Determining Cost Clause Samples
The "Determining Cost" clause establishes the method by which costs are calculated and verified under an agreement. Typically, it outlines the types of expenses that are considered allowable, the documentation required to substantiate those costs, and the process for resolving any disputes over cost calculations. This clause ensures transparency and consistency in financial dealings between parties, helping to prevent misunderstandings or disputes regarding payment obligations.
Determining Cost. The MCO determines the cost of room and board in the facility in which the member resides, using procedures approved by the Department.
Determining Cost. The MCO determines the cost of room and board in the facility in which the member resides. The MCO shall use one method for all its members. It shall select one of the three following methods:
a. Actual Cost Methodology This method requires calculation of actual room and board costs for each community residential facility with which the MCO contracts. Facility- specific costs are split between care and supervision on the one hand and room and board on the other. Total costs attributable to room and board are divided by the number of residents licensed or certified for the living arrangement to get a room and board rate.
i. Costs attributable to Room and Board:
a) Rent, mortgage payments, title insurance, mortgage insurance
b) Property and casualty insurance
c) Building and grounds maintenance costs
d) Residents’ food
e) Household supplies and equipment necessary for the room and board of the individual
f) Furnishings used by the individual (does not include office furnishings)
g) Utilities
h) Resident’s telephone, cable television
i) Property taxes
j) Specific individual special dietary needs
ii. Costs attributable to Care and Supervision. The following are allowable elements in residential provider rates for which FFP can be claimed:
a) Staff Costs: • Salaries. In certain circumstances, a staff person’s wages and benefits may need to be apportioned between room and board costs and care and supervision. • FICA • Staff health insurance • Worker’s compensation • Unemployment compensation • Staff travel • Staff liability insurance • Staff development and education
b) Resident travel (includes depreciation on vehicle)
c) Administrative overhead-contractor’s costs to do business, including: • Office supplies and furnishings • Percentage of administrative staff salaries • Office telephone • Recruitment • Audit fees • Operating fees/permits/licenses • Percentage of office space costs • Data processing fees • Legal fees • Agency liability insurance An MCO that uses this method is responsible for assuring that each residential care provider with which it contracts uses this method for identifying the portion of the facility rate attributable to room and board, for maintaining documentation or auditing providers to verify the accuracy of these calculations and for updating this information annually.
b. SSI-E Methodology SSI-E Payment Standard - SSI-E or the SSI Exceptional Expense Supplement represents the highest combined federal and state SSI payment amount in Wis...