Page 2951

rendered to the general public. (Eff. 2/1/2010, Register 193; am 10/1/2017, Register 223; am 11/10/2018, Register 228; am 7/1/2019, Register 231; am 1/1/2024, Register 248) Statutory Authority: Authority: AS 47.05.010 AS 47.07.070 7 AAC 150.170. Allowable reasonable operating costs. (a) Allowable costs for prospective per-day and percentage of charges rates are the costs from the appropriate base year’s Medicare cost report, in accordance with Medicare requirements and regulations, as audited or adjusted in accordance with this section. The department will consider only costs that are consistent with efficient, cost-effective management and operations. Only operating costs that are directly related to the delivery of health care services to Medicaid patients will be allowed for the purpose of rate setting. (b) Operating costs are the costs of providing health care services to Medicaid patients that are necessary and reasonable and that are not excluded by this section. The following costs are excluded or otherwise limited as set out in this subsection:

(1) advertising cost: the cost of advertising, which includes marketing, is allowable only to the extent that the advertising is directly related to the care of patients at the facility; the reasonable cost of only the following types of advertising and marketing is allowable:

(A) announcing the opening of or change of name of a facility;

(B) recruiting for personnel;

(C) advertising for the procurement or sale of items;

(D) obtaining bids for construction or renovation;

(E) advertising for a bond issue;

(F) informational listing of the provider in a telephone directory;

(G) listing a facility’s hours of operation;

(H) advertising specifically required as part of a facility’s accreditation process;

(2) nursing cost: the cost of nursing staff in a long-term care facility is allowable as a routine cost only; the cost of nursing personnel is not an allowable ancillary cost even if the