Completion of Financial Forms
(1)In completing Form CN-4, “Project Cost Estimate,” the applicant should fill in all of the appropriate fund sources.
(2)In completing Form CN-5, “Income Statement,” Form CN-6, “Balance Sheet,” and Form CN-7, “Statement of Changes in Financial Position,” the applicant should provide all line items requested. The applicant may use its own facility format if it includes all the line items requested, but in such cases the format used by the applicant should include a reference to the appropriate certificate of need form number.
(3)In completing Form CN-8, “Debt Service Coverage,” the applicant should forecast debt service coverage using the accrual basis of accounting. Debt service coverage is to be computed as follows:
(4)The applicant should complete Form CN-9, “Ratio Analyses,” for the years requested. Financial performance of the applicant organization proposing the project will be evaluated by commonly accepted health care industry indicators related to financial soundness, plausibility of economic assumptions used, and overall effect on patient charges. These financial ratios are listed in Table 1. Applicants must use the formulas shown in Table 1 in completing Form CN-9:
(a)If an applicant believes that some analysis, in addition to the Ratio Analysis, gives a more appropriate measure, the applicant may present such other analysis, together with an explanation of why it is more appropriate. The division will determine whether or not such alternative analysis is acceptable;
(b)As used in this rule:
(A)“Net Operating Income” means total operating revenue less total operating expenses;
(B)Total operating revenue is exclusive of nonoperating revenue;
(C)“Fund Balance” means the unrestricted fund balance at the end of the period;
(D)Average annual outpatient revenue and inpatient days should be taken from the applicant’s audited financial data.
(5)In completing Form CN-10, “Volume-Adjusted Expenses and Revenues,” the number of patient days used must be consistent with those cited elsewhere in the application. Unless otherwise approved by the division, historical figures will be derived from the Annual Reports of health facility utilization required by ORS 442.463 (Annual utilization report).
(6)In completing Form CN-11, “Financial Analysis for Individual Services,” all new or proposed revenue-producing clinical or nonclinical services which, by themselves, qualify for certificate of need review whether alone or a subpart of a project, must each have a financial analysis separate from the institution as a whole, and a separately-completed Form CN-11.
(7)In completing Form CN-12, “Sources and Uses of Funds for the Proposed Project,” the applicant must provide all items requested.
(8)In providing all of the financial forecasts required by this rule, the applicant must base its forecast on estimates of the most probable financial position, results of operations, and changes in financial position for future periods. “Most probable” means that the assumptions have been evaluated by management and that the forecast is based on management’s judgment of the most likely set of conditions and its most likely course of action.
Rule 333-580-0100 — Completion of Financial Forms,