(a) The financial plan shall include the following:
(1) A detailed marketing plan;
(2) Statements of revenue and expense on an accrual basis;
(3) Cash flow statements;
(4) Balance sheets; and
(5) The assumptions and justifications in support of thefinancial plan.
(b) In the financial plan, the PSO shall demonstrate that it hasthe resources available to meet the projected losses for the entire period tobreak even. Except for the use of guaranties as provided in subsection (c) ofthis section, letters of credit as provided in subsection (e) of this section,and other means as provided in subsection (f) of this section, the resourcesmust be assets on the balance sheet of the PSO in a form that is either cash orconvertible to cash in a timely manner, pursuant to the financial plan.
(c) Guaranties shall be acceptable as a resource to meetprojected losses, under the following conditions:
(1) For the first year of the PSO's operation of the PSO'sMedicare contract, the guarantor must provide the PSO with cash or cashequivalents to fund the projected losses, as follows:
a. Prior to the beginning of the first quarter, in the amountof the projected losses for the first two quarters;
b. Prior to the beginning of the second quarter, in the amountof the projected losses through the end of the third quarter; and
c. Prior to the beginning of the third quarter, in the amountof the projected losses through the end of the fourth quarter.
(2) If the guarantor provides the cash or cash equivalents tothe PSO in a timely manner on the above schedule, this funding shall beconsidered in compliance with the guarantor's commitment to the PSO. In thethird quarter, the PSO shall notify the Division if the PSO intends to reducethe period of funding of projected losses. The Division shall notify the PSOwithin 60 days of receiving the PSO's notice if the reduction is notacceptable.
(3) If the above guaranty requirements are not met, the Divisionmay take appropriate action, such as requiring funding of projected lossesthrough means other than a guaranty. The Division retains discretion whichshall be reasonably exercised to require other methods or timing of funding,considering factors such as the financial condition of the guarantor and theaccuracy of the financial plan.
(d) The Division may modify the conditions in subsection (c) ofthis section in order to clarify the acceptability of guaranty arrangements.
(e) An irrevocable, clean, unconditional letter of credit may beused as an acceptable resource to fund projected losses in place of cash orcash equivalents if satisfactory to the Division.
(f) If approved by the Division, based on appropriate standardspromulgated by the Division, PSOs may use the following to fund projectedlosses for periods after the first year: lines of credit from regulatedfinancial institutions, legally binding agreements for capital contributions,or other legally binding contracts of a similar level of reliability.
(g) The exceptions in subsections (c), (e), and (f) of thissection may be used in an appropriate combination or sequence. (1998‑227, s. 1.)
(a) The financial plan shall include the following:
(1) A detailed marketing plan;
(2) Statements of revenue and expense on an accrual basis;
(3) Cash flow statements;
(4) Balance sheets; and
(5) The assumptions and justifications in support of thefinancial plan.
(b) In the financial plan, the PSO shall demonstrate that it hasthe resources available to meet the projected losses for the entire period tobreak even. Except for the use of guaranties as provided in subsection (c) ofthis section, letters of credit as provided in subsection (e) of this section,and other means as provided in subsection (f) of this section, the resourcesmust be assets on the balance sheet of the PSO in a form that is either cash orconvertible to cash in a timely manner, pursuant to the financial plan.
(c) Guaranties shall be acceptable as a resource to meetprojected losses, under the following conditions:
(1) For the first year of the PSO's operation of the PSO'sMedicare contract, the guarantor must provide the PSO with cash or cashequivalents to fund the projected losses, as follows:
a. Prior to the beginning of the first quarter, in the amountof the projected losses for the first two quarters;
b. Prior to the beginning of the second quarter, in the amountof the projected losses through the end of the third quarter; and
c. Prior to the beginning of the third quarter, in the amountof the projected losses through the end of the fourth quarter.
(2) If the guarantor provides the cash or cash equivalents tothe PSO in a timely manner on the above schedule, this funding shall beconsidered in compliance with the guarantor's commitment to the PSO. In thethird quarter, the PSO shall notify the Division if the PSO intends to reducethe period of funding of projected losses. The Division shall notify the PSOwithin 60 days of receiving the PSO's notice if the reduction is notacceptable.
(3) If the above guaranty requirements are not met, the Divisionmay take appropriate action, such as requiring funding of projected lossesthrough means other than a guaranty. The Division retains discretion whichshall be reasonably exercised to require other methods or timing of funding,considering factors such as the financial condition of the guarantor and theaccuracy of the financial plan.
(d) The Division may modify the conditions in subsection (c) ofthis section in order to clarify the acceptability of guaranty arrangements.
(e) An irrevocable, clean, unconditional letter of credit may beused as an acceptable resource to fund projected losses in place of cash orcash equivalents if satisfactory to the Division.
(f) If approved by the Division, based on appropriate standardspromulgated by the Division, PSOs may use the following to fund projectedlosses for periods after the first year: lines of credit from regulatedfinancial institutions, legally binding agreements for capital contributions,or other legally binding contracts of a similar level of reliability.
(g) The exceptions in subsections (c), (e), and (f) of thissection may be used in an appropriate combination or sequence. (1998‑227, s. 1.)
(a) The financial plan shall include the following:
(1) A detailed marketing plan;
(2) Statements of revenue and expense on an accrual basis;
(3) Cash flow statements;
(4) Balance sheets; and
(5) The assumptions and justifications in support of thefinancial plan.
(b) In the financial plan, the PSO shall demonstrate that it hasthe resources available to meet the projected losses for the entire period tobreak even. Except for the use of guaranties as provided in subsection (c) ofthis section, letters of credit as provided in subsection (e) of this section,and other means as provided in subsection (f) of this section, the resourcesmust be assets on the balance sheet of the PSO in a form that is either cash orconvertible to cash in a timely manner, pursuant to the financial plan.
(c) Guaranties shall be acceptable as a resource to meetprojected losses, under the following conditions:
(1) For the first year of the PSO's operation of the PSO'sMedicare contract, the guarantor must provide the PSO with cash or cashequivalents to fund the projected losses, as follows:
a. Prior to the beginning of the first quarter, in the amountof the projected losses for the first two quarters;
b. Prior to the beginning of the second quarter, in the amountof the projected losses through the end of the third quarter; and
c. Prior to the beginning of the third quarter, in the amountof the projected losses through the end of the fourth quarter.
(2) If the guarantor provides the cash or cash equivalents tothe PSO in a timely manner on the above schedule, this funding shall beconsidered in compliance with the guarantor's commitment to the PSO. In thethird quarter, the PSO shall notify the Division if the PSO intends to reducethe period of funding of projected losses. The Division shall notify the PSOwithin 60 days of receiving the PSO's notice if the reduction is notacceptable.
(3) If the above guaranty requirements are not met, the Divisionmay take appropriate action, such as requiring funding of projected lossesthrough means other than a guaranty. The Division retains discretion whichshall be reasonably exercised to require other methods or timing of funding,considering factors such as the financial condition of the guarantor and theaccuracy of the financial plan.
(d) The Division may modify the conditions in subsection (c) ofthis section in order to clarify the acceptability of guaranty arrangements.
(e) An irrevocable, clean, unconditional letter of credit may beused as an acceptable resource to fund projected losses in place of cash orcash equivalents if satisfactory to the Division.
(f) If approved by the Division, based on appropriate standardspromulgated by the Division, PSOs may use the following to fund projectedlosses for periods after the first year: lines of credit from regulatedfinancial institutions, legally binding agreements for capital contributions,or other legally binding contracts of a similar level of reliability.
(g) The exceptions in subsections (c), (e), and (f) of thissection may be used in an appropriate combination or sequence. (1998‑227, s. 1.)
