Caliber Virginia, formerly known as the Association for Community-Based Service Providers (ACBP), was established in 2006 to provide support, resources and information with a united, well informed and engaged voice among the community-based behavioral and mental health service providers of the Commonwealth. Caliber Virginia promotes equal opportunity, economic empowerment, independent living, and political participation for people with disabilities including mental health diagnoses. Our members, including behavioral health providers, community based private service providers, people with disabilities and their family, friends, and supporters, represent a powerful force for change.
The behavioral health field has changed and grown dramatically since the Association was founded in 2006. The need for a united voice among community-based service providers, and to ensure our ability to provide quality services to individuals in our communities remain unaffected by regulatory or legislative changes are imperative. This is critical to the well-being of individuals in our communities. To this end, Caliber Virginia has significant concerns that the proposed interpretation of the guidance document "“Requirement for 90 days of operating expenses” 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:
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.
onerous and unreasonable. The proposed interpretation:
requiring licensed providers to place a significant amount of resources in an untouchable “escrow” account.
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.
but to cease operations entirely.
We propose the following recommendations:
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.
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.
CARF and/or nationally accredited , or a United Way member. CARF and/or national 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.
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.
Caliber Virginia 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 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.
Respectfully,
Kim Hutchinson, PhD, MBA
Executive Director
Caliber Virginia
Mobile: (804)405-3288
kim.hutchinson@calibervirginia.com