Md. Code Regs. 32.02.01.07 - Department Action on Feasibility Study and Application for a Preliminary Certificate of Registration
A. The
Department shall approve a feasibility study when it determines that:
(1) Either a certificate of need or an
exemption from a certificate of need has been issued by MHCC for the number of
comprehensive care beds proposed for the facility for which licenses are
required by DHMH ;
(2) The number of
licensed assisted living units proposed for the facility is not inconsistent
with the State Health Plan;
(3) A
reasonable financial plan has been submitted for developing and operating the
proposed project, which:
(a) Includes in the
projected financial statements all obligations and liabilities to be undertaken
by the provider pursuant to the terms of the proposed continuing care
agreement ;
(b) Demonstrates that
the anticipated sources of funds to finance the proposed project are equal to
or greater than the anticipated uses of funds to construct or acquire the
proposed project; and
(c)
Demonstrates that the facility is financially feasible;
(4) A market for the continuing care facility
appears to exist, based on reliable data, which:
(a) Is community specific;
(b) Takes into account competing shelter and
health-related providers;
(c)
Relates the existence of a market to the age, health, sex, marital status,
number, population trends, net worth, home values, and income of the potential
subscribers; and
(d) Demonstrates
that the rate of penetration in the proposed market area is within acceptable
industry ranges;
(5) The
actuarial study as required in Regulation .05 of this chapter has been
submitted and includes:
(a) A cohort pricing
analysis that demonstrates that, for a typical cohort of new subscribers, the
sum of the entrance fees paid at occupancy plus the actuarial present value at
occupancy of periodic fees exceeds the actuarial present value at occupancy of
the costs of performing all obligations assumed by the provider , with
appropriate provision for surplus;
(b) Cash flow projections for a 20-year
period, which project positive cash balances;
(c) Supporting detailed documentation for the
cohort pricing analysis which includes a:
(i)
Projection of future population flows for a 20-year period, which uses
appropriate morbidity, mortality, withdrawal, and other demographic
assumptions,
(ii) Projection of
future health care bed needs for a 20-year period, which uses appropriate
morbidity, mortality, withdrawal, and other demographic assumptions,
and
(iii) Descriptions of the
actuarial data, assumptions, and methods; and
(d) An opinion of a qualified actuary , which
states that:
(i) The data and assumptions used
are appropriate,
(ii) The methods
employed are consistent with sound actuarial principles and practices,
and
(iii) Provision has been made
for all actuarial liabilities and related statement items;
(6) The projection of future
population flows and health care bed needs, for the first 20 years, uses
appropriate mortality, morbidity, withdrawal, and other demographic assumptions
as required in Regulation .05 of this chapter;
(7) The feasibility study was prepared by an
authority recognized by the Department ;
(8) The approved escrow agreement and deposit
agreement state that all deposits and entrance fees shall be held in escrow in
Maryland in a financial institution until:
(a)
The issuance of an initial certificate of registration;
(b) Completion of construction;
(c) The issuance of a certificate of
occupancy or the equivalent by the appropriate local jurisdiction;
and
(d) The issuance of appropriate
licenses or certificates by DHMH , MHCC, and the Department ; and
(9) A copy of the escrow
agreement , executed by the provider and the financial institution, is on file
with the Department.
B.
The Department shall issue a preliminary certificate of registration when it
determines that the following conditions have been met:
(1) The feasibility study has been approved
by the Department ;
(2) The
agreement between the provider and the subscriber meets the requirements of
Human Services Article, §§
10-444
-10-449, Annotated Code of Maryland, and Regulations .27-.29 of this
chapter;
(3) The required financial
and organizational materials have been submitted to the Department ;
and
(4) The Department has
determined that the form and substance of all advertising and other promotional
materials filed are not deceptive, misleading, or likely to mislead.
C. Until the initial certificate
of registration has been issued, the provider shall inform the Department of
any changes or additions to the information provided in the feasibility study
and in the application for a preliminary certificate of registration.
Notes
Regulations .07 adopted effective June 2, 1986 (13:11 Md. R. 1274)
Regulations .07 adopted effective July 27, 1998 (25:15 Md. R. 1192)
Regulation .07A amended effective March 22, 2010 (37:6 Md. R. 481)
Regulation .07A, B amended effective November 6, 2006 (33:22 Md. R. 1734)
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