Section 405IAC1-14.6-13. Reporting of financing arrangements; working capital; interest; allocation of loans

   (a) All patient-related property financing arrangements shall be fully and completely disclosed on the forms prescribed by the office.

  (b) Interest costs on borrowed funds used to construct facilities or enlarge existing facilities that are incurred during the period of construction shall be capitalized as part of the cost of the facility or addition.

  (c) Interest on working capital loans shall only be recognized if the provider can demonstrate that such loans were reasonable and necessary in providing patient-related services. Working capital interest must be reduced by investment income from any related party. Working capital loans from a related party must be identified and reported separately on the annual financial report. Interest costs on related party working capital loans shall be allowable if they meet all other requirements, the interest does not exceed the rate available in the open market, and such loans are repaid at least annually for a minimum of thirty (30) days. Failure to document the existence of, or adhere to such repayment schedule, shall result in the related party working capital interest costs being disallowed.

  (d) Loans covering more than one (1) facility or asset shall apply to the several facilities or assets acquired in proportion to the cost that each item bears to the total cost. (Office of the Secretary of Family and Social Services; 405 IAC 1-14.6-13; filed Aug 12, 1998, 2:27 p.m.: 22 IR 77, eff Oct 1, 1998; readopted filed Jun 27, 2001, 9:40 a.m.: 24 IR 3822; readopted filed Sep 19, 2007, 12:16 p.m.: 20071010-IR-405070311RFA; readopted filed Oct 28, 2013, 3:18 p.m.: 20131127-IR-405130241RFA)