Section 1792.4 Of Article 6. Reporting And Reserve Requirements From California Health And Safety Code >> Division 2. >> Chapter 10. >> Article 6.
1792.4
. (a) Each provider shall include in its liquid reserve a
reserve for its operating expenses in an amount that equals or
exceeds 75 days' net operating expenses. For purposes of this
section:
(1) Seventy-five days net operating expenses shall be calculated
by dividing the provider's operating expenses during the immediately
preceding fiscal year by 365, and multiplying that quotient by 75.
(2) "Net operating expenses" includes all expenses except the
following:
(A) The interest and credit enhancement expenses factored into the
provider's calculation of its long-term debt reserve obligation
described in Section 1792.3.
(B) Depreciation or amortization expenses.
(C) An amount equal to the reimbursement paid to the provider
during the past 12 months for services to residents other than
residents holding continuing care contracts.
(D) Extraordinary expenses that the department determines may be
excluded by the provider. A provider shall apply in writing for a
determination by the department and shall provide supporting
documentation prepared in accordance with generally accepted
accounting principles.
(b) A provider that has been in operation for less than 12 months
shall calculate its net operating expenses by using its actual
expenses for the months it has operated and, for the remaining
months, the projected net operating expense amounts it submitted to
the department as part of its application for a certificate of
authority.