N.Y. Comp. Codes R. & Regs. Tit. 10 § 444.17 - Operating expenses-general

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(a) Expenses are expired costs, that is, costs that have been used up in carrying on some activity during the accounting period and from which no future measurable benefit will be obtained. Hospital expenses consist primarily of employee compensation, but substantial amounts of expense are in the form of supplies used, utilities, repairs, insurance, depreciation and other items. The objective of expense accounting is to accumulate, on the accrual basis, complete and meaningful records of expenses. Within each cost center, the expenses are classified, according to natural classification by the use of the fifth and sixth digits in the numerical coding system.

(b) Hospitals are required to use in the required reports all revenue and expense accounts which have capitalized titles and which have numerical codes with a fourth digit of zero (except where noted) when such a function as defined in this manual exists, even though the activity is not separately organized within the hospital. The only circumstances under which the hospital need not report an existing zero level account are when the patient service provided in a Daily Hospital Services cost center is not provided in a discrete unit.

(c) PATIENT SERVICE EXPENSE. This group of accounts (6000 - 7999) is used to report the direct expenses incurred in providing nursing and other professional services (daily hospital services, ambulatory services and ancillary services) rendered to patients. For each nursing and other professional service revenue center account a corresponding cost center account is provided. The second, third and fourth digits of the account numbers of the related revenue and expense cost centers are the same. Comparisons of the revenue and direct expense of each nursing and other professional service center are thereby facilitated.

(d) OTHER OPERATING EXPENSE. This group of accounts (8000 - 8999) is used to report the direct expenses incurred by the research, education, general, fiscal and administrative cost centers, and various unassigned cost centers. When cost finding procedures are performed, the expenses charged to these centers are allocated to the various patient service expense cost centers to determine the full cost of providing each revenue producing service.

(e) The following pages contain detailed descriptions of the functions or types of activities to be included in each cost center, the name and definition of the applicable standard unit of measure and the data source of the standard unit of measure.

(f) STANDARD UNITS OF MEASURE. The Standard Unit of Measure is required to provide a uniform statistic for measuring costs. The Standard Unit of Measure for revenue producing cost centers (Daily Hospital, Ambulatory, and Ancillary Services) attempts to measure the volume of services rendered to patients (productive output). For non-revenue producing cost centers, the Standard Unit of Measure attempts to measure the volume of support services rendered. The Standard Unit of Measure provides a method of determining unit cost and revenue to facilitate cost and revenue comparisons among peer group health facilities. Standard Units of Measure should not be confused with allocation statistics used to allocate cost of non-revenue producing cost centers to each other and to the revenue producing centers.

Notes

N.Y. Comp. Codes R. & Regs. Tit. 10 § 444.17