salaries -- Dietary
Salaries of kitchen personnel including dietary supervisor, cooks, helpers and dishwashers.
Line 2-04, Salaries -- Housekeeping
Salaries of housekeeping personnel including housekeeping supervisors and staff.
Line 2-05, Salaries -- Laundry
Salaries of laundry personnel including laundry supervisor and staff.
Line 2-06, Salaries -- Maintenance
Salaries of personnel involved in operating and maintaining the physical plant, including maintenance supervisor and staff.
Line 2-07, Salaries -- Medical Records
Salaries of medical records personnel.
Line 2-08, Salaries -- Other Administrative
Salaries of other administrative personnel including bookkeeper, receptionist, administrative assistants and other office and clerical personnel.
Line 2-09, Salaries -- Activities
Salaries of personnel providing an ongoing program of activities designed to meet, in accordance with the comprehensive assessment, the interest and the physical, mental, and psychosocial well being of the residents.
Line 2-10, Salaries -- Pharmacy
Salaries of pharmacy employees (AHC only).
Line 2-11, Salaries -- Social Services
Salaries of personnel providing medically related social services to attain or maintain the highest practicable physical, mental or psychosocial well being of the residents.
Line 2-12, Salaries -- Owner or Owner/Administrator
Salaries of all owners of the facility.
Line 2-13, FICA -- Indirect, Administrative and Operating
Cost of employer's portion of Social Security Tax for administration and operating employees.
Line 2-14, Group Health -- Indirect, Administrative and Operating
Cost of employer's contribution to employee health insurance for administration and operating employees.
Line 2-15, Pensions -- Indirect, Administrative and Operating
Cost of employer's contribution to employee pensions for administration and operating employees.
Line 2-16, Unemployment Taxes -- Indirect, Administrative and Operating
Cost of employer's contribution to State and Federal unemployment taxes for administration and operating employees.
Line 2-17, Uniform Allowance -- Indirect, Administrative and Operating
Employer's cost of uniform allowance and/or uniforms for administration and operating employees.
Line 2-18, Worker's Comp -- Indirect, Administrative and Operating
Cost of worker's compensation insurance for administration and operating employees.
Line 2-19, Other Fringe Benefits -- Indirect, Administrative & Operating (Schedule)
Cost of other fringe benefits not specifically noted on Line 2-13 through 2-18. A schedule must be attached that details the amount on this line.
Line 2-20, Contract -- Dietary
Cost of dietary services and personnel hired through contract that are not facility employees.
Line 2-21, Contract -- Housekeeping
Cost of housekeeping services and personnel hired through contract that are not facility employees.
Line 2-22, Contract -- Laundry
Cost of laundry services and personnel hired through contract that are not facility employees.
Line 2-23, Contract -- Maintenance
Cost of maintenance services and personnel hired through contract that are not facility employees.
Line 2-24, Consultant Fees -- Dietitian
Fees paid to consulting registered dietitians.
Line 2-25, Consultant Fees -- Medical Records
Fees paid to consulting Accredited Records Technicians or Medical Records Administrators.
Line 2-26, Consultant Fees -- Activities
Fees paid to activities personnel, not on the facility payroll, for providing advisory services to the facility.
Line 2-27, Consultant Fees -- Medical Director
Fees paid to a medical doctor, not on the facility payroll, for providing advisory, educational and emergency medical services to the facility.
Line 2-28, Consultant Fees -- Pharmacy
Fees paid to a registered pharmacist, not on the facility payroll, for providing advisory and educational services to the facility.
Line 2-29, Consultant Fees -- Social Worker
Fees paid to a social worker, not on the facility payroll, for providing advisory and educational services to the facility.
Line 2-30, Consultant Fees -- Therapists
Fees paid to licensed therapists, not on the facility payroll, for providing advisory and educational services to the facility.
Line 2-31, Barber and Beauty Expense -- Allowable
The cost of barber and beauty services provided to residents by facility staff.
Line 2-32, Transportation
In lieu of actual costs, the facility may report on this line allowable amounts claimed (rate per mile) for facility owned or other vehicles used in providing residents medical transportation to local “community” providers or used for business related mileage (as described in Section 3-2.K).
This line should also include cost of providing residents medical transportation to local “community” providers when the facility obtains this service from an outside source.
Line 2-33, Resident Activities
Cost of resident activities should include pastoral services, recreational activities and supplies.
Line 2-34, Care Related Supplies
Personal hygiene items such as soaps, deodorants, shampoos, toothbrush, toothpaste, razor, razor blades etc. Includes minor equipment provided by the facility that is not used in providing direct medical care such as water pitchers, wash basin, emesis basin, bedpan, urinal. hot water bottles, heating pads, crutches, walkers, etc. Includes nurse charting forms, admission forms, medication and treatment records, physician order forms.
Line 2-35, Accounting Fees
Fees incurred for the preparation of the cost report, audits of the financial records, bookkeeping services, tax return preparation of the nursing facility and other related services, excluding personal tax planning and personal tax return preparation.
Line 2-36, Advertising for Labor/Supplies
Allowable advertising expense.
Line 2-37, Amortization Expense -- Non-Capital (Schedule)
Costs incurred for legal and other expenses when organizing a corporation should be amortized over a period of 60 months. Attach a detail amortization schedule for these costs. These costs are not to be included on the For 7 depreciation schedule.
Line 2-38, Bank Service Charges
Fees paid to banks for service charges, excluding penalties and insufficient funds charges.
Line 2-39, Criminal Records Checks
Cost of Criminal Records Checks for employees and job applicants.
Line 2-40, Data Processing Fees
Cost of purchased services for data processing systems and services.
Line 2-41, Dietary Supplies
Costs of consumable items such as soap, detergent, napkins, paper cups, straws, etc. used in the dietary department.
Line 2-42, Dues (Schedule)
A detailed schedule of dues must be included. The schedule should include the dates and purpose covered by the charge.
Line 2-43, Educational Seminars and Training
The cost of registration for attending non-direct care related educational seminars and training by employees of the facility and costs incurred in the provision of non-direct care related in-house training for facility staff. The cost of any travel incurred to attend an educational seminar will be included on Line 2-56, Travel.
Line 2-44, Governing Body (Schedule)
Costs incurred by members of the facility governing body to attend meetings. Attach a detail schedule of the members' names and costs incurred.
Line 2-45, Housekeeping Supplies
Cost of consumable housekeeping items including waxes, cleaners, soap, brooms and lavatory supplies.
Line 2-46, Laundry Supplies
Cost of consumable goods used in the laundry including soap, detergent, starch and bleach.
Line 2-47, Legal Fees (Schedule)
Fees paid to attorneys in accordance with other provisions of the State Plan. A schedule must be attached that details the amount on this line.
Line 2-48, Linen and Laundry Alternatives
Cost of mattress covers, sheets, blankets, pillows, and gowns.
Line 2-49, Miscellaneous (Schedule)
Costs incurred in providing nursing facility services that cannot be assigned to any other line item on Form 6. A schedule must be attached that details the amount on this line.
Line 2-50, Management Fees and Home Office Costs
The cost of purchased management services or home office costs incurred that are allocable to the provider. See Form 15 for calculation of allowable home office costs.
Line 2-51, Office Supplies and Subscriptions
Cost of consumable goods used in the business office such as pencils, paper, and computer supplies. Cost of printing forms and stationary including accounting and census forms, charge tickets, facility letterhead and billing forms. Cost of subscribing to newspapers, magazines and periodicals.
Line 2-52, Postage
Cost of postage, including stamps, metered postage, freight charges and courier services.
Line 2-53, Repairs and Maintenance
Supplies and services, including electricians, plumbers, extended service agreements, etc., used to repair the facility building, furniture, equipment, vehicles and vehicle insurance.
Line 2-54, Taxes -- Other (Schedule)
The cost of property taxes on automobiles and other taxes paid that are not included on any other line on Form 6. A schedule must be attached to the cost report in order for the costs to be considered in the determination of allowable costs.
Line 2-55, Telephone and Communications
Cost of telephone services, WATS lines and FAX services.
Line 2-56, Travel (Schedule)
Cost of travel (airfare, lodging, meals, etc.) by Administrator and other authorized personnel to attend professional and continuing educational seminars and meetings related to their position within the facility. A detailed schedule must be submitted that agrees with the amount on this line. The schedule will include for each expenditure the date, destination, person traveling, purpose of the trip, expense description, and the cost.
Line 2-57, Utilities
Cost of water, sewer, gas, electric, and garbage collection services. Cost of television and cable services for common use areas in the facility.
Line 2-58, Depreciation Vehicles and Software
Depreciation on the facility's vehicles and software. Column 6 of Line 2-58 must agree with Form 7, Page 3, Vehicle Depreciation line, Column 5 and Form 7, Page 3, Software Depreciation line, Column 5.
Line 2-59, Interest Working Capital, Vehicles and Software
Interest paid on short term borrowing for facility operations. Also, interest paid or accrued on loans, the proceeds of which were used to purchase vehicles or software. The total of Line 2-59, Column 6, must agree with the Form 10, Page 3, Totals Column, Line 12.
Line 2-60, Total Indirect, Administrative and Operating Costs
Line 2-60 is the sum of Line 2-01 through Line 2-59.
Amounts for depreciation, Rent Building and Rent Furniture and Equipment must be identified for historical purposes only. A Fair Market Rental Payment is made in lieu of these expenses.
Line 3-01, Amortization Expense -- Capital (Schedule)
Legal and other costs incurred when financing the facility should be amortized over the life of the mortgage. Attach a detail amortization schedule for these costs. These costs are not to be included on the Form 7 depreciation schedule.
Line 3-02, Depreciation Fair Market Rental
Depreciation on the facility's buildings, furniture, equipment, leasehold improvements and land improvements. Items costing $2,500 or more will be capitalized.
Depreciation expense associated with point of care software applications must be reclassified to Line 1-29.
Line 3-03, Depreciation Generator
Depreciation on generators approved by the Office of Long Term Care under Act 1602 of 2001.
Line 3-04, Interest Expense Fair Market Rental
Interest paid or accrued on notes, mortgages and other loans, the proceeds of which were used to finance the fixed assets or major movable equipment. The total of Line 3-04, Column 6 must agree with the Form 10, Page 3, Totals Column, Line 10.
Interest expense associated with point of care software applications must be reclassified to Line 1-29.
Line 3-05, Interest Expense Generator
Interest paid or accrued on notes the proceeds of which were used to purchase a generator approved by the Office of Long Term Care under Act 1602 of 2001. The total of Line 3-05, Column 6 must agree with the Form 10, Page 3, Totals Column, Line 11.
Line 3-06, Property Insurance
Cost of fire and casualty insurance on facility buildings and equipment.
Line 3-07, Professional Liability Insurance
Cost of premiums for insuring the facility against injury and malpractice claims. The allowable insurance premium cost for nursing facilities (excluding Arkansas Health Center) is capped at $2,500 per licensed bed as of the end of the cost reporting period.
Line 3-08, Property Taxes
Taxes levied on the facility's land, buildings, furniture and equipment.
Line 3-09, Rent -- Building
Cost of leasing the facility's real property.
Line 3-10, Rent -- Furniture and Equipment
Cost of leasing the facility's furniture, equipment and vehicles.
Rent expense associated with point of care software applications must be reclassified to Line 1-29.
Line 3-11, Total Property
Line 3-11 is the sum of Line 3-01 through Line 3-10.
Cost of the quality assurance fee paid monthly to the Department Human Services.
Line 5-01, Advertising
Costs of unallowable advertising.
Line 5-02, Bad Debts
Accounts receivable written off as uncollectable.
Line 5-03, Barber and Beauty Expense
The cost of barber and beauty services provided by non-facility personnel.
Line 5-04, Contributions
Amounts donated to charitable or other organizations.
Line 5-05, Depreciation Over Straight Line
Depreciation charged above straight line. Amounts posted to this line should result from reclassifications (Column 2) from Line 3-02. Column 1 should equal zero.
Line 5-06, Income Taxes -- State and Federal
Taxes on net income levied or expected to be levied by the Federal or State government.
Line 5-07, Insurance -- Officers
Cost of unallowable life insurance on officers and key employees of the facility per Section 3-3.T.
Line 5-08, Non-Working Officer's Salaries
Salaries and other compensation paid to non-working officers.
Line 5-09 and 5-10, Nurse Aide Testing and Training
Costs incurred in having nurse aides tested or trained in order to meet OBRA 1987 provisions. This includes both the Medicaid and non-Medicaid portion of the expenses. Example -- A nursing facility incurs $1,000 in allowable expenses for nurse aide training. A bill is submitted to the Division of Medical Services for direct reimbursement. Based on the facility's percentage of Medicaid utilization, the facility was eligible for 80% reimbursement. A payment was made to the facility in the amount of $800 ($1,000 x 80%) for the Medicaid portion of the nurse aide training expense. The $1,000 should be included in non-allowable costs and the $800 reimbursement should be included on Form 5, Line 13. The same principles apply to Nurse Aide Testing Costs and reimbursements from the contracted testing company.
Line 5-11, Other Non-Allowable Costs
Other costs that are considered non-allowable in accordance with other provisions of the State Plan (products sold to residents, etc.).
Line 5-12, Penalties & Sanctions
Includes by way of illustration, penalties and sanctions assessed by the Division of Medical Services, the Internal Revenue Service, the State Tax Commission, or financial institutions (i.e., insufficient funds charges).
Line 5-13, Television & Cable (Resident Rooms)
Cost of television sets used in the residents' rooms or for providing cable TV to the residents' rooms.
Line 5-14, Vending Machines
Cost of items sold to employees, residents and the general public including candy bars and soft drinks.
Line 5-15, Goodwill
Amortization of Goodwill costs. These costs are not to be included on the Form 7 depreciation schedule.
Line 5-16, Total Non-Allowable Costs
Line 5-16 is the sum of Line 5-01 through Line 5-15.
Line 6, Total Costs
Line 6, is the total of 1-39, 2-60, 3-11, 4, and 5-16. Column 1 must agree with the total expenses in the adjusted trial balance.
Line 7, Total Resident Days
Enter the number of total resident days from Form 3, Line 4.1, Column A.
Line 8, Direct Care Costs
Enter in Column A, the cost from Line 1-37, Column 6. Column B (Direct Care cost per day) is calculated by dividing Line 8, Column A by Line 7.
Line 9, Indirect, Administrative and Operating Costs
Enter in Column A, the cost from Line 2-60, Column 6. Column B (Indirect, Administrative and Operating cost per day) is calculated by dividing Line 9, Column A by Line 7.
Line 10, Property Costs
Enter in Column A, the cost from Line 3-11, Column 6. Column B (Property cost per day) is calculated by dividing Line 10, Column A by Line 7.
Line 11, Quality Assurance Fee
Enter in Column A, the cost from Line 4, Column 6. Column B (Quality Assurance Fee cost per day) is calculated by dividing Line 11, Column A by Line 7.
Line 12, Total Costs
Line 12, Column A is the total of Lines 8, 9, 10 and 11, Column A. This total should agree with Line 6, Column 6. Total Per Diem Cost is calculated by dividing Line 12, Column A by Line 7.
Depreciation expense will be reported on Form 7, Pages 1, 2, and 3 by asset category/description. Pages 1 and 2 are to be used to report separately the depreciation expense incurred for facility owned assets (Page 1) and the depreciation expense incurred for related party owned assets (Page 2). All assets must be reported on these two pages. Page 3 is to be completed by adding Page 1 and Page 2 together. A copy of the facility's depreciation schedule must be attached to the cost report and should identify and reconcile with amounts posted to Form 7, Page 1 by asset category. A separate depreciation schedule for the related party assets reported on Page 2 must also be attached and should identify and reconcile with amounts posted to Form 7, Page 2 by asset category. The depreciation schedule(s) must be completed using the straight-line method and will reflect the same period as the cost report and will include the asset description, acquisition date, historical cost, salvage value if used, depreciable base, useful life, cost report period, depreciation expense claimed, and accumulated depreciation to date. Straight-line depreciation is the only method allowable for cost reporting purposes.
Assets purchased (not leased) from related parties will be included on Page 1 but are subject to related party cost limits identified in Section 3-1.F.2. These assets should be included in Column 1 of Page 1, but adjusted to the related party allowable amounts per Column 4 adjustments.
For Nursing Facilities which are combined with/attached to other operations (hospitals, RCF's, etc.), assets used only by these other operations should not be included on Form 7, Columns 1 through 5. Common used assets should be included on Form 7, Columns 1 through 5, but only for the amounts allocated to the Nursing Facility. Copies of workpapers/schedules used to make these allocations must be attached to Form 7 and the depreciation schedules. These workpapers/schedules will identify the common assets used, allocated amounts, descriptions and allocation methods used.
All vehicles and generators approved by the Office of Long Term Care under Act 1602 of 2001 must be listed separately on their designated Form 7 line. Vehicle depreciation is subject to the limits identified in Section 3-2 K.2.
Enter the actual cost of the assets. The facility owned asset amounts reported on Form 7, Page 1 must agree with the facility's adjusted trial balance recorded asset amounts.
The total accumulated depreciation calculated using the straight-line method will be reported in this column.
The depreciation expense using the straight-line method will be reported in this column. The total of this column on Form 7, Page 1 plus any amount reclassified to Form 6, Line 5-05 (Depreciation over straight-line), Column 2 will agree with the total depreciation posted to the adjusted trial balance per Form 6, Line 2-58, Column 1, Line 3-02, Column 1 and Line 3-03, Column 1.
Use this column to record adjustments for unallowable vehicles, allocated unallowable vehicles per usage, mobile homes, RV's, etc. Use this column also to record adjustments to depreciation expense for gains or losses from the sale/disposal of assets. The total of the adjustments in this column will agree with adjustments reported on Form 6, Lines 2-58, 3-02, and 3-03 Column 5. A schedule must be attached that details the adjustment amounts.
Identify those costs that contain expenditures for services or supplies furnished to the facility by related organizations per Section 3-1.F.2. Indicate the form number and line number to designate the location of the expense. Provide the name of the related organization, the amount of current year transactions, the cost to the related organization, and the amount of the transactions in excess of cost. The amount of transactions in excess of cost must be transferred to the appropriate line on Form 6 as an adjustment in Column 3. For example, if a facility purchased services or supplies from a related organization for $500 and the cost of those services or supplies to the related organization was $300, the excess over cost, or $200, must be transferred to the appropriate line on Form 6 as a Column 3 adjustment to offset the expense.
Adjustments to expenses will be made to the appropriate line on Form 6, Column 3 for all related party expense adjustments. For related party lease agreements, unallowable lease costs should be removed in total on Lines 3-09 and 3-10, and the actual cost of amortization, depreciation, interest, property insurance and property taxes should be posted to Lines 3-01, 3-02, 3-03, 3-04, 3-05, 3-06 and 3-08, Column 3 respectively. See also instructions for reporting related party depreciation and related party interest per Form 7 and Form 10.
Interest income from related organizations will be transferred to Form 5, Line 10, Column 2. Form 6 interest expense can not be reduced to below zero.
List any leases pertaining to buildings, furniture, and equipment. Identify the lessor, the leased item, the terms of the lease including the amount of the monthly payment, a description of the purchase option, if any, and the amount of rent applicable to the current reporting period.
1. All interest bearing debt must be reported on Form 10, Pages 1 and 2. These two forms are to be used to report separately the interest expense incurred by the facility on Page 1 and allowable interest expense incurred by a related party on Page 2. Each note should be listed under the columns for Notes 1-11 with the total listed in Column 12. If the facility had more than eleven notes payable during the reporting period, please attach an additional Form 10. Form 10, Page 3 is to be completed by adding the Total columns from Form 10, Pages 1 and 2, Lines 2, 3, 4, 5, 6, 10, 11, 12 and 13.
Balance at the beginning of the cost reporting period. The Page 1 total of the Beginning Balance line must agree with the payable amounts reported in Column 1 of Form 11.
Balance at the end of the reporting period. The Page 1 total of the Ending Balance line must agree with the payable amounts reported in Column 2 of Form 11.
The current portion of interest bearing debt. The portion due within one year should be reported in this column for all interest bearing debt. The Page 1 total of this line must agree with the amount on Form 11, Line 23, Column 2.
The non-current portion of long-term notes payable should be reported in this column. The Page 1 total must agree with Form 11, Line 33.
Describe the asset financed or purpose of the loan. For example, mortgage of building, purchase of equipment, working capital, vehicle, software, etc.
Report the allowable interest expense for Fair Market Rental payment for the cost reporting period.
Report the allowable interest expense for generator for the cost reporting period.
Report the allowable working capital interest expense for the cost reporting period. Also report the allowable interest expense on other items such as vehicles and software.
a) Form 10, Page 1, Column 12, Line 10 will agree with Form 6, Line 3-04, Column 1. Form 10, Page 1, Column 12, Line 11 will agree with Form 6, Line 3-05, Column 1. Form 10, Page 1, Column 12, Line 12 will agree with Form 6, Line 2-59, Column 1. Form 10, Page 1, Column 12, Line 13 will agree with Form 6, Line 5-11, Column 1 (unallowable interest only).
The balance sheet as of the beginning of the reporting period is reported in Column 1 and the balance sheet as of the end of the reporting period is reported in Column 2. Note: Column 1 of this report must equal Column 2 of the previous cost report.
Cash on Hand & in Banks includes all funds actually on hand or in bank accounts subject to immediate withdrawal.
Accounts Receivable represent monies due the facility for services rendered to residents as of the balance sheet date. The dollar amount recorded on the schedule represents gross accounts receivable.
Allowance for Uncollectable Accounts includes the estimated loss for accounts receivable that will not be collected.
Notes Receivable includes the current portion of notes other than those due from officers, owners, or related organizations.
Due from Officers, Owners or Related Organizations represent amounts owed the facility by officers, owners or related parties as of the balance sheet date.
Other Receivables include all current receivables which are not appropriately included on another line such as amounts due from a previous owner.
Inter-Company Receivables represent amounts owed the facility by a home office or other nursing home facility in a multi-facility operation.
Inventory includes those goods awaiting sale or use, and excludes those long-term assets subject to depreciation. Inventories are normally conservatively valued at the lower of “cost or market”. List the method of inventory valuation in the space provided. Examples of inventory items include dietary supplies, housekeeping supplies and linens.
Prepaid Expenses represent the portion of the expenditures which will be carried forward into the next accounting period. Examples of prepaid expenses include membership dues, insurance premiums, rent, service contracts, etc.
Investments are normally permanent or long-term securities with value, but which are normally not available for immediate withdrawal. Investments include stock and bonds, certificates of deposit, etc.
Other Current Assets include all current assets which are not appropriately included on any other line of the balance sheet.
Property, Plant and Equipment must agree with the total of all assets recorded on Form 7, Page 1, Column 1.
Less Accumulated Depreciation represents a reduction of the property, plant, and equipment reported on Line 13. The amount entered in the beginning column reports accumulated depreciation at the beginning of the reporting period, and therefore, does not include the depreciation expense for this period.
Notes Receivable -- Noncurrent includes the non-current portion of notes other than those due from officers, owners, and related organizations.
Due from Officers, Owners or Related Organizations under Other Assets includes the non-current portion of amounts owed from officers, owners, or related organizations.
Deposits include amounts used to secure accounts with utility companies, for workers compensation insurance or with lessors, for example. A schedule must be attached that details the amount on this line.
Other Noncurrent Assets represent those non-current assets which are not appropriately reported on any other line (ex. organization costs).
Total Other Assets is the sum of amounts recorded on Lines 16 through 19.
Total Assets represents the sum of amounts recorded on Lines 12, 15, and 20 of the balance sheet.
Accounts Payable represent liabilities of daily transactions normally kept on open account for goods and services purchased. Exclude accounts payable owed to related parties.
Notes Payable and Current Portion of Long-Term Debt includes obligations that are scheduled to mature within one year after the balance sheet date and the current portion of long-term debt.
Accrued Salaries represent the salaries and wages earned by employees but not paid during the accounting period. To be recognized as an allowable expense, salaries accrued at the end of the accounting year must be paid within ninety days of the year end.
Accrued Payroll Taxes include undeposited federal and state income and FICA taxes withheld. It also includes union dues and insurance withheld and the employers' liability for FICA and unemployment taxes.
Accrued Income Taxes include any liability the facility has for federal and state income taxes.
Inter-company Payables represent amounts owed by the facility to a home office or other nursing home facility in a multi-facility operation.
Other Current Liabilities represent any current obligations not included elsewhere on Form 11, Lines 22-27. A schedule must be included with the cost report.
Total Current Liabilities represents the sum of amounts reported on Lines 22 through 28 of this form.
Mortgage Payable represents the mortgage obligation that is scheduled to mature after one year from the balance sheet date.
Notes Payable -- Long-Term include obligations that are scheduled to mature after one year from the balance sheet date.
Notes Payable to Officers, Owners or Related Organizations represent liabilities to officers, owners or related organizations.
Total Long-Term Liabilities represents the sum of Lines 30 through 32.
Total Liabilities is the sum of current liabilities (Line 29) and long-term liabilities (Line 33).
Capital has sections, which apply to proprietorships, partnerships, governmental facilities, and corporations. Only the applicable lines should be completed.
Net Income (Loss) for Period is obtained from Form 5, Line 22.
Contributions to capital must be listed together with the date the contribution was made.
Dividends include those dividends declared during the cost reporting period.
Owners' or Partners' Withdrawal must be listed on the lines provided together with the date the withdrawal was made. A schedule must be attached if necessary.
A separate Form 13 must be completed for each owner, partner or stockholder listed on Form 14. Additional copies of Form 13 should be made as needed. Compensation other than salary should be specified under other compensation. Examples of such compensation are given on Form 13. Each completed Form 13 must be signed by the owner, partner or stockholder.
The Section I “Compensation Paid by Facility” will identify net allowable compensation claimed after adjustments per Column 6 of the applicable Form 6 reported line number.
The Section I “Compensation Paid by Related Management Company/Home Office” will identify net allowable compensation claimed for this facility after adjustments and included on Form 6, Line 2-50, Column 6. This is the allocated/applicable owner's, partner's or stockholder's allowable compensation amount included from Form 15, Line 2-01, Column 6 plus any direct Form 15, Line 2-01, Column 3 compensation.
The Section VII “Analysis of Compensation Paid to Relatives of Owner/Partner/Stockholder” will identify the Form 6 line number in which the compensation is claimed and the total compensation paid to each relative per line number. For relatives of related management company/home office owners, partners or stockholders, the total compensation paid by the related management company/home office to each relative will be identified here per Line 2-50.
Each provider is required to complete the applicable section of this form. All owners, partners, major stockholders, and officers will be identified on this Form.
The “Direct Compensation from Facility” column will identify direct total compensation amounts paid by the facility. This column will include each owner's, partner's, major stockholder's and officer's total compensation amount as posted from the trial balance to Form 6, Column 1 (do not include Form 6, Line 2-50 amounts for related management company/home office). The “Form 15 Compensation Amount” column will identify the total compensation amount paid to each related management company/home office owner, partner, major stockholder and officer as posted to Form 15, Column 1.
Each provider that reports expense on Form 6, Line 2-50 as a result of home office costs or management fees paid to a related management company must complete Form 15. The form is to be used to report the allocation of indirectly related expenses as well as directly related expenses from the home office or related management company.
This section must include the total revenue of the home office or related management company. Facilities should complete only Columns 1 and 2 in Section 1.
Line 2-01 through 2-30 will be used to report the expenses for the described accounts. All expense accounts that are not listed in Section 2 must be reported on Line 2-28, Other, and a detailed schedule must be attached to the cost report.
This column must agree with the general ledger of the home office or the management company.
This column is for adjustments for expenses not related to resident care or to offset revenues against expenses. This column will also be used to make necessary adjustments for excess compensation to Line 2-01 as described in Section 3-2.E.
Expenses that are directly related to the management of the facility for which the cost report is being filed must be reported in Column 3.
Expenses, which are directly related to the management of all other facilities, must be reported in Column 4.
Column 1, less Column 2, less Column 3, less Column 4 will be reported in Column 5. These are the expenses to be allocated to all facilities managed by the home office or the management company.
The total of expenses directly related to this facility from Line 2-31, Column 3 are reported here.
The total amount of this facility's allocated portion of the indirectly related expenses from Line 2-31, Column 6 are reported here.
Nonallowable expenses that are included in Section 2 will be listed by the following categories: Bad Debts, Contributions, Income Tax, Vehicles, and Other. Other nonallowable expenses must be listed on a schedule attached to the cost report.
Form 16 must be completed for each facility.
This column must equal the amount on Form 6, Column 1 for the line recorded in column 1.
This column is used to record the actual hours paid during the report period for each staff classification.
Credits
Amended Aug. 14, 2022.
So in original.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 016.06.8-4-3A, AR ADC 016.06.8-4-3A
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