Okla. Admin. Code § 310:4-3-1

Current through Vol. 42, No. 7, December 16, 2024

Section 310:4-3-1 - Financial

The applicant must provide proof of sufficient financial resources to complete the acquisition and to maintain services and staffing that meet licensure standards for at least twelve (12) months following the acquisition.

(1)Financial proof of acquisition. Proof of sufficient financial resources to complete the acquisition must be provided in the following forms, as applicable:

(A) Conventional, bank, seller-carried, third party, or bond financing, see 310:4-1-13(a)(9)(A);

(B) Equity financing, see 310:4-1-13(a)(9)(B); and

(C) Financing or other funding from or guaranteed by a third party that is not duly authorized or chartered as a bank, see 310:4-1-13(a)(9)(C).

(2)Projected budget. Each application must include a projected budget of revenues and expenses for the first 12 months of operation of the facility after the anticipated issuance of the Certificate of Need. The Department may require the applicant to justify the difference between the applicant's projected budget and the facility's expenses and revenues as reported to the Oklahoma Health Care Authority pursuant to 56 O.S. Section 2002 or OAC 317:30-5.

(3)Balance sheets. All balance sheets must include a release authorizing the Department to verify the financial information submitted in the Certificate of Need application. The Department may make independent inquiry into the financial condition of the applicant.

(4)Financial proof for services and staffing. To ensure the maintenance of services and staffing, the applicant must prove the availability of reserves equivalent to the average monthly projected expenses, in addition to funds needed to complete the acquisition. The amount of the average monthly expenses is calculated based on a per-month average of the projected twelve (12) month budget of revenues and expenses submitted with the application. Proof of the availability of reserves must conform to the following:

(A) for reserves to be provided or maintained through letter of credit, line of credit, or conventional, bank or bond financing:

(i) a statement of the proposed principal amount, interest rate and repayment terms, and that the applicant has access to the required funds, signed under oath by a representative of the lending institution or authority;

(ii) a statement of provisions for terminating or rescinding a letter of credit or line of credit;

(B) for reserves to be maintained through the applicant's equity or net worth:

(i) an attested balance sheet that is dated within the past twelve (12) months for the acquiring party and that reflects cash or cash equivalents sufficient to meet the one-month reserves requirement; or

(ii) a certificate of deposit or other proof that funds are available and have not been pledged for some other purpose;

(C) for reserves to be funded or guaranteed by a third party that is not duly authorized or chartered as a bank:

(i) an attested balance sheet, certificate of deposit or other attested proof that is dated within the past twelve (12) months for the third party, unless the third party is a licensed insurer or surplus lines insurer, the United States of America, a state of the United States of America, or an agency or instrumentality thereof; and

(ii) copies of organizational documents and contracts necessary to substantiate the relationship between the applicant and the third party.

(5)Attested documents. For the purpose of this Section, the term "attest" has the same meaning as it is defined in 59 O.S. Section 15.1A.

Okla. Admin. Code § 310:4-3-1

Adopted by Oklahoma Register, Volume 38, Issue 24, September 1, 2021, eff. 9/11/2021