Sec. 446.6. Definitions and sources of statistics for Medicaid cost allocation

	Statistic	Definition or Method of Computation	Source
(a) OTHER OPERATING EXPENSES
(1)	Assigned Time— Nursing Education	Number of hours worked by enrolled nursing students (RN or LPN) by assigned program service area.	Education curriculum and work records
(2)	Assigned Time— Post Grad. Med. Ed. (Approved Program)	Number of hours worked on premises by interns and residents in the approved postgraduate medical education programs by assigned cost center. Outside time is excluded.	Education curriculum and work records
(3)	Assigned Time— Post Grad. Med Ed. (Non-Approved Prog.)	Number of hours worked on premises by interns and residents in the non-approved postgraduate medical education programs by assigned cost center. Outside time is excluded.	Education curriculum and work records
(4)	Time spent— Social Work Services	Number of hours utilized by social workers handling specific patient's needs, by program service area to which the patients are assigned. Time spent not related to a specific patient is not to be counted.	Departmental records or Time Study
(5)	Number of rooms Occupied by Dept. Assigned— Housing	The average number of rooms rented to hospital employees, non-paid workers and students participating in education programs carried on by the hospital by department to which the personnel are assigned. Exclude common areas (i.e., recreation room) in the room count. A monthly census as of the last day of every month must be taken and averaged for the year.	Personnel and General Accounting records
(6)	Net Square Feet Maintained— Plant Maintenance	For each cost center for which maintenance is provided, allocate based upon the total net square feet of the cost center maintained. Net square feet is defined as: The interior square feet in each functional cost center of the hospital determined by either a physical measurement of the hospital or a measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators, and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc., serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 600 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.	Blueprints of the Hospital plant or actual measurement if blueprints are not available
(7)	Net Square Feet—Plant Operation, Energy, Security, and Parking, Plant Operation & Maintenance	Net square feet by department is defined as follows: The interior square feet in each functional cost center of the hospital determined by either a physical measurement of the hospital or a measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc.. serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 600 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.	Blueprints of the Hospital plant or actual measurement if blueprints are not available
(8)	Assigned Time— Housekeeping	Scheduled housekeeping hours of service to be spent in maintaining cleanliness and sanitation of each functional cost center. Hours to be spent cleaning general and unused areas must be excluded.	Housekeeping Cost Center records
(9)	Assigned Time— Other Health Professional Ed.	Number of hours worked on premises by health profession student, excluding RN, LV(P)N, intern and resident students, by assigned cost centers.	Education curriculum and work records
(10)	Patient Meals Served— Dietary Services	Number of patient meals served shall include only regular scheduled meals and exclude snacks and fruit juices served between regular scheduled meals.	Actual count maintained by Dietary Services cost center
(11)	Adjusted F.T.E. Employees— Non-Patient Food Service	Divide the total annual paid hours (including vacation, sick leave and overtime) for all those employees for whom the cafeteria is available for use by cost center by 40 hours; divide the result by 52. If employees are paid for unused sick leave, exclude the hours so paid from the calculation. Please round to nearest tenth of an F.T.E. only.	Payroll or Personnel Records
(12)	Dry and Clean Pounds Distributed— Laundry and Linen	The weight of linen processed plus the equivalent weight of disposable linen substitutes used. Include uniforms and linen from Personnel quarters and employee housing. If linen is not weighed, a conversion from pieces to pounds is allowed. If soiled linen is weighed, divide by 1.1.	Actual count maintained by the Laundry and Linen Dept.
(13)	Costed requisitions and Cost of Sales— Central Services and Supply	Central Services Costed requisitions means: Total dollar amount (based on invoice cost) of nonchargeable supplies transferred from the central services and supplies cost center to each using cost center. Central Services Cost of Sales means: The invoice cost of all supplies sold to patients and others regardless of the issuing cost center.	Copies of cost center requisitions or other documentation
(14)	Costed Requisitions ad Cost of Sales— Pharmacy	Pharmacy costed requisitions means: Total dollar amount (based on invoice cost) of nonchargeable pharmaceutical items transferred from the Pharmacy Cost Center to each using cost center Pharmacy Cost of Sales means: The invoice cost of all pharmaceutical items sold to patients and others regardless of issuing cost center.	Copies of cost center requisitions or other documentation
(15)	Accumulated Cost—General Accounting; Patient Accounting; Admitting and Registration; Hospital Administration; Insurance— Malpractice; Insurance— Other; Licenses and Taxes; Interest— Short-Term	To be generated through computer software. Nothing is to be reported.	Not Applicable
(16)	Direct Cost of Supplies Expensed— Purchasing and Stores	Total direct cost of medical and surgical supplies (natural classification.40) and nonmedical and nonsurgical supplies (natural classification.50) by cost center, as reclassified, excluding pharmacy (accounts 8470 and 7150), patient dietary service (account 8310), and non-patient food services (account 8320).	General Accounting records
(17)	Hours of Service— Medical Records	Accumulated hours of service to program service centers. If this is unavailable, a questionnaire time survey may be used.	Departmental records or Time Study
(18)	Percent of Effort— Medical Staff Administration	Percent of time spent by the Chief of Medical Staff in the ancillary or program service areas for which he has responsibility.	Time Study
(19)	Professional Component by Cost Center Assigned— Medical Staff Services	Using the calculations made to generate the reclassification necessary to create this cost center, distribute costs back to the appropriate ancillary or program service area from which the physician cost arose (i.e., Radiology, Laboratory, Emergency Room, etc.).	General Accounting records
(20)	Number of Discharges— Medical Care Review	The number of patients discharges from the Hospital accumulated by program service centers, excluding routine newborn.	Medical Records or statistical reports
(21)	Hours of Total Direct Nursing Service— Nursing Administration	Actual hours worked of nurses for which administration is provided by assigned area.	Personnel, Payroll or Departmental records
(22)	Dollars of Depreciation/ Amortization by Cost Center— Depreciation &Amortization (Fixed Assets). Refer to subdivision (c) of this section for an example.	The depreciation expense related to each building (or wing) distributed through square feet to departments in that building (or wing) (resulting statistic reported as a weighted statistic, dollars of depreciation). The square feet used to distribute the expense is Net Square Feet by building (or wing) defined as follows: The interior square feet in each functional cost center of the hospital determined by either a physical measurement of the hospital or a measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc. serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 600 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.	General Accounting records and blueprints of the Hospital plant or actual measurement of blueprints are not available
(23)	Dollars of Lease/Rent by Cost Center— Leases and Rentals (Fixed Assets). Refer to subdivision (c) of this section for an example.	The lease and rental expense related to each building (or wing) distributed through square feet to departments in that building (or wing) (resulting statistic reported is a weighted statistic, dollars of rentals and leases). The square feet used to allocate the expense is Net Square Feet by building (or wing) defined as follows: The interior square feet in each functional cost center of the hospital determined by either a physical measurement of the hospital or a measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc., serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 600 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.	General Accounting records and blueprints of the Hospital plant or actual measurement if blueprints are not available
(24)	Dollars of Depreciation by Cost Center— Depreciation & Amortization— Movable Equipment. Refer to subdivision (c) of this section for an example.	The cost of depreciation on movable equipment must be allocated to the functional cost center utilizing that equipment. Where the cost center of depreciation on movable equipment is utilized by two or more functional cost centers, the depreciation must be allocated between the cost centers based upon cost center usage.	Plant Ledger records
(25)	Dollars of Lease/Rent by Cost Center— Leases and Rentals— Movable Equipment. Refer to subdivision (c) of this section for an example.	The cost of leases/rentals on movable equipment must be allocated to the functional cost center utilizing the equipment. Where the cost of leases/rentals on movable equipment is utilized by two or more functional cost centers, the lease/rent must be allocated between the cost centers based upon cost center usage.	General Accounting records and Lease/ Rent Agreements
(26)	F.T.E. Employees— Employee Benefits— Non-Payroll-Related	Divide the total annual paid hours (including vacation, sick leave and overtime) for all employees by cost center by 40 hours; divide the result by 52. If employees are paid for unused sick leave, exclude the hours so paid from the calculation. Please round to nearest tenth of an F.T.E. only.	Payroll or Personnel records
(27)	Dollars of Interest by Cost Center— Interest— Long-term. Refer to subdivision (c) of this section for an example.	The interest expense related to capital debt will be allocated through square feet to departments in the building (or wing) for which the debt was incurred (weighted statistic, dollars of interest). The square feet used to allocate the expense is Net Square Feet by building (or wing) defined as follows: The interior square feet in each functional cost center of the hospital determined by either a physical measurement of the hospital or a measurement from blueprints. Floor area measurements must be taken from the center of interior walls to the center of adjoining corridors, if such corridors service more than one cost center. Exclude stairwells, elevators and other shafts. General and unused areas are also to be excluded. Hallways, waiting rooms, storage areas, etc. serving only one cost center must be included in that cost center. When changes in area have been made during the year as a result of new construction, cost center relocation, expansion or contraction, statistical data must be maintained to allow for the development of "weighted" areas for the fractional part of the year. For example, the addition or deletion of 1200 square feet for a six-month period would be an adjustment of 600 square feet; where the same area serves more than one functional cost center, this area must be apportioned between or among the appropriate functions.	General Accounting records and blueprints of the Hospital plant or actual measurement if blueprints are not available
(28)	Time Spent— Medical Photography and Illustration	The number of hours utilized by another functional cost center of personnel in the Medical Photography and Illustration cost center.	Departmental records or Time Study
(b) ANCILLARY SERVICES
(1)	Number of Procedures— Labor and Delivery Services	Refer to the definition of the Standard Unit of Measure in section 444.20(a) of this Article. Report this statistic by the required program service areas.	Departmental records or Statistical reports
(2)	Surgery Minutes— Surgery Services	Refer to the definition of the Standard Unit of Measure in section 444.20(b)(1) of this Article. Report this statistic by the required program service areas.	Departmental records or Statistical reports
(3)	Recovery Minutes— Recovery Services	Refer to the definition of the Standard Unit of Measure in section 444.20(b)(2) of this Article. Report this statistic by the required program service areas.	Departmental records or Statistical reports
(4)	Anesthesia Minutes— Anesthesiology	Refer to the definition of the Standard Unit of Measure in section 444.20(b)(3) of this Article. Report this statistic by the required program service areas.	Departmental records or Statistical reports
(5)	Departmental Gross Charges— Medical Supplies Sold; Durable Medical Equipment—Sold; Durable Medical Equipment— Leased/Rented; Drugs Sold; Cardiac Catheterization Laboratory; Respiratory Therapy; Speech/Language Pathology Audiology; Psychiatric/Psychological Services	Report gross charges for the specific department by the required program service areas. All-inclusive rate hospitals have the option of using the Standard Units of measure for the applicable functional cost center reported by the required program service areas in lieu of Departmental Gross Charges, if charges are not available.	General accounting records
(6)	C.A.P. Workload—Laboratory Services— Clinical; Laboratory Services— Pathological; Whole Blood and Packed Red Cells; Electrocardiology; Pulmonary Function Testing	Most recent College of American Pathologists Workload Measurement Unit Manual. Refer to subdivisions (e), (f) and (j) of section 444.20 of this Article for a further definition of the Standard Unit of Measure. Report this statistic by the required program service areas.	Departmental records or Statistical reports
(7)	California R.V.U.—Radiology —Diagnostic; Radiology— Therapeutic; Nuclear Medicine; Neurology—Diagnostic	California Medical Association, 1974 California Relative Value Studies. Refer to the definitions of the Standard Units of Measure in section 444.20(h)(1), (h)(3), (h)(4) and (k) of this Article. Report this statistic by the required program service areas.	Department records or Statistical reports
(8)	Number of Procedures —C.T. Scanner	Refer to the definition of the Standard Unit of Measure in section 444.20(h)(2) of this Article. Report this statistic by the required program service areas.	Departmental records or Statistical reports
(9)	American Physical Therapy Association R.V.U. —Physical Therapy	Refer to the definition of the Standard Unit of Measure in section 444.20(l)(1) of this Article for Physical Therapy (account 7530). Report this Statistic by the required program service areas.	Departmental records or Statistical reports
(10)	American Occupational Therapy Association R.V.U.—Occupational Therapy	Refer to the definition of the Standard Unit of Measure in section 444.20(l)(2) of this Article for Occupational Therapy (account 7530). Report this statistc by the required program service areas.	Departmental records or Statistical reports
(11)	Assigned Time —Recreational Therapy	Number of hours worked by Recreational Therapists with patients, by program service to which patients are assigned.	Departmental records
(12)	Number of Treatments— Other Physical Medicine	Refer to the definition of the Standard Unit of Measure in section 444.20(l)(6) of this Article. Report this Statistic by the required program service area.	Departmental records or Statistical reports
(13)	Number of Treatments— Renal Dialysis	Refer to the definition of the Standard Unit of Measure in section 444.20(m) of this Article. Report this statistic by the required program service area.	Departmental records or Statistical reports
(14)	Provider Specify—Other Ancillary Services	If a provider has a specific ancillary service that they feel is not provided for above, a complete description of that service along with a proposed Cost Allocation Statistic should be submitted to OHSM for prior approval (prior means six months before a fiscal year ends).	Departmental records or Statistical reports

(c) EXAMPLE

(1) Wherever dollars are required as the Cost Allocation Base, the intent is to accomplish the allocation of the applicable mandatory zero-level account's cost through the direct expensing of that cost. For example, if the direct expense of Interest—Long-Term (account 8880) contains interest related to two long-term financing agreements, one related to the purchase of a C.T. Scanner and one related to a new addition, the method to be used in structuring the statistics—Dollars of Interest—is illustrated in the following paragraphs.

(2) Procedure outline.

(i) Allocate interest on the new addition on the basis of Net Square Feet, within the new addition.

(ii) Allocate interest on the C.T. Scanner directly to the C.T. Scanner cost center (account 7340).

(iii) Combine the results of the above producing the statistic Dollars of Interest, as illustrated below.

(3) Calculations.

(i)	Cost Center	(1) Interest on addition	(2) Interest on C.T. Scanner	(1 + 2) Statistic Reported
	Laboratory—
	Clinical	15,000	—	15,000
	Pathological	20,000	—	20,000
	Dietary	10,000	—	10,000
	Nuclear Medicine	50,000	—	50,000
	C.T. Scanner	5,000	20,000	25,000
	TOTAL	100,000	20,000	120,000

(ii) The interest on the addition is distributed on Net Square Feet in the addition, as follows:

Cost Center	Square Feet	Percent	Expense Distribution
Laboratory—
Clinical	1,500	15	15,000
Pathological	2,000	20	20,000
Dietary	1,000	10	10,000
Nuclear Medicine	5,000	50	50,000
C.T. Scanner	500	5	5,000
TOTAL	10,000	100	100,000