N.Y. Comp. Codes R. & Regs. Tit. 10 § 86-4.23 - Depreciation
(a) Allowable
depreciation shall be limited to those assets which are used for purposes of
providing or supporting direct patient care. Reported depreciation based on
historical cost is recognized as a proper element of cost. Useful lives for
assets purchased after 1991 shall be the higher of the reported useful life or
those useful lives from the Estimated Useful Lives of Depreciable Hospital
Assets, 1988 edition, American Hospital Association, consistent with title
XVIII provisions. Useful lives for assets purchased prior to 1991 shall be
determined by use of the 1983 edition. Copies of these publications are
available from the American Hospital Association, 840 North Lake Shore Drive,
Chicago, IL 60611, and copies are available for inspection and copying at the
offices of the Records Access Officer of the Department of Health, Corning
Tower Building, Empire State Plaza, Albany, NY 12237.
(b) In the computation of rates for voluntary
facilities, depreciation shall be included on a straight-line method on plant
and nonmovable equipment. Depreciation on movable equipment may be computed on
a straight-line method on accelerated under a double declining balance or
sum-of-the-years' digits method.
(1)
Voluntary facilities shall fund depreciation unless the commissioner
determines, upon application by the facility and after inviting written
comments from interested parties, that a waiver of the requirement for funding
is necessary and in the public interest. Funding shall mean the transfer of
monies to the funded accounts. Board-designated funds and the accrual of
liabilities to the funded depreciation accounts shall not be recognized as
funding of depreciation. Deposits to the funded depreciation accounts must
remain in such accounts for six months or more to be considered as valid
funding transactions unless expended for the purposes for which the account was
funded.
(2) Funding for plant and
fixed equipment shall mean that the transfer of monies to the funded accounts
shall occur by the end of the fiscal period in which the depreciation is
recorded.
(3) Depreciation on major
movable equipment shall be funded in the year revenue is received from the
reimbursement of each expense and in the amount included in reimbursement for
that year.
(4) Such funds may be
used only for capital expenditures with approval as required for the
amortization of capital indebtedness.
(c) In the computation of rates for public
facilities, depreciation shall be included on a straight-line method on plant
and nonmovable equipment. Depreciation on movable equipment may be computed on
a straight-line method or accelerated under a double declining balance or
sum-of-the-years' digits method.
(d) In the computation of reimbursement rates
for proprietary facilities, depreciation shall be computed on a straight-line
basis on plant and nonmovable equipment. Depreciation on movable equipment may
be computed on a straight-line method or accelerated under a double declining
balance or sum-of-the-years' digits method.
(e) Facilities financed by mortgage loans
pursuant to the Hospital Mortgage Loan Construction Law shall conform to the
requirements of this Subpart. In lieu of depreciation and interest, on the
loan-financed portion of the facilities, the commissioner shall allow level
debt service on the mortgage loan, together with such required fixed charges,
sinking funds and reserves as may be determined by the commissioner as
necessary to assure repayment of the mortgage indebtedness.
(f) Article 43 corporations may elect to
include in their reimbursement rates depreciation computed by a method other
than that used in subdivisions (b), (c) and (d) of this section, subject to
approval of the commissioner.
(g)
An amount for rent will be reimbursed as capital cost in lieu of depreciation,
provided the following conditions are met:
(1)
if required, the lease is reviewed and approved by the department;
(2) the applicant has no interest, direct or
indirect, beneficial or of record, in the ownership of the building or any
overlease;
(3) the rental per
square foot, in the judgment of the department, is the same as or is comparable
to other rentals in the building in which the facility is to be located, and
the rental per square foot is comparable to the rental of similar space in
other comparable buildings in the area when such comparisons can be made;
and
(4) the rent, if the lease is a
sublease, is the same as or less than rent in comparable leases in the
geographic area.
Notes
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No prior version found.