“Requirement for 90 days of operating expenses.”
12VAC35-105-40 requires that providers must submit the following when applying for a license:
2. Documentation of working capital to include:
a. Funds or a line of credit sufficient to cover at least 90 days of operating expenses if the provider is a corporation, unincorporated organization or association, a sole proprietor, or a partnership…
In addition, regulation 12VAC35-105-210.A. states that licensed providers 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.”
With these requirements, licensed providers must be able to demonstrate at any time compliance with these requirements. That being said, the ICOS is concerned the interpretation provided in the draft guidance document creates a number of challenges for providers.
In addition, we have questions regarding a number of other related items that will be important to clarify before proceeding. This includes:
While the ICOS does not condone providers failing to meet their legal or financial obligations, we urge DBHDS to reconsider the interpretation of this regulation so that these significant concerns can be addressed. Further, the ICOS is more than willing to work with the Office of Licensing to help them to utilize existing tools or develop new ones if necessary to help ensure providers are operating in a fiscally responsible manner.
Thank you for your consideration of the ICOS’s perspective on this important issue.