proof of financial ability to operate

Certain types of healthcare providers are subject to unique financial requirements any time they open a new facility or undergo a change in ownership. Florida’s Agency for Health Care Administration (AHCA) oversees the state’s health policy and planning, and it’s also the agency that reviews Proof of Financial Ability to Operate applications from health providers. Like many bureaucratic processes, submitting your documentation to AHCA can be fraught with pitfalls. There are certain ways the financial statements must be prepared and many nuances that require the help of a CPA who has specialized training.

What Florida healthcare organizations are required to submit Proof of Financial Ability to Operate to AHCA?

Proof of Financial Ability to Operate must be submitted by the following provider types:

  • Adult Day Care Centers (ADCC)
  • Health Care Clinics
  • Assisted Living Facilities (ALF)
  • Home Health Agencies
  • Intermediate Care Facilities for the Developmentally Disabled (ICFDD)
  • Hospice
  • Home Medical Equipment
  • Prescribed Pediatric Extended Care Center (PPEC)
  • Skilled Nursing Facilities 

These organizations must provide their Proof of Financial Ability to Operate when they establish their business, open a new facility, or undergo a change in ownership.

What information is needed for Proof of Financial Ability to Operate?

The overarching goal of the AHCA requirement is to ensure that any new healthcare facility has the necessary funding to operate safely and in compliance with all applicable regulations. The State of Florida requires healthcare applicants to show the following:

  • Anticipated provider revenue and expenditures
  • Basis for financing anticipated cash-flow requirements
  • Access to contingency financing

A CPA must prepare schedules 1-7 in conformity with the instructions, generally accepted accounting principles (GAAP), and all relevant rules. Projections must show assets, credit, and projected revenues that meet or exceed projected liabilities and expenses. Independent evidence also must show sufficient funds for the start-up phase, working capital, and contingencies. 

What events trigger AHCA requirements?

While new organizations will need to submit Proof of Financial Ability to Operate, it’s not a one-and-done process. Any time there’s a change in ownership (CHOW) or new facility opening, you’ll need to update your projections. Form 3100-0009 includes all of the required information. You’ll need to provide:

  • Schedule 1: Estimated Provider Costs and Source of Funds
  • Schedules 2 and 2.1: Staffing Requirements
  • Schedule 3: Hours and Charges
  • Schedule 4.1: Supplementary Home Health Agency Schedule
  • Schedule 5: Balance Sheet
  • Schedule 6: Projected Summary of Revenues and Expenses
  • Schedule 7: Projected Cash Flow Statement

As you can see if you download the application, this isn’t a quick and easy form to complete. There are also some unwritten rules that can cause your application to be rejected by AHCA. While any CPA licensed in the State of Florida technically can prepare these forms, we strongly recommend partnering with one who has experience with AHCA approvals. Our team has a ten-year track record of helping medical facilities receive AHCA approval, both for new and CHOW applications. 

Get Started with Proof of Financial Ability to Operate for AHCA

Looking for assistance with your CHOW or new AHCA application? Complete the form below to request a consultation. One of our team members will reach out to you with the next steps.

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