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Department of Behavioral Health and Developmental Services
Guidance Document Change: This is a new guidance document regarding the current requirement for 90 days of operating expenses per the Rules and Regulations for Licensing Providers by the Department of Behavioral Health and Developmental Services (12VAC35-105).

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8/6/19  5:12 pm
Commenter: Jennifer G.Fidura

Comments on Guidance re Financial Reserves
 

Following are comments which represent the thoughts and concerns of the members of the Virginia Network of Private Providers about the Guidance Document proposed by the DBHDS Office of Licensing  “ Requirement for 90 Days of Operating Expenses.” 

 

The statement which is the operational core of this document is at the end of the first paragraph:

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

 

This statement does not reflect the language of the regulation for which this document purports to provide guidance:

12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis.  The amount needed shall be based on a working budget showing projected revenue and expenses.”  

 

Note the words in bold – projected revenue.  The interpretation referenced above does not appear to include the consideration of projected revenue.  While there will be significant differences between the standards set for new applicants and existing providers, the blanket refusal to consider reliable revenue streams for existing providers seems to contradict the regulatory language quoted above.

 

Providers should/must be good cash managers, and, in that vein, should maintain reserves to meet unforeseen circumstances.  However, the assumption of this guidance is that a provider will never utilize any of the specified reserves, but instead will have surplus reserves to meet unforeseen needs while also maintaining “untouched” 90 days of operating expenses.

 

Given the difficulty in establishing a line of credit and/or a reserve of cash to begin with – requiring that a provider essentially sequester those funds and create an additional reserve as part of a good business practice is an extraordinary burden.  Lines of credit sufficient for three months of operating expense (without consideration of revenue) will be impossible to get without real assets to offer as security, and if not “used” and interest paid, will be extremely difficult to maintain. 

 

The concern above would be equally applicable to a sponsored residential home, or for a new provider who utilizes some of their reserve for the purpose for which it is intended, i.e., to provide working capital until revenue begins to cover expenses.  As soon as they use any of the reserve to cover expenses, they fall out of compliance and can be cited for such.

 

While we do not condone providers failing to meet their legal or financial obligations and will work with the Office of Licensing to assist them to develop tools to use when conducting inspections which will identify problem areas, we can easily predict that a strict application of the rule as interpreted above will cause any number of providers both large and small to cease operations. 

 

 

CommentID: 75131
 

8/7/19  1:04 pm
Commenter: Catherine Wilson

90 day line of credit
 

As a Sponsored Residential Provider for the past 12 years I do not understand why in the draft you listed a various of resources for "non-sponsored" residential providers both acceptable and unacceptable but then were unclear in the paragraph for Sponsored. Accepting credit card available balances and disallowing Retirement accounts and life insurance policies does not seem financially sound. It is unclear in your draft if this applies to Sponsored. Also to disallow the account that the Sponsored provider uses for daily expenses seems to be placing an extreme hardship on the provider. This would require the provider to open a second account, possibly incurring fees to simple transfer funds. Sponsored Residential is done in the sponsor's private home and therefore much of their assets may be tied up in their home value and or retirement account. It seems that this draft is adding additional restrictions to the Sponsored Residential program above what is being applied to non-sponsored. Please be more clear in your address to Sponsored Residential.

CommentID: 75352
 

8/12/19  10:12 am
Commenter: Ken Crum, ServiceSource

Guidance Regarding Financial Reserves
 

ServiceSource has been a non-profit service provider for individuals with developmental disabilities for over 40 years in Virginia.  We are very concerned about the Guidance Document proposed by DBHDS Office of Licensing as a Requirement for 90 days of Operating Expenses.

We are specifically concerned about the statement ending the first paragraph:

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

We agree with the Virginia Network of Private Provider comment that this statement does not reflect the language of the regulation for which this document purports to provide guidance:

12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis.  The amount needed shall be based on a working budget showing projected revenue and expenses.”  

ServiceSource suggests that the proposed Guidance Document ignores this important phrase—projected revenue, which for non-profit providers is a key factor.  As a non-profit, our annual operating budget is based on continuing reliable revenue streams since we cannot afford to maintain 25% of our annual working budget as a surplus or untouched cash reserve while we are simultaneously managing our revenues to meet ongoing and unforeseen needs. 

This guidance to sequester funds is an overly restrictive barrier to non-profit agencies, which are partners with DBHDS to meet the needs of citizens with developmental disabilities.

ServiceSource also agrees with the comment posted by VNPP that we do not condone providers failing to meet their legal or financial obligations but we are very concerned that a strict application of the rule as interpreted above will cause undue hardship on both large providers such as ServiceSource as well as other smaller service providers.  We worry that this requirement could even cause some smaller providers to cease operations, at the same time that providers are partnering with DBHDS to increase community services for citizens with developmental disabilities.

Thank you for this opportunity to present our comments. 

CommentID: 75761
 

8/13/19  10:44 am
Commenter: The Arc of Northern Virginia

Concerns with Proposed 90 Days of Operating Expenses Requirement
 

The Arc of Northern Virginia is a non-profit organization focused on protection of human and civil rights for people with developmental disabilities, as well as full, meaningful inclusion.  Though The Arc of Northern Virginia is not a traditional service provider, every single day we work closely with individuals with a range of developmental disabilities and their family members who are using and searching for service providers.  We do this through our Support Coordination program, our Public Guardianship program, and the many thousands of annual requests we get from people seeking information on all manner of subjects.

When people with disabilities and their loved ones ask about finding a provider, we are often fortunate enough to say that Northern Virginia has a large number of quality Medicaid Waiver providers.  However, we are also acutely aware that those providers often operate with narrow margins and must fundraise to keep their doors open.  We understand they struggle to meet the needs of people requesting their services while ensuring high quality supports.  Each day, our providers go above and beyond to ensure the people with developmental disabilities can access life changing supports, and with any less effort, the system would collapse.

Thus, we have serious concerns about new proposals for Medicaid Waiver Service Providers to have 90 days’ worth of reserve expenses on hand, without being able to take projected revenue into account.  This is a very significant financial burden, one that we fear many or most of our non-profit providers surviving on Medicaid dollars cannot meet.  This change does not seem to do anything greater to ensure providers are stable and healthy, but it does go a long way toward making operations challenging. 

Given the great challenges people already face in finding and maintaining a good provider, the thought of having the number of options plummet and/or be put under greater strain is deeply troublesome.  We have serious concerns that the result would be a lack of provider choice for people with disabilities, especially those who favor smaller organizations that would undoubtedly break under the strain of having to secure large amounts of credit and savings.

We hope the projected 90 day revenue will be taken into account in ensuring providers have adequate savings, and that DMAS and DBHDS will be doing all that is in their power to ensure providers are fully reimbursed in a timely manner.  That is a truly critical component to provider health.

Thank you for considering our remarks and for doing all that is possible to preserve provider choice for people with disabilities and their families.  That choice is a critical right and avenue toward ensuring people are able to find and utilize the most integrated services available.

CommentID: 75773
 

8/14/19  1:05 pm
Commenter: Nancy Hopkins-Garriss, Pleasant View, Inc.

Guidance related to 90 Days of Cash Reserves
 

Pleasant View, Inc. has provided support to individuals who have disabilities since 1971.  We are a non profit with a proven track record  of good service and support. 

We are concerned about the proposed Guidance Document "Requirements for 90 Days of Operating Expenses."  At PVI, we strongly believe that agencies should be fiscally responsible and meet all financial obligations.  Providers must operate as responsible businesses as well as support providers.   

We are concerned with the statement in the guidance document, "Therefore, both applicants of licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit."   In the original regulation, the language includes  the words"projected income."   It is irresponsible for an organization, and especially a non-profit one, to maintain the level of funding necessary to meet the 90 day requirement without including the projected income.  Funds should be used for program improvement and enhancement.   It is also impossible to maintain that level of open ended line of credit with a lending institution.  

We agree with and support the comments from the VNPP.   As stated, we support the Department's efforts to ensure that all agencies providing services be responsible businesses.  We would also be supportive of inspection tools that provide information to the  Office of Licensing indicating agency fiscal responsibility.  

 

 

CommentID: 75778
 

8/19/19  11:59 am
Commenter: Elisabeth Poe, Richmond Residential Services,Inc.

Requirment for Ninety Days of Operating Exepnses
 

Richmond Residential Services, Incorporated has been providing an array for residential and other community services to adults with intellectual disabilities in the metropolitan Richmond area since 1979. We are a private, nonprofit agency, and we have a number of concerns about the requirement for  providers to maintain ninety days of unused financial resources. We agree with the other providers who have commented that "projected revenue", as specified in the actual regulation, 12VAC35-105-210, should be considered as valid financial resources to cover operating expenses.  Maintaining an unused line of credit with a bank or credit union can be expensive and difficult.  Implementing this requirement at a time  when we are dealing with Waiver rates which have not kept up with the increased costs of doing business, e.g. worker's compensation, health  and liability insurance, utilities, food costs, even modest staff wage increases, etc. will have a negative impact to providers, especially smaller ones. As a nonprofit, we strive to maintain resources for emergencies and as a safety net.; however, we also balance that with putting resources toward our most valuable asset-our employees. We know that Direct Support Professionals in Virginia rarely make a living wage based on the Medicaid Waiver rates. Asking us to sequester funds that might be used to pay our staff a small increase places providers in an uncomfortable position.

  Additionally, we are concerned that Licensing staff lack sufficient training or expertise in interpreting financial documents.  The lack of detailed guidance on the calculations used to determine the adequacy of provider resources leaves too much leeway to the judgment of individual specialists. Using cash balances and open lines of credit to confirm ninety days of operating expenses is a faulty assessment and simply numbers in a vacuum if one does not have information on accounts payable and liabilities. Lastly, we are concerned about the confidentiality of the information and how it will be maintained.

  We understand the importance of all licensed providers maintaining their legal and financial obligations. However, this seems to be the wrong measure to determine that accurately in many cases. We appreciate the opportunity to comment.

CommentID: 75817
 

8/20/19  4:42 pm
Commenter: Arthur M. Ginsberg, Community Residences, Inc.

Comments on the Requirement for 90 Days of Operating Expenses
 

I am providing comments on behalf of Community Residences, Inc. d/b/a CRi in my capacity as the President/CEO.  CRi has been proudly providing services and supports in Virginia for forty-five years as a non-profit human service agency.

CRi is extremely concerned with the language in the Guidance Document proposed by the DBHDS Office of Licensing.  The Guidance Document states "Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit". This statement does not reflect the language of the regulation for which the document purports to provide guidance: 12VAC35-105-210 states "The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis.  The amount needed shall be based on a working budget showing at least 90 days on an ongoing basis.  The amount needed shall be based on a working budget showing projected revenue and expenses". 

The language in the Guidance Document does not include projected revenue.  This is a significant omission which has implications for providers.  The reimbursement for the services CRi provides to over 800 Virginians a year does not allow for the generation of an operating margin to generate a cash reserve of 90 days of operating expenses.  If DBHDS and DMAS would revise the reimbursement models to allow for this necessary operating margin, providers would then be in a position to place 90 days of cash in reserve in alignment with the regulation.  In lieu of a change in the reimbursement models, projected or budgeted revenue must be considered by the Office of Licensing. 

The interpretation by the Office of Licensing would prove to be an unfunded mandate for providers.  This would place an impossible burden on providers.  On behalf of CRi,  I implore the DBHDS Office of Licensing to revise the language of the Guidance Document or make the necessary changes to the reimbursement models.   

CommentID: 75822
 

8/22/19  3:43 pm
Commenter: Linda Sexton

Requirement for 90 days of operation expenses
 

I have been providing supports for an individual as a Sponsored Residential Provider now for 5 years, licensed under DBHDS.   I maintain the 90 days of resources required of me,  but I think the strict rules being set forth in regulations 12VAC35-105-40 can prevent start-up of new providers who are willing, and want to provide the services. 

There is a great need for service providers to meet the support needs of individuals with disabilities and this would make it almost impossible to become providers.  They will be denied the opportunity and could cause hardship in the future, especially not being able to count as income, payments received for residents living in the home, retirement accounts or Life Insurance Cash Value.

The re-imbursement rates paid by Medicaid already makes it difficult to be a provider and maintain qualified help much less add the extra burden of this 90 day resources.

Thanks for allowing the comment

CommentID: 75832
 

8/24/19  2:52 pm
Commenter: Matthew Osborne

Comments on Guidance re: Financial Reserves
 

The requirement to maintain 90-days of operating expenses and that "providers must be able to provide proof, at any time when requested by a representative from the department", places an extraordinary burden on current providers and presents a formidable barrier to future providers and those looking to add/expand services.

The Faison Center shares VNPP's concerns presented in an earlier comment/post.

CommentID: 75833
 

8/26/19  1:07 pm
Commenter: John Humphreys- FHRS

Guidance overreach
 

Initially, I wish to concur with the previous posters-- the guidance document does plainly contradict the plain text of the regulation and creates a new regulatory requirement by excluding consideration of projected revenues, and unused line of credit would be difficult if not impossible to maintain in perpetuity, an “untouched” reserve fund is onerous/unwise and the guidance for sponsors is unwarranted, excessively restrictive and counterproductive.

In addition, as regards the requirement for providers I would add that the current list of acceptable/unacceptable proof documents requires more clarity and/or revision. Specifically, the distinction between a “savings” account which is acceptable and a “retirement” account which is not acceptable under the current guidance document. While the guidance document and proofs place a heavy emphasis on credit and this option should be available, providers who take a safer route and maintain the 90 day requirement in cash or cash equivalents should not be punished for taking this extra precaution; particularly because the required amount is so large as to make the penalty significant. The idea of a savings account is not what it used to be and the excessively low interest rates available, occasionally coupled with fees if it’s not regularly used (as the regulation requires) is a very poor way to utilize reserve capital. Rather this reserve capital can be much better utilized in alternative types of accounts (short-term CDs, investment accounts, bond accounts etc.), where the funds would be readily available in the event of an emergency or lapse of income but earn a much higher rate of return while they sat idle waiting for that day to come. The guidance document is unclear as to what would constitutes a “retirement account” is this limited to a very specific type of account, such as an IRA, (if so why since you could cash this out, pay the penalty and use the funds to meet emergency needs -anybody facing a true emergency would)? If not very limited, what would count as a “retirement account” for example I keep almost 2 months of excess funds in the checking account for the licensed business, but as a sole proprietor should I ever retire I calculate those excess funds to be part of my retirement – does this mean I’m no longer allowed to count those excess funds I’ve held in the business for years now as part of meeting the 90 day requirement? Clearly, some clarification is needed. Providers who avoid reliance on credit and take the safe route of assuring that the required funds are available in cash or cash equivalents at all times should not be punished with reduced flexibility on how they store those assets, particularly when they are excessively sufficient.

A much more significant concern, is the portion of the guidance document creating new regulatory requirements for sponsors that are redundant, excessively interfere in good business practices and are overly restrictive creating a burden that will be counterproductive to service access/provision and far exceeds the statutory/regulatory text/intent.

1 – the requirement is redundant. If the provider standards are enforced then the provider would have 3 months of emergency funds to assure the sponsor continued to receive payment for the individuals served for the full 90 days, which would provide the sponsor with more than sufficient time to seek out a new provider, find new placement for the individuals or make other adaptations to address the concern. This would become then in essence become a 180 day requirement never envisioned by the regulation and completely unnecessary.

2 – the requirements prohibit good business practice. It creates a requirement that the “sponsors themselves, not the sponsor’s employer” must demonstrate these funds are available, which is inconsistent with an age-old and often considered best practice of business to provide seed money and backing to startups that can serve the larger business’s interest/needs. Many sponsors currently providing excellent services would not have been able to start if this requirement was in place as it creates a significant barrier to entry; that is frequently quickly resolved once the sponsor gets going. Specifically consider a provider who is able to provide acceptable proof documents that they can meet their organizational, personal and all sponsor financial needs for 90 days and has a legally enforceable contract with the sponsor that requires them to retain and provide those funds should they be needed, which would clearly accomplish the statutory and regulatory intent but would be forbidden under the guidance document unnecessarily. It is also important to note that many sponsors are independent contractors and the provider is not their “employer” – with this type of sponsor be exempt from the requirement in the guidance document and if not why not?

3 – the acceptable proof for the sponsor is excessively restrictive and far exceeds both the regulation and what should be required to meet the regulatory intent. As written the guidance document requires “these resources must be kept separate from accounts from which personal daily operating expenses are withdrawn or from which payments received from residents living in the home are deposit”. This appears to create a requirement that the sponsor set aside a cash hoard in a separate account” untouched” to meet the 90 day regulation. The current regulation has no such onerous requirement and it would permit a provider to consider other sources of income into the home (besides the payments for individuals receiving services in the home) in evaluating their ability to meet the regulatory requirements; the sponsors spouse may have a full-time job that independently meets all the daily operational needs of the home on an ongoing basis, room and board payments can be considered, pension payments, Social Security or disability payments, annuity payments, legal settlement agreement payments… etc. could all quite easily meet the need identified in the legislative/regulatory intent without forcing the sponsor to set aside an unproductive pile of cash. Additionally, this would prevent a sponsor who was able to demonstrate a clear line of credit to meet emergency needs for 90 days or more from qualifying. For example, a homeowner with no mortgage who has an established home equity line of credit that far exceeds the needed funds and/or unused credit card balances that could be used to meet the need in an emergency – if this is sufficient proof for a provider which could impact hundreds of people why is it not sufficient proof for a sponsor who impacts one or 2? Finally, I would note that the guidance is poorly worded, because if the account were ever used it would be for personal daily operating expenses and the guidance prohibits withdrawals from that account for that purpose and after it was used it would prohibit payments received from being deposited to build the account back up; truly self-defeating in concept.

4 – the sponsor requirement in the guidance document would for the reasons indicated above reduce sponsor entry into the system, cause some existing sponsors to leave the system and others to forgo service improvements (which they would need to finance, thus increasing the cash required in the separate untouchable account) which is clearly counterproductive for improved access/services. Although the reduced reimbursement rate for sponsors is clear evidence otherwise, the state continues to claim that they want individuals in smaller homes consistent with best practices and HCBS integration requirements. This guidance document would make the smallest homes (Sponsored Homes) less available and thus be counterproductive to their professed goals/values.

 

While the intent of both the provider and sponsor requirements in the regulations is laudable and adequate protections should be enforced, the guidance document under consideration is unwarranted, unjustified, vague, excessively restrictive and counterproductive to the provision of access and services in the Commonwealth and creates additional regulatory burdens that fall excessively on Small providers in favor of large bureaucratic provider models. As a result, it should receive serious reconsideration and submittal as a regulatory change with a full review prior to implementation of any of its proposed onerous barriers.

CommentID: 75838
 

8/29/19  2:21 pm
Commenter: SOAR365

Response to DBHDS 90-Day Reserves Requirement
 

SOAR365 is a larger provider of human services and employment opportunities for individuals with disabilities, primarily serving the Greater Richmond market.  We were founded in 1954 and have provided services on an uninterrupted basis for the past 65 years.  We are a financially stable and strong organization, but we are still very concerned by the Guidance Document proposed by DBHDS Office of Licensing as a Requirement for 90 days of Operating Expenses.  We are specifically concerned about the statement ending the first paragraph:

"Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit."

First, we agree with the Virginia Network of Private Providers comment that this statement does not reflect the language of the regulation for which this document purports to provide guidance:

"12VAC35-105-210 states "The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis.  This amount shall be based on a working budget showing projected revenue and expenses."

Nor does this guidance reflect the spirit of the regulation.  The regulation is intended to ensure that providers have the ability to meet their financial obligations.  SOAR365's ability to meet our financial obligations is based upon a combination of our cash on hand (including available lines of credit), any accounts receivable on hand, and the future revenues generated in conjunction with the delivery of future services (which drive costs in the upcoming 90-day period).  Your proposed guidance ignores two of three sources of liquidity over the upcoming 90-day period.

This guidance to sequester funds equal to 25% of our annual operating budget is an overly restrictive barrier to non-profit agencies, which are partners with DBHDS to meet the needs of citizens with intellectual and developmental disabilities.  The inevitable consequence of this will be a degradation in the quality of services provided, which is the worst possible outcome for the citizens served by these agencies.

At SOAR365, we typically hold 30-45 days of cash on hand, we have a line of credit (which has never been drawn upon) equal to about 20 days of cash requirements, and we always have about 30-45 days of receivables on hand from dependable payers such as the U.S. Government, the Commonwealth of Virginia, Henrico and Chesterfield Counties, etc.

Ignoring both our future revenues and our accounts receivable in evaluating our ability to meet our future obligations places an additional, unnecessary burden on our organization and prevents ongoing investments in delivering high quality programs, which is how we currently deploy our excess cash.

Thank you for this opportunity to present our comments.

CommentID: 75844
 

8/30/19  11:01 am
Commenter: Susan Curran / ICT Services, Inc.

Requirement for 90 Days of Operating Expenses
 

I too must agree with the previous comments.  This new "guidance" is an overreach of the actual  regulatory language.  Small providers will have trouble meeting this new requirement.  This guidance essentially changes the regulatory requirements rather than defining the regulation.  Therefore DBHDS should use the process for regulatory change rather than issuing a Guidance Document which make a significant regulatory change.  Some of us small providers will not survive.

CommentID: 75847
 

8/30/19  4:58 pm
Commenter: Clif MacDonald, Good Life Corporation

Guidance re Financial Reserves
 

Good Life Corporation has been providing supports to people with intellectual disability since 1989.

GLC supports the statement submitted by the Virginia Network of Private Providers and agrees that the language of the regulation including, “The amount needed shall be based on a working budget showing projected revenue and expenses.”  is of utmost importance and is overlooked in the Guidance Document proposed by the DBHDS Office of Licensing.

Both non-profit and for-profit providers must balance the responsibilities of operating a viable business and providing services to people.  Not considering projected revenue in establishing surplus reserves is contrary to common business practice.  Financial institutions take projected revenue into consideration, in addition to surplus reserves, when establishing the strength of a business.  There must be a balance between meeting the needs of the business, or the operational side of providing services, and providing services.  Disregarding a provider’s projected revenue shifts the balance, unnecessary taking funds from benefiting the people the provider supports.

Good Life Corporation agrees with the comments from VNPP and hopes collaboration can occur with the Office of Licensing to develop tools to use when conducting inspections which will identify problem areas without causing providers to cease operations.

CommentID: 75848
 

8/30/19  7:18 pm
Commenter: Sylisa Lambert-Woodard, Pres/CEO Pathway Homes, Inc.

90-day reserve requirement
 

Pathway Homes, Inc., is a private, not for profit agency providing services to individuals with serious mental illness, substance use disorders and intellectual and developmental disabilities.  We primarily receive funding on a reimbursement, fee for service basis. Although we have secured a line of credit, it is generally very difficult to secure a line of credit without utilizing restricted assets of the organization as collateral and security. The on- hand cash reserves, with the available line of credit, are at times insufficient to meet the 90-day reserve requirement as stated in the proposed regulation. 

As a DBHDS provider, with an extensive asset portfolio of homes, required reserves are maintained for the care, maintenance and improvements needed to these properties. The proposed regulation would not include these cash reserves in the requirement, yet they are essential to maintaining our asset portfolio to provide the necessary housing to our vulnerable consumers. 

Additionally, we also share the same concern that it is very difficult to interpret audited and unaudited financial statements due the presentation in conformance with the Government Auditing Standards, Uniform Administrative Requirements.  The Notes to the financial statements, provide information to supplement the Statement of Activities, however they do not provide information for which programs funded are licensed by DBHDS.

CommentID: 75849
 

8/31/19  1:39 pm
Commenter: Karen Tefelski, vaACCSES

Comments - Proposed 90-Day Reserve Requirements
 

I am submitting the following comments on behalf of the vaACCSES Board of Directors and our member organizations.  The DBHDS Office of Licensing proposed guidance document dated July 12, 2019 directly contradicts the language in the current regulation for which the guidance seeks to interpret.

Current regulation 12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis.  This amount needed shall be based on a working budget showing projected revenue and expenses.

The proposed guidance below by the DBHDS Office of Licensing exceeds the intent and spirit of the current regulation and creates a new onerous regulatory requirement. Any substantive policy change requires that it proceed through the traditional regulatory process.

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

Although we understand and support the importance of all licensed providers to maintain their legal and financial obligations, the overly strict interpretation of the current regulation will impose an unfunded mandate and will most certainly cause an undue hardship on both large and small providers.

We oppose the proposed guidance document language for the following reasons:

  • The term “projected revenue” is missing from the new language.  This is a significant omission and must be included as a key factor when considering 90 days of operating budget.  The exclusion of this option is also a substantive policy change.  Any substantive policy change requires that it proceed through the traditional regulatory process and not through an interpretive guidance document.
  • The requirement of maintaining 90 days of sequestered cash is onerous and unreasonable.
    • Removes millions of dollars statewide from the DD service system and prevents an organization from investing resources in quality staff and/or expansion of services when a significant amount of resources is sitting in an untouchable “escrow” account.
    • Providers are currently struggling to maintain operations and recruit and retain staff with the current low Medicaid reimbursement rates. 
    • May lead some providers to cease operations entirely.

We propose the following recommendations:

  • “Projected revenue” must continue to be included as an option for providers to meet their financial obligations for a 90-day operating budget.  An organization’s financial obligations are usually based on a combination of cash on hand, including lines of credit, accounts receivable on hand, and future revenues generated in conjunction with the delivery of future services.  Ignoring both future revenues and an organization’s accounts receivable imposes an unnecessary and unwarranted burden on providers.
  • Because licensing staff do not have the necessary expertise in interpreting financial documents nor should we expect them to have this expertise – there may be other alternatives that an organization can provide to prove sound fiscal practices and financial viability other than the sequestration of 90 days of operating expenses in cash or a line of credit equivalent.
    • Requirement of a financial review or audit by an external certified accounting firm and/or an accompanying auditor’s letter stating that the auditor found the organization’s accounting standards to be compliant with U.S. generally acceptable accounting practices with no significant audit findings, that the organization has positive cash flow to sustain ongoing operations, and that the financial viability of the organization is supported with reliable and  sound fiscal management.
    • Waive the requirement of a 90-day operating budget if an organization is CARF accredited or a United Way member. CARF accreditation requires strict fiscal policy and operation standards. United Way members must submit, as part of the annual application process, copies of annual audits and 990’s that are reviewed for administrative costs and expense-to- income standards. United Way members already complete an annual audit review.
    • For not-for-profits, DBHDS can also use GuideStar to assess and research the annual audits and/or 990’s of licensed not-for-profits. GuideStar gathers, organizes and distributes information about U.S. not-for-profits in their data base.

DD Waiver licensed providers have been and continue to be valued partners with DBHDS in the delivery of valued quality services to Virginians with disabilities.  Extreme caution must be considered before moving forward with any dramatic changes in additional financial requirements of licensed providers. The proposed omission of “projected revenue” in the Guidance document alone could have dire unanticipated outcomes that could permanently damage the DD service system as a whole.

We would welcome the opportunity to actively work with the DBHDS Office of Licensing to develop a satisfactory remedy to whatever problem you seek to solve regarding the fiscal responsibilities of providers.

CommentID: 75852
 

9/1/19  1:35 pm
Commenter: Career Support Systems, Inc.

Requirement for 90 Days of Operating ExpensesMy organization is Career Support Systems, Inc. and we
 

My organization is Career Support Systems, Inc. and we have been in business since 1995.  We provide Supported Employment, Work Place Assistance and Benefit Management across the Commonwealth of Virginia.

We agree with the vaACCSES and the VNPP comments that the proposed guidance document contradicts the language in the current regulation for which the guidance seeks to interpret.

Current regulation 12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis. This amount needed shall be based on a working budget showing projected revenue and expenses.

The proposed DBHDS guidance Office of Licensing stated below exceeds the intent and spirit of the current regulation and creates a new onerous regulatory requirement.

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

This proposed regulatory requirement is a substantive policy change and therefore requires the proposed guidance interpretation go through the traditional regulatory process.

We understand and support the importance of all licensed providers to maintain their legal and financial obligations. However, applying an overly strict interpretation of the current regulation will impose an unfunded mandate and will create an undue hardship on both large and small providers.

We oppose the proposed guidance document language for the following reasons:

·       The term “projected revenue” is missing from the new language. This is a significant omission and must be included as a key factor when considering 90 days of operating budget. The exclusion of this option is also a substantive policy change. Any substantive policy change requires that it proceed through the traditional regulatory process and not through an interpretive guidance document.

·       The requirement of maintaining 90 days of sequestered cash is onerous and unreasonable. The proposed interpretation: 

o   Removes millions of dollars statewide from the DD service system by requiring licensed providers to place a significant amount of resources in an untouchable “escrow” account.

o   Prevents providers from using essential amounts of money needed to maintain operational capacity (i.e. recruit and retain staff and expand program services) in a fiscal climate already negatively impacted by years of low Medicaid reimbursement rates. 

o   Increases fiscal hardships such that some providers may have no option but to cease operations entirely.

We propose the following recommendations:

·       “Projected revenue” must continue to be included as an option for providers to meet their financial obligations for a 90-day operating budget. An organization’s financial obligations are usually based on a combination of cash on hand, including lines of credit, accounts receivable on hand, and future revenues generated in conjunction with the delivery of future services. Ignoring both future revenues and an organization’s accounts receivable imposes an unnecessary and unwarranted burden on providers.

·       Licensing staff do not have the necessary expertise in interpreting financial documents nor should we expect them to have this expertise. There are reliable alternatives to ensuring and determining an organization’s fiscal stability other than the sequestration of 90 days of operating expenses in cash or a line of credit equivalent.

o   Require a financial review or audit by an external certified accounting firm and/or an accompanying auditor’s letter stating that the auditor found the organization’s accounting standards to be compliant with U.S. generally acceptable accounting practices with no significant audit findings, that the organization has positive cash flow to sustain ongoing operations, and that the financial viability of the organization is supported with reliable and sound fiscal management.

o   Waive the requirement of a 90-day operating budget if an organization is CARF accredited or a United Way member. CARF accreditation requires strict fiscal policy and operation standards. United Way members already complete an annual audit review that includes submission of annual audits and 990’s that are reviewed by United Way for administrative costs and expense-to-income standards.

o   For not-for-profits, DBHDS can also use GuideStar to assess and research the annual audits and/or 990’s of licensed not-for-profits. GuideStar gathers, organizes and distributes information about U.S. not-for-profits in their data base.

DD Waiver licensed providers have a proven history as valued partners with DBHDS in the delivery of valued quality services to Virginians with disabilities. Extreme caution must be considered before moving forward with any dramatic changes in additional financial requirements of licensed providers. The proposed omission of “projected revenue” in the Guidance document alone could have dire unanticipated outcomes that could permanently damage the IDD service system as a whole.

Providers are willing to actively work with the DBHDS Office of Licensing to develop a satisfactory remedy to whatever problem you seek to solve regarding the fiscal responsibilities of providers.

Thank you for the opportunity to state our position!

Joanne Ellis, M.Ed

Director of Operations/Partner

CommentID: 75872
 

9/2/19  8:41 am
Commenter: Sean McGinnis, Hartwood Foundation, Inc.

Comments on Guidance Document requiring 90 days of operating funds
 

Hartwood Foundation, Inc. was founded in 1973 and currently provides housing and residential supports to more than one hundred fifty individuals with developmental disabilities in Fairfax and Henrico counties. At a time when many of the individuals we support are no longer able to work or attend day programs on a full-time basis and rely upon us for an increase in frequency and intensity of supports at home, additional unfunded mandates are unwelcome. 

As stated, the DBHDS guidance document is inconsistent with the language of the regulation. The guidance document states that, "...have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit" whereas the regulation states, "...the amount needed shall be based on a working budget showing projected revenue and expenses". Without allowing for projected revenue, we consider this a would-be unfunded mandate and an untenable burden on many providers.

We strongly encourage a revision to the guidance document to allow for projected revenues to be included in the requirement and we thank you for your consideration.

 

CommentID: 75875
 

9/2/19  12:46 pm
Commenter: Karen Smith

Oppose Proposed 90 Day Reserve Requirement
 

INSIGHT has provided residential services  for over 45 years and when the local institution closed we made a commitment to support those with complex medical needs to live in our community.  Because Medicaid does not pay for all that is needed to support these individuals, we already have to secure additional funding to ensure their well-being.

We try to be good stewards of the funds entrusted to us and adding this requirement is another unfunded mandate.  With the system needing additional residential providers in some areas of the Commonwealth, this requirement will certainly discourage new providers.  

Projected revenue is missing from the new language and this should be considered in the review of the 90 days of operating budget.

 

 

 

CommentID: 75876
 

9/3/19  10:15 am
Commenter: Eva-Elizabeth Chisholm, L'Arche GWDC

Concerns re: guidance documents
 

L'Arche GWDC has been a part of the provider community in Northern Virginia over the last thirteen years, creating homes of belonging in our two licensed group homes in Arlington. Our presence may be small, but we are committed to making known the gifts of our core members - those with intellectual disability - through our mutually transforming relationships. We also are committed to supporting and advocating with other providers as change and growth happens.

We agree with the vaACCSES and the VNPP comments that the proposed guidance document contradicts the language in the current regulation for which the guidance seeks to interpret.

Current regulation 12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis. This amount needed shall be based on a working budget showing projected revenue and expenses.

The proposed DBHDS guidance Office of Licensing stated below exceeds the intent and spirit of the current regulation and creates a new onerous regulatory requirement.

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

This proposed regulatory requirement is a substantive policy change and therefore requires the proposed guidance interpretation go through the traditional regulatory process.

We understand and support the importance of all licensed providers to maintain their legal and financial obligations. However, applying an overly strict interpretation of the current regulation will impose an unfunded mandate and will create an undue hardship on both large and small providers.

We oppose the proposed guidance document language for the following reasons:

·       The term “projected revenue” is missing from the new language. This is a significant omission and must be included as a key factor when considering 90 days of operating budget. The exclusion of this option is also a substantive policy change. Any substantive policy change requires that it proceed through the traditional regulatory process and not through an interpretive guidance document.

·       The requirement of maintaining 90 days of sequestered cash is onerous and unreasonable. The proposed interpretation: 

o   Removes millions of dollars statewide from the DD service system by requiring licensed providers to place a significant amount of resources in an untouchable “escrow” account.

o   Prevents providers from using essential amounts of money needed to maintain operational capacity (i.e. recruit and retain staff and expand program services) in a fiscal climate already negatively impacted by years of low Medicaid reimbursement rates. 

o   Increases fiscal hardships such that some providers may have no option but to cease operations entirely.

We propose the following recommendations:

·       “Projected revenue” must continue to be included as an option for providers to meet their financial obligations for a 90-day operating budget. An organization’s financial obligations are usually based on a combination of cash on hand, including lines of credit, accounts receivable on hand, and future revenues generated in conjunction with the delivery of future services. Ignoring both future revenues and an organization’s accounts receivable imposes an unnecessary and unwarranted burden on providers.

·       Licensing staff do not have the necessary expertise in interpreting financial documents nor should we expect them to have this expertise. There are reliable alternatives to ensuring and determining an organization’s fiscal stability other than the sequestration of 90 days of operating expenses in cash or a line of credit equivalent.

o   Require a financial review or audit by an external certified accounting firm and/or an accompanying auditor’s letter stating that the auditor found the organization’s accounting standards to be compliant with U.S. generally acceptable accounting practices with no significant audit findings, that the organization has positive cash flow to sustain ongoing operations, and that the financial viability of the organization is supported with reliable and sound fiscal management.

o   Waive the requirement of a 90-day operating budget if an organization is CARF accredited or a United Way member. CARF accreditation requires strict fiscal policy and operation standards. United Way members already complete an annual audit review that includes submission of annual audits and 990’s that are reviewed by United Way for administrative costs and expense-to-income standards.

o   For not-for-profits, DBHDS can also use GuideStar to assess and research the annual audits and/or 990’s of licensed not-for-profits. GuideStar gathers, organizes and distributes information about U.S. not-for-profits in their data base.

DD Waiver licensed providers have a proven history as valued partners with DBHDS in the delivery of valued quality services to Virginians with disabilities. Extreme caution must be considered before moving forward with any dramatic changes in additional financial requirements of licensed providers. The proposed omission of “projected revenue” in the Guidance document alone could have dire unanticipated outcomes that could permanently damage the IDD service system as a whole.

Providers are willing to actively work with the DBHDS Office of Licensing to develop a satisfactory remedy to whatever problem you seek to solve regarding the fiscal responsibilities of providers.

CommentID: 75882
 

9/3/19  10:31 am
Commenter: Shirley A Lyons

Agreement with comments re financial reserves
 


The statement which is the operational core of this document is at the end of the first paragraph:

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

 

This statement does not reflect the language of the regulation for which this document purports to provide guidance:

12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis.  The amount needed shall be based on a working budget showing projected revenue and expenses.”  

 

Note the words in bold – projected revenue.  The interpretation referenced above does not appear to include the consideration of projected revenue.  While there will be significant differences between the standards set for new applicants and existing providers, the blanket refusal to consider reliable revenue streams for existing providers seems to contradict the regulatory language quoted above.

 

Providers should/must be good cash managers, and, in that vein, should maintain reserves to meet unforeseen circumstances.  However, the assumption of this guidance is that a provider will never utilize any of the specified reserves, but instead will have surplus reserves to meet unforeseen needs while also maintaining “untouched” 90 days of operating expenses.

 

Given the difficulty in establishing a line of credit and/or a reserve of cash to begin with – requiring that a provider essentially sequester those funds and create an additional reserve as part of a good business practice is an extraordinary burden.  Lines of credit sufficient for three months of operating expense (without consideration of revenue) will be impossible to get without real assets to offer as security, and if not “used” and interest paid, will be extremely difficult to maintain. 

I agree with the following information: 

The concern above would be equally applicable to a sponsored residential home, or for a new provider who utilizes some of their reserve for the purpose for which it is intended, i.e., to provide working capital until revenue begins to cover expenses.  As soon as they use any of the reserve to cover expenses, they fall out of compliance and can be cited for such.

 

While we do not condone providers failing to meet their legal or financial obligations and will work with the Office of Licensing to assist them to develop tools to use when conducting inspections which will identify problem areas, we can easily predict that a strict application of the rule as interpreted above will cause any number of providers both large and small to cease operations. 

CommentID: 75883
 

9/3/19  10:59 am
Commenter: Myca E. Gray, MVLE

Comments - Requirement for 90 Days of Operating Expenses"
 

MVLE has been in business since 1971, providing community-based employment and therapeutic support services for individuals with disabilities and other barriers.

We agree with the vaACCSES and the VNPP comments that the proposed guidance document contradicts the language in the current regulation for which the guidance seeks to interpret.

Current regulation 12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis. This amount needed shall be based on a working budget showing projected revenue and expenses.”

The proposed DBHDS guidance Office of Licensing stated below exceeds the intent and spirit of the current regulation and creates a new onerous regulatory requirement.

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

This proposed regulatory requirement is a substantive policy change and therefore requires the proposed guidance interpretation go through the traditional regulatory process.

We understand and support the importance of all licensed providers to maintain their legal and financial obligations. However, applying an overly strict interpretation of the current regulation will impose an unfunded mandate and will create an undue hardship on both large and small providers.

We oppose the proposed guidance document language for the following reasons:

  • The term “projected revenue” is missing from the new language. This is a significant omission and must be included as a key factor when considering 90 days of operating budget. The exclusion of this option is also a substantive policy change. Any substantive policy change requires that it proceed through the traditional regulatory process and not through an interpretive guidance document.
  • The requirement of maintaining 90 days of sequestered cash is onerous and unreasonable. The proposed interpretation:
    • Removes millions of dollars statewide from the DD service system by requiring licensed providers to place a significant amount of resources in an untouchable “escrow” account.
    • Prevents providers from using essential amounts of money needed to maintain operational capacity (i.e. recruit and retain staff and expand program services) in a fiscal climate already negatively impacted by years of low Medicaid reimbursement rates.
    • Increases fiscal hardships such that some providers may have no option but to cease operations entirely.

We propose the following recommendations:

  • “Projected revenue” must continue to be included as an option for providers to meet their financial obligations for a 90-day operating budget. An organization’s financial obligations are usually based on a combination of cash on hand, including lines of credit, accounts receivable on hand, and future revenues generated in conjunction with the delivery of future services. Ignoring both future revenues and an organization’s accounts receivable imposes an unnecessary and unwarranted burden on providers.
  • Licensing staff do not have the necessary expertise in interpreting financial documents nor should we expect them to have this expertise. There are reliable alternatives to ensuring and determining an organization’s fiscal stability other than the sequestration of 90 days of operating expenses in cash or a line of credit equivalent.
    • Require a financial review or audit by an external certified accounting firm and/or an accompanying auditor’s letter stating that the auditor found the organization’s accounting standards to be compliant with U.S. generally acceptable accounting practices with no significant audit findings, that the organization has positive cash flow to sustain ongoing operations, and that the financial viability of the organization is supported with reliable and sound fiscal management.
    • Waive the requirement of a 90-day operating budget if an organization is CARF accredited or a United Way member. CARF accreditation requires strict fiscal policy and operation standards. United Way members already complete an annual audit review that includes submission of annual audits and 990’s that are reviewed by United Way for administrative costs and expense-to-income standards.
    • For not-for-profits, DBHDS can also use GuideStar to assess and research the annual audits and/or 990’s of licensed not-for-profits. GuideStar gathers, organizes and distributes information about U.S. not-for-profits in their data base.

DD Waiver licensed providers have a proven history as valued partners with DBHDS in the delivery of valued quality services to Virginians with disabilities. Extreme caution must be considered before moving forward with any dramatic changes in additional financial requirements of licensed providers. The proposed omission of “projected revenue” in the Guidance document alone could have dire unanticipated outcomes that could permanently damage the IDD service system as a whole.

Providers are willing to actively work with the DBHDS Office of Licensing to develop a satisfactory remedy to whatever problem you seek to solve regarding the fiscal responsibilities of providers.

CommentID: 75885
 

9/3/19  11:09 am
Commenter: Michelle Lotrecchiano, MVLE Inc

Comments - Requirements for 90 Days of Operating Expenses
 

MVLE has been in business since 1971, providing community-based employment and therapeutic support services for individuals with disabilities and other barriers.

We agree with the vaACCSES and the VNPP comments that the proposed guidance document contradicts the language in the current regulation for which the guidance seeks to interpret.

 

Current regulation 12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis. This amount needed shall be based on a working budget showing projected revenue and expenses.”

The proposed DBHDS guidance Office of Licensing stated below exceeds the intent and spirit of the current regulation and creates a new onerous regulatory requirement.

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

 

This proposed regulatory requirement is a substantive policy change and therefore requires the proposed guidance interpretation go through the traditional regulatory process.

We understand and support the importance of all licensed providers to maintain their legal and financial obligations. However, applying an overly strict interpretation of the current regulation will impose an unfunded mandate and will create an undue hardship on both large and small providers.

 

We oppose the proposed guidance document language for the following reasons:

  • The term “projected revenue” is missing from the new language. This is a significant omission and must be included as a key factor when considering 90 days of operating budget. The exclusion of this option is also a substantive policy change. Any substantive policy change requires that it proceed through the traditional regulatory process and not through an interpretive guidance document.
  • The requirement of maintaining 90 days of sequestered cash is onerous and unreasonable. The proposed interpretation:
    • Removes millions of dollars statewide from the DD service system by requiring licensed providers to place a significant amount of resources in an untouchable “escrow” account.
    • Prevents providers from using essential amounts of money needed to maintain operational capacity (i.e. recruit and retain staff and expand program services) in a fiscal climate already negatively impacted by years of low Medicaid reimbursement rates.
    • Increases fiscal hardships such that some providers may have no option but to cease operations entirely.

 

We propose the following recommendations:

  • “Projected revenue” must continue to be included as an option for providers to meet their financial obligations for a 90-day operating budget. An organization’s financial obligations are usually based on a combination of cash on hand, including lines of credit, accounts receivable on hand, and future revenues generated in conjunction with the delivery of future services. Ignoring both future revenues and an organization’s accounts receivable imposes an unnecessary and unwarranted burden on providers.
  • Licensing staff do not have the necessary expertise in interpreting financial documents nor should we expect them to have this expertise. There are reliable alternatives to ensuring and determining an organization’s fiscal stability other than the sequestration of 90 days of operating expenses in cash or a line of credit equivalent.
    • Require a financial review or audit by an external certified accounting firm and/or an accompanying auditor’s letter stating that the auditor found the organization’s accounting standards to be compliant with U.S. generally acceptable accounting practices with no significant audit findings, that the organization has positive cash flow to sustain ongoing operations, and that the financial viability of the organization is supported with reliable and sound fiscal management.
    • Waive the requirement of a 90-day operating budget if an organization is CARF accredited or a United Way member. CARF accreditation requires strict fiscal policy and operation standards. United Way members already complete an annual audit review that includes submission of annual audits and 990’s that are reviewed by United Way for administrative costs and expense-to-income standards.
    • For not-for-profits, DBHDS can also use GuideStar to assess and research the annual audits and/or 990’s of licensed not-for-profits. GuideStar gathers, organizes and distributes information about U.S. not-for-profits in their data base.

 

DD Waiver licensed providers have a proven history as valued partners with DBHDS in the delivery of valued quality services to Virginians with disabilities. Extreme caution must be considered before moving forward with any dramatic changes in additional financial requirements of licensed providers. The proposed omission of “projected revenue” in the Guidance document alone could have dire unanticipated outcomes that could permanently damage the IDD service system as a whole.

 

Providers are willing to actively work with the DBHDS Office of Licensing to develop a satisfactory remedy to whatever problem you seek to solve regarding the fiscal responsibilities of providers.

 

 

CommentID: 75886
 

9/3/19  11:12 am
Commenter: Betsy Schatz, Langley Residential Support Services

90 day reserve
 

Langley Residential Support Services has been a non-profit service provider for individuals with developmental disabilities in Virginia for over 30 years.  We are very concerned about the Guidance Document being proposed by DBHDS Office of Licensing as a Requirement for 90 Days of Operating Expenses.

We are specifically concerned about the statement ending the first paragraph:

"Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or in a line of credit."

We agree with the Virginia Network of Private Providers (Langley is a member) that this statement does not reflect the language of the regulation for which this document purports to provide guidance:

12VAC35-105-210 states "The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis.  The amount needed shall be based on a working budget showing projected revenue and expenses."

We feel that the proposed Guidance Document ignores this important phrase - projected revenue, which for non-profit providers is a key factor.  As a non-profit, our annual operating budget is based on continuing reliable revenue streams since we cannot afford to maintain 25% of our annual working budget as a surplus or untouched cash reserve while we are simultaneously managing our revenuers to meet ongoing and unforeseen needs.

This guidance to sequester funds is an overly restrictive barrier to non-profit agencies, which are partners with DBHDS to meet the needs of citizens with developmental disabilities.

Langley agrees with the comment posted by VNPP that we do not condone providers failing to meet their legal or financial obligations, BUT we are also very concerned that a strict application of the rule as interpreted above will cause undue hardship on Langley and other service providers and could even cause some to cease operations, at the same time that providers are partnering with DBHDS to increase community services for citizens with developmental disabilities.

Thank you for this opportunity to present our comments.

CommentID: 75887
 

9/3/19  12:01 pm
Commenter: John Santoski The Arc of the Piedmont

"Comments - Requirement for 90 Days of Operating Expenses"
 

 

 

 

The Arc of the Piedmont has been operating for the past 50 years and provides day services and a variety of residential services for individuals with ID/DD.

We agree with the vaACCSES and the VNPP comments that the proposed guidance document contradicts the language in the current regulation for which the guidance seeks to interpret.

Current regulation 12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis. This amount needed shall be based on a working budget showing projected revenue and expenses.

The proposed DBHDS guidance Office of Licensing stated below exceeds the intent and spirit of the current regulation and creates a new onerous regulatory requirement.

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

This proposed regulatory requirement is a substantive policy change and therefore requires the proposed guidance interpretation go through the traditional regulatory process.

We understand and support the importance of all licensed providers to maintain their legal and financial obligations. However, applying an overly strict interpretation of the current regulation will impose an unfunded mandate and will create an undue hardship on both large and small providers.

We oppose the proposed guidance document language for the following reasons:

·       The term “projected revenue” is missing from the new language. This is a significant omission and must be included as a key factor when considering 90 days of operating budget. The exclusion of this option is also a substantive policy change. Any substantive policy change requires that it proceed through the traditional regulatory process and not through an interpretive guidance document.

·       The requirement of maintaining 90 days of sequestered cash is onerous and unreasonable. The proposed interpretation: 

o   Removes millions of dollars statewide from the DD service system by requiring licensed providers to place a significant amount of resources in an untouchable “escrow” account.

o   Prevents providers from using essential amounts of money needed to maintain operational capacity (i.e. recruit and retain staff and expand program services) in a fiscal climate already negatively impacted by years of low Medicaid reimbursement rates. 

o   Increases fiscal hardships such that some providers may have no option but to cease operations entirely.

We propose the following recommendations:

·       “Projected revenue” must continue to be included as an option for providers to meet their financial obligations for a 90-day operating budget. An organization’s financial obligations are usually based on a combination of cash on hand, including lines of credit, accounts receivable on hand, and future revenues generated in conjunction with the delivery of future services. Ignoring both future revenues and an organization’s accounts receivable imposes an unnecessary and unwarranted burden on providers.

·       Licensing staff do not have the necessary expertise in interpreting financial documents nor should we expect them to have this expertise. There are reliable alternatives to ensuring and determining an organization’s fiscal stability other than the sequestration of 90 days of operating expenses in cash or a line of credit equivalent.

o   Require a financial review or audit by an external certified accounting firm and/or an accompanying auditor’s letter stating that the auditor found the organization’s accounting standards to be compliant with U.S. generally acceptable accounting practices with no significant audit findings, that the organization has positive cash flow to sustain ongoing operations, and that the financial viability of the organization is supported with reliable and sound fiscal management.

o   Waive the requirement of a 90-day operating budget if an organization is CARF accredited or a United Way member. CARF accreditation requires strict fiscal policy and operation standards. United Way members already complete an annual audit review that includes submission of annual audits and 990’s that are reviewed by United Way for administrative costs and expense-to-income standards.

o   For not-for-profits, DBHDS can also use GuideStar to assess and research the annual audits and/or 990’s of licensed not-for-profits. GuideStar gathers, organizes and distributes information about U.S. not-for-profits in their data base.

DD Waiver licensed providers have a proven history as valued partners with DBHDS in the delivery of valued quality services to Virginians with disabilities. Extreme caution must be considered before moving forward with any dramatic changes in additional financial requirements of licensed providers. The proposed omission of “projected revenue” in the Guidance document alone could have dire unanticipated outcomes that could permanently damage the IDD service system as a whole.

Providers are willing to actively work with the DBHDS Office of Licensing to develop a satisfactory remedy to whatever problem you seek to solve regarding the fiscal responsibilities of providers.

CommentID: 75888
 

9/3/19  12:52 pm
Commenter: John Weatherspoon, Wall Residences, Inc.

Requirement for 90 Days of Operating Expenses Document Poses Risk to SR Future
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.

 

CommentID: 75890
 

9/3/19  1:02 pm
Commenter: Hattie Singleton, Wall Residences, Inc.

“Requirement for 90 Days of Operating Expenses”
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75891
 

9/3/19  1:03 pm
Commenter: Deanna Rennon, Wall Residences

Requirement for 90 Days of Operating Expenses Document could negatively impact SR providers
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.

 

CommentID: 75892
 

9/3/19  1:04 pm
Commenter: Chris Leckie-Smith, Wall Residences

90 day budget/resources
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.

 

CommentID: 75893
 

9/3/19  1:05 pm
Commenter: Amber Hall, Wall Residences

Requirement for 90 Days of Operating Expenses
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75894
 

9/3/19  1:10 pm
Commenter: Mandy Seeberger, Wall Residences

Requirement for 90 Days of Operating Expenses
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75895
 

9/3/19  1:10 pm
Commenter: Patricia Hartsock, Wall Residences

Requirement for 90 Days of Operating Expenses Document Could Pose Risk to SR Future
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75896
 

9/3/19  1:11 pm
Commenter: Emily Eagle, Walll Residences

90 day operating expenses
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75897
 

9/3/19  1:12 pm
Commenter: Brooke Keen, Wall Residences

Requirement for 90 Day Operating Expense
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75898
 

9/3/19  1:18 pm
Commenter: Amanda Craig, Wall Residences

Comment Regarding Gudiance Document Referencing Requirement for 90 Day of Operating Budget
 

In reference to the guidance document provided by the Office of Licensing the following has been noted to be areas of needed attention and updates;

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.

 

CommentID: 75899
 

9/3/19  1:21 pm
Commenter: Kira Appel, Wall Residences

In reference to guidance document related to "Requirement for 90 Days of Operating Expenses"
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.

Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.

CommentID: 75900
 

9/3/19  1:31 pm
Commenter: Candice Bowman, Wall Residences

Requirement for 90 days of operating expenses
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75901
 

9/3/19  1:32 pm
Commenter: Joey Warren, Wall Residences

Requirement for 90 days operating expenses
 

“The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Sponsors must be allowed to continue to utilize the following acceptable forms of financial resources to document proof of 90 days of operating expenses 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 4) Bank line of credit; 5) Credit card with an available balance.

 

Remove the statement from the last paragraph that states “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.”

CommentID: 75902
 

9/3/19  1:33 pm
Commenter: Jenny Taylor-Jones, Wall Residences

Requirement for 90 Days of Operating Expenses
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75903
 

9/3/19  1:34 pm
Commenter: Tabitha Bentley, Wall Residences

In reference to guidance document related to "Requirement for 90 Days of Operating Expenses"
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.

Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.

 

CommentID: 75904
 

9/3/19  1:39 pm
Commenter: WALLS RESIDENCES

“Requirement for 90 Days of Operating Expenses
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Sponsors must be allowed to continue to utilize the following acceptable forms of financial resources to document proof of 90 days of operating expenses 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 4) Bank line of credit; 5) Credit card with an available balance.

 

Remove the statement from the last paragraph that states “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.”

 

CommentID: 75906
 

9/3/19  1:41 pm
Commenter: Victoria Hitchcock, Wall Residences

Requirement for 90 Days of Operating Expenses
 

“The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Sponsors must be allowed to continue to utilize the following acceptable forms of financial resources to document proof of 90 days of operating expenses 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 4) Bank line of credit; 5) Credit card with an available balance.

 

This is not asked of any other service line and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.”

CommentID: 75907
 

9/3/19  1:45 pm
Commenter: Joanne Orchant Aceto, MVLE

Requirement for 90 Days of Operating Expenses
 

MVLE has been in business since 1971, providing community-based employment and therapeutic support services for individuals with disabilities and other barriers.

We agree with the vaACCSES and the VNPP comments that the proposed guidance document contradicts the language in the current regulation for which the guidance seeks to interpret.

 

Current regulation 12VAC35-105-210 states “The provider shall document financial arrangements or a line of credit that are adequate to ensure maintenance of ongoing operations for at least 90 days on an ongoing basis. This amount needed shall be based on a working budget showing projected revenue and expenses.”

The proposed DBHDS guidance Office of Licensing stated below exceeds the intent and spirit of the current regulation and creates a new onerous regulatory requirement.

“Therefore, both applicants for licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in cash or a line of credit.”

 

This proposed regulatory requirement is a substantive policy change and therefore requires the proposed guidance interpretation go through the traditional regulatory process.

We understand and support the importance of all licensed providers to maintain their legal and financial obligations. However, applying an overly strict interpretation of the current regulation will impose an unfunded mandate and will create an undue hardship on both large and small providers.

 

We oppose the proposed guidance document language for the following reasons:

  • The term “projected revenue” is missing from the new language. This is a significant omission and must be included as a key factor when considering 90 days of operating budget. The exclusion of this option is also a substantive policy change. Any substantive policy change requires that it proceed through the traditional regulatory process and not through an interpretive guidance document.
  • The requirement of maintaining 90 days of sequestered cash is onerous and unreasonable. The proposed interpretation:
    • Removes millions of dollars statewide from the DD service system by requiring licensed providers to place a significant amount of resources in an untouchable “escrow” account.
    • Prevents providers from using essential amounts of money needed to maintain operational capacity (i.e. recruit and retain staff and expand program services) in a fiscal climate already negatively impacted by years of low Medicaid reimbursement rates.
    • Increases fiscal hardships such that some providers may have no option but to cease operations entirely.

 

We propose the following recommendations:

  • “Projected revenue” must continue to be included as an option for providers to meet their financial obligations for a 90-day operating budget. An organization’s financial obligations are usually based on a combination of cash on hand, including lines of credit, accounts receivable on hand, and future revenues generated in conjunction with the delivery of future services. Ignoring both future revenues and an organization’s accounts receivable imposes an unnecessary and unwarranted burden on providers.
  • Licensing staff do not have the necessary expertise in interpreting financial documents nor should we expect them to have this expertise. There are reliable alternatives to ensuring and determining an organization’s fiscal stability other than the sequestration of 90 days of operating expenses in cash or a line of credit equivalent.
    • Require a financial review or audit by an external certified accounting firm and/or an accompanying auditor’s letter stating that the auditor found the organization’s accounting standards to be compliant with U.S. generally acceptable accounting practices with no significant audit findings, that the organization has positive cash flow to sustain ongoing operations, and that the financial viability of the organization is supported with reliable and sound fiscal management.
    • Waive the requirement of a 90-day operating budget if an organization is CARF accredited or a United Way member. CARF accreditation requires strict fiscal policy and operation standards. United Way members already complete an annual audit review that includes submission of annual audits and 990’s that are reviewed by United Way for administrative costs and expense-to-income standards.
    • For not-for-profits, DBHDS can also use GuideStar to assess and research the annual audits and/or 990’s of licensed not-for-profits. GuideStar gathers, organizes and distributes information about U.S. not-for-profits in their data base.

 

DD Waiver licensed providers have a proven history as valued partners with DBHDS in the delivery of valued quality services to Virginians with disabilities. Extreme caution must be considered before moving forward with any dramatic changes in additional financial requirements of licensed providers. The proposed omission of “projected revenue” in the Guidance document alone could have dire unanticipated outcomes that could permanently damage the IDD service system as a whole.

 

Providers are willing to actively work with the DBHDS Office of Licensing to develop a satisfactory remedy to whatever problem you seek to solve regarding the fiscal responsibilities of providers.

CommentID: 75908
 

9/3/19  1:50 pm
Commenter: Julie P. Neal, Wall Residences

Clarification of language to minimize varied interpretations
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.

Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.

CommentID: 75909
 

9/3/19  1:50 pm
Commenter: Candace Carey, Wall Residences

Requirement for 90 Days of Operating Expenses
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75910
 

9/3/19  1:51 pm
Commenter: Susan Keenan, Community Living Alternatives

Requirements for 90 Days of Operating Expenses
 

Community Living Alternatives has been providing housing and supports to individuals with Developmental and Intellectual Disabilities for over 30 years.  As a non-profit agency meeting rigorous requirements of both the Department of Behavioral Health and Disability Services and generally accepted accounting and auditing standards, we fully support the expectation for providers to be fiscally responsible.  However, we find the requirements proposed in the Guidance Document “Requirements for 90 Days of Operating Expenses” to be unreasonable. 

Specifically we are concerned with the statement in the guidance document:  “Therefore, both applicants of licensure and licensed providers must be able to provide proof, at any time when requested by a representative from the department, that they have sufficient funds for 90 days of operating expenses, whether in case or a line of credit.”  This language omits the inclusion of “projected income” in the original regulation and presents an unrealistic expectation of providers which ultimately has the potential to negatively impact individuals.   

With current Medicaid rates already inadequate to provide the level of care necessary for many individuals supported, it is difficult, if not impossible to generate enough funds to create 90 days of reserves, especially without including any forecasted revenues.  Having such a significant requirement creates an additional hindrance for providers who are already facing a significant staffing crisis while we must keep additional funding sitting idly on hand instead of using it to make improvements or enhance the supports we could provide. 

CLA agrees with and supports the comments made by VNPP regarding this guidance document. Thank you for the opportunity to provide our comments on this matter.

CommentID: 75911
 

9/3/19  1:51 pm
Commenter: Carole F. Anderson Brubaker Licensed Provider

Requirements for 90 Days of Operating Expenses
 

"The guidance document related to "Requirement for 90 Days of Operating Expenses" is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. Some of the language within the documents poses a risk for future of Sponsored Residential Services and needs changed. 

Sponsors must be allowed to continue to utilize the following acceptable forms of financial resources to document proof of 90 days of operating expenses. 

1) Personal or business savings accounts. 2) Personal or business checking account.

3) Home equity line of credit 4). Bank line of credit. 5) Credit card with an available balance.

Remove the statement from the last paragraph that states "in order to meet regulatory requirements, theses resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited. "  This is not asked of any other service line that we are aware of this and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor".  

Thank you,

Carole F. Anderson Brubaker

CommentID: 75912
 

9/3/19  1:55 pm
Commenter: Brandelin Stanfill

90 day resource requirement
 

 

“The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Sponsors must be allowed to continue to utilize the following acceptable forms of financial resources to document proof of 90 days of operating expenses 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 4) Bank line of credit; 5) Credit card with an available balance.

 

Remove the statement from the last paragraph that states “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.”

 

CommentID: 75913
 

9/3/19  1:57 pm
Commenter: Katrina Samuels, Wall Residences

Requirements for 90 Day Operating Budget
 

“The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Sponsors must be allowed to continue to utilize the following acceptable forms of financial resources to document proof of 90 days of operating expenses 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 4) Bank line of credit; 5) Credit card with an available balance.

 

Remove the statement from the last paragraph that states “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.”

CommentID: 75914
 

9/3/19  1:59 pm
Commenter: Rebecca Ledingham, Wall Residences

90 day operating budget for sponsored residential services
 

The guidance document related to “Requirement for 90 Days of Operating Expenses” is written in such a way that it will produce differences in interpretation across the state for licensing specialists responsible for licensing new sponsored homes or when renewing Sponsored Residential Providers. The matter of “90 Days of Resources” has been an issue we have dealt with in the past with previous Directors of Licensing and we thought we had come to resolution. If we move forward with this document as guidance there will be varying interpretations of what is written by future Directors of Licensing and new licensing specialists. Some of the language within the document poses a risk to the future of Sponsored Residential Services and needs changed.

 

Paragraph 2: For all licensed services other than sponsored residential services, the line of credit should be in the provider’s or owner’s name.

This can be interpreted in different ways in relation to sponsored services.

  1. Sponsored Residential Services (the sponsor homes themselves) can utilize a line of credit to cover 90 days. The licensed provider agency should not be who holds the line of credit for the specific sponsor home or be on that specific line of credit. This was the understanding we had with previous licensing directors.
  2. An unintended interpretation could be that Sponsored Residential Providers (the agency itself) is not allowed to use a line of credit to cover 90 days of operating expenses. Sponsored Agencies have always been able to utilize a line of credit and the document needs to indicate this practice can continue.

Paragraph 3: The following forms of financial resources are acceptable to document proof of 90 days of operating expenses for all non-sponsored residential providers: 1) Personal or business savings account; 2) Personal or business checking account; 3) Home equity line of credit; 3) (typo from the memo) Bank line of credit; 4) Credit card with an available balance.

  1. Remove “for all non-sponsored residential providers”. Sponsored residential providers (Agencies and the Sponsor Homes) have historically been allowed to utilize these same forms of financial resources. This could be misinterpreted by future Directors and Licensing Specialists. This was worked out with the previous Director(s) of Licensing who sat down with sponsored providers to review this when some newer licensing specialists a few years ago attempted to deny use of these forms of proof of 90 days of operating expenses.

Paragraph 5: This means that the sponsors themselves, and not the sponsor’s employer, must have at all times the financial resources to cover their own mortgage or rent, utilities, dining expenses, etc., for 90 days independent of payments received for residents living in the home. In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.

  1. We must add “must have at all time the financial resources utilizing the forms of acceptable financial resources outlined above in paragraph two to cover their expenses for 90 days independent of payments received for residents living in the home.” If this is not added a licensing specialist could interpret this to mean the only acceptable resource for a sponsored home is 90 days of cash in a separate account.
  2. Remove “In order to meet regulatory requirements, these resources must be kept in separate accounts from which personal daily operating expenses are withdrawn or from which payments received for residents living in the home are deposited.” This is not asked of any other service line that we are aware of and this is not outlined anywhere in regulations for sponsored services. This puts an additional burden on the sponsor.
CommentID: 75915