Current through Reg. 49, No. 38; September 20, 2024
(a) Effective
December 1, 2008, minimum standards of financial condition require the
applicant or license holder to have sufficient financial resources to:
(1) satisfy obligations at the time they come
due; and
(2) ensure at all times
the delivery of essential care and services, such as nursing or dietary
services, or utilities.
(b) A license holder must notify DADS of
significant adverse changes in financial condition, which include changes in
financial position, cash flow, results of operation, or other events that could
adversely affect the delivery of essential care and services, such as nursing
or dietary services, or utilities. The following are examples of significant
adverse changes in financial condition that must be reported:
(1) The license holder, operator,
administrator, manager, or other controlling person receives notice that a
judgment or tax lien of at least $50,000 has been filed, recorded, or levied
against the facility or any of the assets of the facility or the license holder
and the judgment or tax lien is not satisfied, or an appropriate extension has
not been obtained, within three working days after receipt of the
notice.
(2) A financial institution
refuses to honor facility-operation-related checks or other financial
instruments issued by the license holder, operator, administrator, manager, or
other controlling person or agent of the license holder, operator,
administrator, manager, or other controlling person and:
(A) the cumulative amounts of the checks or
financial instruments are $50,000 or more; and
(B) the checks or financial instruments are
not honored or replaced to the satisfaction of the holders of the instruments
within five working days after the holders have notified the license holder,
operator, administrator, manager, or the person authorized to issue the
instrument of the dishonored items.
(3) The facility fails to maintain the
facility's utilities or a sufficient quantity of supplies, including nursing,
dietary, pharmaceutical, or other care and service supplies, to meet the needs
of the residents.
(4) The license
holder, operator, administrator, manager, or other controlling person fails to
make timely payments of any facility-related tax of at least $10,000 and fails
to satisfy such tax within five working days after the date the tax becomes
due.
(5) The license holder,
operator, administrator, manager, or other controlling person files a voluntary
bankruptcy petition, or a creditor files an involuntary bankruptcy petition
against the license holder or controlling person, under the United States Code
or any other laws of the United States.
(6) A court appoints a bankruptcy trustee for
the facility.
(7) A person seeking
appointment of a receiver for the facility files a petition in any
jurisdiction.
(8) The license
holder, operator, administrator, manager, or other controlling person is unable
to meet conditions of a facility-operation-related loan or debt covenant unless
the loan or debt covenant has been waived, and that inability leads to:
(A) the imposition of a fine or
penalty;
(B)
restructuring;
(C) a change in
terms or conditions of the loan or debt covenant; or
(D) a recall by the issuing entity.
(9) The license holder, operator,
administrator, manager, or other controlling person is delinquent on more than
$50,000 of facility-related contractual obligations or vendor contracts and has
not cured the delinquency within five working days after receipt of notice from
the creditor or creditors to pay the debt.
(c) The license holder must notify DADS in
writing of a significant adverse change in its financial condition as required
by subsection (b) of this section within 72 hours after the license holder
becomes aware of or should have become aware of the change.
(d) The license holder's notice required by
subsection (b) of this section must include a description of:
(1) the specific significant adverse change
in financial condition;
(2) how the
significant adverse change in financial condition affects the license holder's
ability to deliver essential care and services; and
(3) the actions the license holder has taken
to address the significant adverse change in financial condition.
(e) The license holder must fax
the notice required in subsection (b) of this section to (512) 438-2730 or
(512) 438-2728, and the notice must be kept on file with a copy of the fax
confirmation.
(f) The license
holder must provide any other information DADS requests to substantiate
continued compliance with the requirements of this section within 30 days after
the request.
