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Virginia Administrative Code
Title 12. Health
Agency 30. Department of Medical Assistance Services
Chapter 90. Methods and Standards for Establishing Payment Rates for Long-Term Care
11/21/2024

12VAC30-90-220. Start-up costs.

Subpart XII
Start-Up Costs and Organizational Costs

A. In the period of developing a provider's ability to furnish patient care services, certain costs are incurred. The costs incurred during this time of preparation are referred to as start-up costs. Since these costs are related to patient care services rendered after the time of preparation, they shall be capitalized as deferred charges and amortized over a 60-month time frame.

B. Start-up costs may include, but are not limited to, administrative and nursing salaries; heat, gas, and electricity; taxes, insurance; employee training costs; repairs and maintenance; housekeeping; and any other allowable costs incident to the start-up period. However, any costs that are properly identifiable as operating costs must be appropriately classified as such and excluded from start-up costs.

C. Start-up costs that are incurred immediately before a provider enters the Program and that are determined by the provider, subject to the DMAS approval, to be immaterial need not be capitalized but rather may be charged to operations in the first cost reporting period.

D. Where a provider incurs start-up costs while in the Program and these costs are determined by the provider, subject to the DMAS approval, to be immaterial, these costs shall not be capitalized but shall be charged to operations in the periods incurred.

Statutory Authority

§ 32.1-325 of the Code of Virginia.

Historical Notes

Derived from VR460-03-4.1940:1 Part XII, eff. July 1, 1993; amended, Virginia Register Volume 12, Issue 16, eff. July 1, 1996.

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