Statutory Authority: 29 Delaware Code, Section 7903(10) (29 Del.C. §7903(10))
2.2 Every facility (as defined in 16 Del.C. §1102(4)) licensed to provide care for more than three (3) residents shall be subject to this regulation. Facilities licensed to provide care for 3 or fewer residents shall be required to submit documentation demonstrating financial capability as required by the Department.
“Accountant” means a practitioner of accounting or accountancy, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.
An “Affiliate” of, or person “Affiliated” with, means a person that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control of the facility specified.
“Audited Financial Report” means and includes those items specified in subsection 7.4 of this regulation.
“Controlling Organization” means an entity that has a majority ownership interest in the licensed facility.
“Domicile” means the location of the headquarters of the business.
“Facility” means a long term care facility as defined in 16 Del.C. §1102(4) which is licensed under 16 Del.C. §1103 to provide care and services to more than three (3) residents.
“Financial Distress” means a finding by the Department following the analysis of an audit, complaint or data indicating that the financial condition of the facility threatens the health or safety of a resident(s) of a facility.
“Generally Accepted Accounting Principles (GAAP)” means those principles that are recognized as the standard framework of guidelines for financial accounting.
“Independent Certified Public Accountant” means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants (AICPA) and in all states in which he or she is licensed to practice.
“Material Adverse Change” means a change in the financial position of the facility or the controlling organization that threatens the health or safety of a resident(s) of a facility.
4.1.3 Year-end financial statement(s) – balance sheet, income statement, and statement of cash flows for the facility (most recent year at year-end). If the year-end statement that is provided is three (3) or more months old when it is received by the Department a supplemental statement through the most recent month must be submitted. If the supplemental statement(s) is not prepared by independent accountants, it is to be attested to by the treasurer and a second officer;
4.1.5 Organization charts with names and titles (personnel – facility and controlling organization);
7.2.1 Substandard Quality of Care due to an adverse financial condition.
Financial statements furnished pursuant to subsection 7.4 shall be examined by the independent certified public accountant. The audit of the facility’s financial statements shall be conducted in accordance with generally accepted auditing standards. In accordance with AU Section 319 of the Professional Standards of the AICPA, Consideration of Internal Control in a Financial Statement Audit, the independent certified public accountant should obtain an understanding of internal control sufficient to plan the audit.
13.1 The Department is authorized to impose the below listed actions to monitor the financial capability of a facility it has determined to be in financial distress. Noncompliance with any imposed action may result in the imposition of civil penalties or other remedies for compliance as authorized by 16 Del.C., Chapter 11, Sub-Chapter I.
13.1.9.1 The terms and conditions of the emergency order including costs of implementation are to be determined by the Department. The terms and conditions of the emergency order are effective until the Department conducts an administrative hearing to determine the facility management’s ongoing licensure status, which hearing must be conducted within 60 days from the date of the issuance of the order unless the facility requests a continuance of the hearing date. At the conclusion of the hearing the Department will make a final determination regarding the costs of implementation of such management and the facility’s ongoing licensure status.
13.1.10.1 Provide a copy of the notice to the DHSS; the State Long Term Care Ombudsman; managed care organization (MCO), as appropriate; any Departmental DHSS agency involved in the resident placement in the facility, including Adult Protective Services; and the protection and advocacy agency as defined in 16 Del.C. §1102 if the resident is an individual with a developmental disability or mental illness.