Section 10-16-403(1), C.R.S., provides that an HMO may acquire property which may reasonably be required for its administrative offices or for such other purposes as may be necessary to accomplish the business of the organization. The following rules apply in order to meet the requirements of § 10-16- 403(2), C.R.S., regarding the prior approval of property purchases. Any property acquired without filing a notification, other than as outlined herein, shall be nonadmitted for statutory accounting purposes.
A. For acquiring real property, e.g. hospitals, medical facilities, nursing care and intermediate care facilities, an HMO must file, at least 30 days prior to acquisition, notice of its intent to acquire property. The filing shall include a description of:1. The nature of the real property;2. The location of the real property;3. Method of acquisition (build new facility, remodel existing facility, etc.);4. How the property contributes to the accomplishment of the nature of the HMO's business; and5. An estimate of the amount to be expended and source of funding (i.e. loans, operating funds, etc.).B. Electronic data processing equipment and software shall be admitted and valued in accordance with the statements of statutory accounting principles contained in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual.C. The HMO may acquire property which is other than real property and which is used in the direct delivery of health care services, such as pharmaceuticals and surgical supplies, durable medical equipment, furniture, medical equipment and fixtures, and leasehold improvements in health care facilities.1. Furniture, medical equipment and fixtures and leasehold improvements in health care facilities must meet the following conditions in order to qualify as an admitted asseta. useful life of at least two (2) years; andb. cost of more than $500.00.2. The aggregate admitted value of all property other than real property is limited to the lesser of 5% of assets or 25% of surplus.3. The Commissioner may waive the aggregate limitations of subsection 2 above. A request for waiver must include: a. A detailed list and cost of each item;b. An explanation of why the property is necessary for the conduct of the business of the HMO;c. A statement as to why the request would not result in a deterioration of the liquidity or solvency of the HMO; and4. Property other than real property shall be carried at the lesser of cost at the time of request less accumulated depreciation or the market value at the time of valuation, unless it is an asset whose method of valuation is specified in the insurance laws, regulations, or nationally recognized insurance statutory accounting principles.5. The admissibility of property other than real property is subject to review and restriction of admissibility when the net worth of an HMO, less the admitted value of property subject to this section, is below the statutory minimum net worth as required by § 10-16-411, C.R.S., or if such property will cause a hazardous financial condition as determined by Colorado Insurance Regulation 3-1-7 (3 CCR 702-3).6. A licensed health carrier, also authorized to hold a certificate of authority directly to operate an HMO, is restricted to the property which is admitted under rules applicable for the certificate of authority of the licensed health carrier.D. The admitted value of property, other than real property acquired and admitted prior to January 1, 2001, which is not used in the direct delivery of health care services, may be phased out over a period not to exceed three years. The rate for phasing out the admitted value of such property shall be documented in the HMO's records, available for examination by the Division.37 CR 11, June 10, 2014, effective 7/1/201437 CR 12, June 25, 2014, effective 7/15/2014Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/15/201437 CR 23, December 10, 2014, effective 1/1/201538 CR 03, February 10, 2015, effective 3/15/201538 CR 06, March 25, 2015, effective 4/30/201538 CR 09, May 10, 2015, effective 6/1/201538 CR 13, July 10, 2015, effective 7/30/201538 CR 19, October 10, 2015, effective 11/1/201538 CR 21, November 10, 2015, effective 1/1/201638 CR 23, December 10, 2015, effective 1/1/201639 CR 01, January 10, 2016, effective 2/1/201639 CR 05, March 10, 2016, effective 4/1/201639 CR 08, April 25, 2016, effective 5/15/201639 CR 19, October 10, 2016, effective 11/1/201639 CR 20, October 25, 2016, effective 1/1/201739 CR 22, November 25, 2016, effective 1/1/201739 CR 23, December 10, 2016, effective 1/1/201739 CR 23, December 25, 2016, effective 1/1/201740 CR 03, February 10, 2017, effective 3/15/201740 CR 09, May 10, 2017, effective 6/1/201740 CR 15, August 10, 2017, effective 9/1/201740 CR 17, September 10, 2017, effective 10/1/201740 CR 21, November 10, 2017, effective 12/1/201741 CR 04, February 25, 2018, effective 4/1/201841 CR 05, March 10, 2018, effective 6/1/201841 CR 08, April 25, 2018, effective 6/1/201841 CR 09, May 10, 2018, effective 6/1/201841 CR 11, June 10, 2018, effective 7/1/201841 CR 15, August 10, 2018, effective 9/1/201841 CR 17, September 10, 2018, effective 10/1/201841 CR 18, September 25, 2018, effective 10/15/201841 CR 21, November 10, 2018, effective 12/1/201841 CR 23, December 10, 2018, effective 1/1/201942 CR 01, January 10, 2019, effective 2/1/201941 CR 19, October 10, 2018, effective 3/1/201942 CR 03, February 10, 2019, effective 4/1/201942 CR 04, February 25, 2019, effective 4/1/201942 CR 06, March 25, 2019, effective 6/1/201942 CR 08, April 10, 2019, effective 6/1/201942 CR 15, August 10, 2019, effective 9/1/201942 CR 17, September 10, 2019, effective 10/1/201943 CR 02, January 25, 2020, effective 12/20/201943 CR 02, January 25, 2020, effective 12/23/201942 CR 23, December 10, 2019, effective 1/1/202043 CR 01, January 10, 2020, effective 2/1/202042 CR 24, December 25, 2019, effective 2/2/202043 CR 06, March 25, 2020, effective 4/15/202043 CR 10, May 25, 2020, effective 8/1/202043 CR 14, July 25, 2020, effective 8/15/202043 CR 17, September 10, 2020, effective 10/1/202043 CR 18, September 25, 2020, effective 11/1/202043 CR 22, November 25, 2020, effective 12/15/202043 CR 24, December 25, 2020, effective 1/15/202144 CR 03, February 10, 2021, effective 3/15/202144 CR 08, April 25, 2021, effective 5/15/202144 CR 09, May 10, 2021, effective 6/1/202144 CR 10, May 25, 2021, effective 6/14/202144 CR 10, May 25, 2021, effective 6/15/202144 CR 13, July 10, 2021, effective 8/1/202144 CR 15, August 10, 2021, effective 9/1/202144 CR 19, October 10, 2021, effective 11/1/202144 CR 21, November 10, 2021, effective 12/1/202144 CR 23, December 10, 2021, effective 12/30/202144 CR 21, November 10, 2021, effective 1/1/202244 CR 23, December 10, 2021, effective 1/15/202244 CR 24, December 25, 2021, effective 1/15/202245 CR 03, February 10, 2022, effective 3/2/202245 CR 08, April 25, 2022, effective 5/30/202245 CR 09, May 10, 2022, effective 5/30/202245 CR 10, May 25, 2022, effective 6/14/202245 CR 11, June 10, 2022, effective 6/30/202245 CR 11, June 10, 2022, effective 7/15/202245 CR 19, October 10, 2022, effective 11/1/202245 CR 20, October 25, 2022, effective 11/14/202245 CR 21, November 10, 2022, effective 11/30/202245 CR 24, December 25, 2022, effective 1/14/202346 CR 01, January 10, 2023, effective 2/14/202346 CR 06, March 25, 2023, effective 2/15/202346 CR 03, February 10, 2022, effective 3/2/202346 CR 04, February 25, 2023, effective 3/17/202346 CR 05, March 10, 2023, effective 4/15/202346 CR 09, May 10, 2023, effective 5/30/202346 CR 09, May 10, 2023, effective 6/1/202346 CR 10, May 25, 2023, effective 6/15/202346 CR 11, June 10, 2023, effective 6/30/2023