Section 34. Purchases of nursing facilities (NF)

A. In the event of a sale of a NF, the purchaser must have a current license and certification to receive DMAS reimbursement as a provider and must notify DMAS of the sale within 30 days of the date legal title passes to the purchaser. The notification shall include:

1. That a sale or transfer is about to be made or has already occurred;

2. The location and general description of the property; and

3. The names and addresses of the transferee and transferor and all such business names and addresses of the transferor for the last three years.

B. The following reimbursement principles shall apply to the purchase of a NF:

1. The allowable cost of a bona fide purchase of an existing nursing facility (whether or not the parties to the sale are, were, or will be providers of Medicaid services shall be the seller's allowable depreciated historical cost (net book value) as determined for Medicaid reimbursement. The amount of allowable debt or borrowing to finance such a purchase shall be limited to the greater of the amount of the seller's net book value of the assets purchased, or the seller's related allowable debt, both as determined for Medicaid reimbursement plus required financing costs limited in accordance with the provisions of 12VAC30-90-33 B 6 and B 7.

2. For purposes of Medicaid reimbursement, a "bona fide" purchase shall mean a transfer of title and possession for consideration between parties that are not related. Parties shall be deemed to be "related" if they are related by reasons of common ownership or control. If the parties are members of an immediate family, the sale shall be presumed to be between related parties if the ownership or control by immediate family members, when aggregated together, meets the definitions of "common ownership" or "control." See 12VAC30-90-51 C for definitions of "common ownership," "control," "immediate family," and "significant ownership or control."

3. The useful life of the fixed assets of the facility shall be the seller's remaining depreciable lives as determined for Medicaid reimbursement.

4. The seller must file a final cost report within 150 days of the date of sale.

Historical Notes

Derived from Volume 12, Issue 16, eff. July 1, 1996; amended, Virginia Register Volume 17, Issue 18, eff. July 1, 2001.

Statutory Authority

§ 32.1-325 of the Code of Virginia and Item 319 (II) of Chapter 1073 of the 2000 Acts of Assembly.