2 CCR 502-1-12.6 - Procedures for Approval and BHA Oversight

12.6.1 Initial Approval

A. Applicants seeking approval as a behavioral health safety net provider will be approved in accordance with the requirements set forth in this section.

B. The applicant shall initially notify the BHA of their intent to seek approval by submitting a letter of intent. The letter of intent must indicate the provider's intent to seek approval as an essential behavioral health safety net provider and/or comprehensive community behavioral health provider as well as the services the provider intends to provide.

C. The applicant shall provide the BHA with a complete application including all information and attachments specified in the application form available to access on the BHA's website and any additional information requested by the BHA.

1. An application may be considered abandoned if the applicant fails to complete the application within twelve (12) months and fails to respond to the BHA. The BHA may administratively close the application process.

2. After an administrative closure, the applicant may file a new application.

D. With the submission of an application for approval as a behavioral health safety net provider, or within ten (10) days after a change in ownership or management of a behavioral health safety net provider, each owner and manager shall submit a complete set of the owner's and manager's fingerprints to the Colorado Bureau of Investigation (CBI) for the purpose of conducting a fingerprint-based criminal history record check. The CBI shall forward the fingerprints to the Federal Bureau of Investigation (FBI) for the purpose of conducting fingerprint-based criminal history record checks. Each owner and each manager shall pay the CBI the costs associated with the fingerprint-based criminal history record check. Upon completion of the criminal history record check, the CBI shall forward the results to the BHA. The BHA may acquire a name-based criminal history record check for an applicant who has twice submitted to a fingerprint-based criminal history record check and whose fingerprints are unclassifiable.

1. An entity that holds a current license to operate from the BHA or CDPHE, and/or is currently recognized as a federally qualified health center are exempt from this requirement.

E. The applicant shall provide the following information:

1. Evidence of current licensure in good standing by the Department of Public Health and Environment, Department of Regulatory Agencies, Department of Human Services, or other state agency where applicable, unless otherwise exempt from licensing per applicable state or federal rule or statute.

a. For applicants, including but not limited to federally qualified health centers, that are exempt from licensure but require federal recognition, the applicant shall provide documentation to demonstrate current recognition.

b. Applicants with an existing license from the BHA shall indicate their licensure status within the application. Evidence of licensure by the BHA does not need to be provided by the applicant for approval.

2. The legal name of the applicant and all other names used by it to provide services. The applicant has a continuing duty to submit notification to the BHA for all name changes at least thirty (30) calendar days prior to the effective date of the change.

3. Contact information for the applicant must include a mailing address, telephone number, and e-mail address. If applicable, the applicant's website and facsimile number are to be provided.

4. The identity, address, and telephone number of all persons and business entities with a controlling interest in the applicant, including but not limited to:

a. A non-profit corporation shall list the governing body and officers.

b. A for-profit corporation shall list the names of the officers and stockholders who directly or indirectly own or control five (5) percent or more of the shares of the corporation.

c. A sole proprietor shall include proof of lawful presence in the United States.

d. A partnership shall list the names of all partners.

e. The chief executive officer of the facility or agency.

f. If the addresses and telephone numbers provided above are the same as the contact information for the applicant itself, the applicant shall also provide an alternate address and telephone number for at least one individual for use in the event of an emergency or closure.

5. Proof of professional liability insurance. Behavioral health safety net providers must maintain such coverage for the duration of the approval term and must notify the BHA of any change in the amount, type, or provider of professional liability insurance coverage during the license term.

6. Articles of incorporation, Articles of organization, partnership agreement, or other organizing documents required by the secretary of state to conduct business in Colorado; and by-laws or equivalent documents that govern the rights, duties, and capital contributions of the business entity.

7. The address(es) of the physical location where services are delivered, as well as, if different, where records are stored for BHA review.

8. A copy of any management agreement pertaining to operation of the entity that sets forth the financial and administrative responsibilities of each party.

9. If an applicant leases one (1) or more building(s) to operate under the approval, a copy of the lease or leases must be filed with the license application and show clearly in its context which party to the agreement is to be held responsible for the physical condition of the property.

10. A statement, on the applicant's letterhead, if available, signed and dated, submitted with the application stating whether any of the actions listed in this part 12.6.1.E.10 of these rules have occurred, regardless of whether the action has been stayed in a judicial appeal or otherwise settled between the parties. The actions are to be reported if they occurred within ten (10) years preceding the date of the application for initial approval. The BHA may, based upon information received in the statement, request additional information from the applicant beyond the ten-year (10) time frame.

a. For initial approval as a behavioral health safety net provider, whether one (1) or more individuals or entities identified in the response to part 12.6.1.E.4 has a controlling or ownership interest in the business entity and has been the subject or party to any of the following:

(1) A civil judgment or criminal conviction resulting from conduct or an offense in the operation, management, or ownership of an agency or other entity related to substandard care or health care fraud. A guilty verdict, a plea of guilty, or a plea of nolo contendere (no contest) accepted by the court is considered a conviction.

(2) A disciplinary action imposed by a governmental entity in another state that registers or licenses agencies including but not limited to: a sanction, probation, civil penalty, or a denial, suspension, revocation, or modification of a license or registration.

(3) Limitation, denial, revocation, or suspension by any federal, state, or local authorities of any health care related license.

(4) The refusal to grant or renew a license for operation of an agency, or contract for participation or certification for Medicaid, Medicare, or other public health or social services payment program.

b. For a change of ownership of an agency, whether any of the new owners have been the subject of, or a party to, one (1) of more of the following events:

(1) A civil judgment or a criminal conviction in a case brought by the federal, state, or local authorities that resulted from the operation, management, or ownership of an agency or other entity related to substandard care or health care fraud.

(2) Limitation, denial, revocation, or suspension of a state license or federal certification by another jurisdiction.

11. Any statement regarding the information requested in part 12.6.1.E.10 of this Chapter must include the following, as applicable:

a. If the event is an action by a governmental agency, as described in part 12.6.1.E.10.b: the name of the agency, its jurisdiction, the case name, and the docket proceeding or case number by which the event is designated, and a copy of the consent decree, order, or decision.

b. If the event is a felony conviction or misdemeanor involving moral turpitude: the court, its jurisdiction, the case name, the case number, a description of the matter or a copy of the indictment or charges, and any plea or verdict entered by the court. For the purposes of this rule, "crimes of moral turpitude" include the following felony, misdemeanor, or municipal offenses or equivalent out-of-state or federal offenses:

(1) Any of the offenses against the person set forth in Article 3 of Title 18 of the Colorado Revised Statutes. Examples of such offenses include, but are not limited to, any assault, menacing, or unlawful sexual behavior;

(2) Any of the offenses against property set forth in Article 4 of Title 18 of the Colorado Revised Statutes. Examples of such offenses include, but are not limited to, any arson, theft, trespass, or criminal mischief;

(3) Any of the offenses involving fraud set forth in Article 5 of Title 18 of the Colorado Revised Statutes;

(4) Computer crime as set forth in Article 5.5 of Title 18 of the Colorado Revised Statutes;

(5) Any of the offenses involving the family relations set forth in Article 6, Part 4 (wrongs to children), when committed intentionally and knowingly or recklessly; Part 6 (harboring a minor); or Part 8 (domestic violence) of Title 18 of the Colorado Revised Statutes;

(6) Any of the offenses constituting wrongs to at-risk adults set forth in, Article 6.5 of Title 18 of the Colorado Revised Statutes;

(7) Any of the offenses relating to morals set forth in Article 7 of Title 18 of the Colorado Revised Statutes. Examples of such offenses include, but are not limited to, prostitution, indecent exposure, and criminal invasion of privacy;

(8) Any other offense in any jurisdiction whatsoever that is committed intentionally, knowingly, or recklessly, and involves violence, coercion, threats, cruelty, fraud, deception, or deprivation of legally recognized rights; and,

(9) Any conspiracy, solicitation, or criminal attempt to commit any of the above offenses, or participation as an accessory to any of the above offenses.

c. If the event is a civil action or arbitration proceeding: the court or arbiter, the jurisdiction, the case name, the case number, a description of the matter or a copy of the complaint, and a copy of the verdict of the court or arbitration decision.

F. The BHA will not issue or renew an approval unless it has received a certificate of compliance for each physical location where services are provided.

G. Each application must be signed under penalty of perjury by an authorized corporate officer, general partner, or sole proprietor of the agency as appropriate.

H. The BHA shall conduct a preliminary assessment of the application and notify the applicant of any application defects.

1. The applicant shall respond within fourteen (14) calendar days to written notice of any application defect.

I. The BHA will provide written notice to the applicant within thirty (30) calendar days of receipt of a complete application.

J. The BHA will act on an application within ninety (90) calendar days of receipt of the completed application.

K. The duration of the initial approval will be two (2) years from the date of issuance.

1. The BHA may conduct annual inspections during the two (2) year approval duration, in addition to any other inspections indicated in section 12.6.6.G.

12.6.2 Provisional Approval

A. Where an applicant for an initial approval fails to fully conform to the applicable statutes and regulations but the BHA determines the applicant is in substantial compliance with these rules and regulations and is temporarily unable to conform to all the minimum standards, a provisional approval may be granted. No provisional approval may be issued to an applicant if the operations may adversely affect individual health, safety, or welfare.

1. A provisional approval will be valid for ninety (90) days.

2. A second provisional approval, for another ninety (90) days, may be issued if the BHA determines that it is likely that compliance can be achieved by the date of expiration of the second provisional approval.

3. The second provisional approval may be issued for the same duration as the first. The BHA may not issue a third or subsequent provisional approval to the entity.

4. During the term of the provisional approval, the BHA shall conduct any review it deems necessary to determine if the agency meets the requirements for a regular approval.

5. If the BHA determines, prior to expiration of the provisional approval, that the agency is in compliance with all applicable rules, it may issue a regular approval. The regular approval will be valid for one (1) year from the date of issuance of the regular approval, unless otherwise acted upon pursuant to part 12.7 of this Chapter.

12.6.3 Renewal of Approval

A. An agency seeking renewal must provide the BHA with a renewal application, signed under penalty of perjury by an authorized corporate officer, general partner, or sole proprietor of the agency as appropriate at least sixty (60) calendar days prior to the expiration of the existing approval. Renewal applications shall contain the information required in part 12.6.1.E of this Chapter unless the information has been previously submitted and no changes have been made to the information currently held by the BHA.

B. Failure of the agency to accurately answer or report any of the information requested by the BHA will be considered good cause to deny the renewal application.

C. The BHA shall conduct a preliminary assessment of the renewal application and notify the agency of any application defects.

1. The agency shall respond within fourteen (14) calendar days to written notice of any application defect.

D. The duration of the renewal approval will be two (2) years from the date of issuance.

1. The BHA may conduct annual inspections during the two (2) year approval duration, in addition to any other inspections indicated in section 12.6.6.G.

12.6.4 Change of Ownership/Management

A. If an agency undergoes a change in ownership without following the procedures outlined in this part 12.6.4, their existing approval will be terminated. Termination of the approval may not occur until after a hearing and in compliance with the provisions and procedures specified in Section 24-4-101 through -109, C.R.S.

B. When an agency initiates a change of ownership, the agency must submit notification to inform the BHA of the change.

C. Each agency undergoing a change of ownership shall submit an application, as prescribed in part 12.6.1 of this Chapter at least thirty (30) calendar days before a change of ownership.

1. The application must include supporting documentation for change of ownership.

D. The BHA will consider the following criteria in determining whether there is a change of ownership of an agency that requires a new approval. The transfer of fifty percent (50%) of the ownership interest referred to in this part 12.6.4.D may occur during the course of one (1) transaction or during a series of transactions occurring over a five (5) year period.

1. Sole proprietors:

a. The transfer of at least fifty percent (50%) of the ownership interest in an agency from a sole proprietor to another individual, whether or not the transaction affects the Title to real property, shall be considered a change of ownership.

b. Change of ownership does not include forming a corporation from the sole proprietorship with the proprietor as the sole shareholder or forming a limited liability company from sole proprietorship.

2. Partnerships:

a. Dissolution of the partnership and conversion into any other legal structure shall be considered a change of ownership if the conversion also includes a transfer of at least fifty percent (50%) of the ownership to one (1) or more new owners.

b. Change of ownership does not include dissolution of the partnership to form a corporation with the same persons retaining ownership in the new corporation.

3. Corporations:

a. Merger of two (2) or more corporations resulting in the creation of a new corporate entity will be considered a change of ownership if the consolidation includes a transfer of at least fifty percent (50%) of the ownership to one or more new owners.

b. Formation of a corporation from a partnership, a sole proprietorship, or a limited liability company will be considered a change of ownership if the change includes a transfer of at least fifty percent (50%) of the ownership to one (1) or more new owners.

c. The transfer, purchase, or sale of shares in the corporation such that at least fifty percent (50%) of the ownership of the corporation is shifted to one (1) or more new owners will be considered a change of ownership.

4. Limited liability companies:

a. The transfer of at least fifty percent (50%) of the ownership interest in the company will be considered a change of ownership.

b. The termination or dissolution of the company and the conversion thereof into any other entity will be considered a change of ownership if the conversion also includes a transfer of at least fifty percent (50%) of the ownership to one (1) or more new owners.

c. Change of ownership does not include transfers of ownership interest between existing members if the transaction does not involve the acquisition of ownership interest by a new member. For the purposes of this part.

5. Non-profits:

a. The transfer of at least fifty percent (50%) of the controlling interest in the nonprofit is considered a change of ownership.

6. Management contracts, leases, or other operational arrangements:

a. If the agency enters into a lease arrangement or management agreement whereby the owner retains no authority or responsibility for the operation and management of the agency, the action will be considered a change of ownership that requires a new approval.

7. Legal structures:

a. The conversion of an agency's legal structure, or the legal structure of a business entity that has an ownership interest in the agency is a change of ownership if the conversion also includes a transfer of at least fifty percent (50%) of the agency's ownership interest to one (1) or more new owners.

E. The existing agency is responsible for correcting all rule violations and deficiencies in any current plan of action before the change of ownership becomes effective. In the event that such corrective actions cannot be accomplished in the time frame specified, the prospective agency shall be responsible for all uncorrected rule violations and deficiencies including any current plan of action submitted by the previous agency unless the prospective agency submits a revised plan of action, approved by the BHA, before the change of ownership becomes effective.

F. When the BHA issues an approval to the new owner, the previous owner must return its approval to the BHA within five (5) calendar days of the new owner's receipt of its approval.

12.6.5 Rule Waivers

A. Any agency or applicant that has applied for or been approved as a behavioral health safety net provider has the right to apply for a waiver of any rule or standard set forth in these rules which, in their opinion, poses an undue hardship on the applicant, agency, or community.

B. Nothing contained in these provisions abrogates the agency's obligation to meet minimum requirements under local safety, fire, electrical, building, zoning, and similar codes.

C. Nothing herein authorizes a waiver of any statutory requirement under state or federal law, except to the extent permitted therein.

D. Upon application to the BHA, a waiver may be granted in accordance with this part 12.6.5. Absent the existence of a current waiver issued pursuant to this part, behavioral health safety net providers are expected to comply at all times with all applicable regulations except in instances where they are granted a provisional approval in accordance with part 12.6.2 of this Chapter.

E. Waiver applications must be submitted to the BHA in writing.

1. The BHA will only consider one (1) regulation per waiver application.

2. The waiver application must provide the BHA information related to:

a. The regulation the agency or applicant is requesting to waive;

b. The reason why the waiver is being requested;

c. A proposed alternate compliance plan;

d. Any other information relevant to the waiver request that would inform the BHA's decision in either granting or denying the waiver.

3. The waiver application must be signed by an authorized representative of the agency or applicant, who is the primary contact person and the person responsible for ensuring that accurate and complete information is provided to the BHA.

F. In making its determination, the BHA may consider any information it deems relevant, including but not limited to:

1. Critical incident and complaint investigation reports, licensure or certification survey reports, anticipated impact of the waiver on individual safety and quality of care if any, and findings of these reports related to the agency and/or the operator or owner thereof.

2. When determining whether a waiver should be granted, the BHA shall prioritize the impact of the waiver on the health, safety, and welfare of individuals over any alleged undue hardship.

G. The BHA shall act on a waiver application within ninety (90) calendar days of receipt of the completed application. An application will not be deemed complete until the applicant has provided all information and documentation requested by the BHA.

H. The BHA may specify terms and conditions under which any waiver is granted, including which terms and conditions must be met in order for the waiver to remain effective. The term for which each waiver granted will remain effective must be specified at the time of issuance but may not exceed the term of the current approval.

1. At any time, upon reasonable cause, the BHA may inspect an agency with an active waiver to ensure that the terms and conditions of the waiver are being observed, and/or that the continued existence of the waiver is otherwise appropriate.

2. Within thirty (30) calendar days of the termination, expiration, or revocation of a waiver, the agency shall submit to the BHA an attestation of compliance with the regulation to which the waiver pertained.

I. The BHA will institute termination of a waiver upon a change of ownership of the agency, as defined in part 12.7.4. However, to prevent such termination, the prospective new owner may submit a waiver application to the BHA prior to the effective date of the change of ownership. Provided the BHA receives the new application by prior to the effective date of the change of ownership, the waiver will be deemed to remain effective until such time as the BHA acts on the application. Termination of the waiver may not occur until after a hearing and in compliance with the provisions and procedures specified in Section 24-4-101 through -109, C.R.S.

1. Except as otherwise provided in this part 12.6.5, a waiver may not be granted for a term that exceeds the current approval term.

2. If an agency wishes to maintain a waiver beyond the stated term, it must submit a new waiver application to the BHA not less than ninety (90) calendar days prior to the expiration of the current term of the waiver or with an approval renewal.

J. Notwithstanding anything in this part 12.6.5 to the contrary, the BHA may revoke a waiver if it determines that:

1. The waiver's continuation jeopardizes the health, safety, or welfare of individuals served by the agency;

2. The waiver application contained false or misleading information;

3. The terms and conditions of the waiver have not been complied with;

4. The conditions under which a waiver was granted no longer exist or have changed materially; or,

5. A change in a federal or state statute or regulation prohibits, or is inconsistent with, the continuation of the waiver.

K. Notice of the revocation of a waiver must be provided to the agency in accordance with the Colorado Administrative Procedures Act and will not be effective until after a hearing in compliance with the provisions and procedures specified in Section 24-4-101 through -109, C.R.S.

12.6.6 Continuing Obligations and BHA Oversight

A. Each agency must have and maintain electronic business communication tools, including but not limited to, internet access and a valid e-mail address. The agency must use these tools to receive and submit information.

B. The approval is only valid while in the possession of the agency to whom it is issued and may not be subject to sale, assignment, or other transfer, voluntary or involuntary.

C. The agency must provide accurate and truthful information to the BHA during inspections, investigations, applications, and oversight activities.

D. When an agency is subject to inspection, certification, or review by other agencies, accrediting organizations, or inspecting companies, the agency shall provide and/or release to the BHA, upon request, any correspondence, reports, or recommendations concerning the agency that were prepared by such organizations.

E. Each agency must submit notification to the BHA regarding any change in the information required by part 12.6.1.E of this Chapter from what was contained in the last submitted approval application.

1. Changes to the operation of the agency may not be implemented without prior approval from the BHA. An agency shall, at least thirty (30) calendar days in advance, submit notification to the BHA regarding any of the following proposed changes.

a. Change in license category or classification.

b. Change in the scope of services, including the addition or removal of an endorsement, a service, or a physical location.

c. Change in legal name of the agency and all other names used by it to provide services.

F. The BHA and any duly authorized representatives thereof have the right to enter upon and into the premises of any approved agency or applicant for an agency approval in order to determine the state of compliance with the statutes and regulations and must initially identify themselves to the person in charge of the agency at the time.

G. The BHA may use the following measures to ensure an agency's full compliance with the applicable statutory and regulatory criteria.

1. The BHA may conduct an unscheduled or unannounced review of a current agency based upon, but not limited to, the following criteria:

a. Routine compliance inspection,

b. Reason exists to question the agency's continued fitness to conduct or maintain operations in accordance with the approval requirements,

c. A complaint alleging non-compliance with approval requirements,

d. Discovery of previously undisclosed information regarding an agency or any of its owners, officers, managers, or other employees if such information affects or has the potential to affect the agency's provision of services, or

e. The omission of relevant information from documents requested by the BHA or indication of false information submitted to the BHA.

2. Plan of action

a. If after review or pursuant to a complaint, it is determined that an agency is not in compliance with these rules, the agency shall be notified in writing, within thirty (30) business days of the specific deficiency/deficiencies.

b. After any review, the BHA may request a plan of action from an agency or require an agency's compliance with a BHA directed plan of action.

c. If the agency does not agree with any or all of the findings regarding non-compliance, the agency has ten (10) business days from the receipt of non-compliance notice to dispute the findings by submitting evidence to the BHA.

d. The agency shall receive a written response within thirty (30) business days of the review of submitted evidence.

e. If the submitted information is sufficient, the agency shall be determined in compliance with these rules.

f. If the agency continues to be found out of compliance with these rules, the agency shall have thirty (30) business days from the date of receipt of the review findings to submit a plan of action.

g. The plan of action must be in the format prescribed by the BHA and included, but not be limited to, the following:

(1) A description of how the agency will correct each identified deficiency.

(a) If deficient practice was cited for specific personnel, the description shall include the measures that will be put in place or systemic changes made to ensure that the deficient practice will not reoccur for the affected individuals and/or other individuals having the potential to be affected.

(2) A description of how the agency will monitor the corrective action to ensure each deficiency is remedied and will not reoccur, and

(3) A completion date that is no later than ninety (90) calendar days from the issuance of the deficiency list, unless otherwise required or approved by the BHA. The completion date is the date that the entity deems it can achieve compliance.

h. A completed plan of action must be:

(1) Signed by the agency's director, administrator, or manager, and

(2) Submitted to the BHA within thirty (30) calendar days after the date of the BHA's written notice of deficiencies.

(a) If an extension of time is needed to complete the plan of action, the agency shall request an extension in writing from the BHA prior to the plan of action due date. The BHA may grant an extension of time.

i. The BHA has discretion to approve, impose, modify, or reject a plan of action.

(1) If the plan of action is accepted, the BHA shall notify the agency by issuing a written notice of acceptance, served either in-person or by first-class mail.

(2) If the plan of action is unacceptable, the BHA shall notify the agency in writing, and the agency shall re-submit the changes within the time frame prescribed by the BHA in the notice.

(3) If the agency fails to comply with the requirements or deadlines for submission of a plan or fails to submit requested changes to the plan, the BHA may reject the plan of action and impose disciplinary sanctions as set forth in part 12.7 of this Chapter.

(4) If the agency fails to implement the actions agreed to by the action date in the approved plan of action, the BHA may impose enforcement sanctions as set forth below in part 12.7.

H. The agency must provide, upon request, access to or copies of the following to the BHA for the performance of its regulatory oversight responsibilities:

1. Individual records.

2. Reports and information including but not limited to, staffing reports, census data, statistical information, and other records, as determined by the BHA.

I. Oversight and enforcement activities may include review of endorsements and/or separate physical locations as necessary for the BHA to ensure the health, safety, and welfare of individuals.

Notes

2 CCR 502-1-12.6

46 CR 23, December 10, 2023, effective 1/1/2024