9414.1 Each provider shall, at the time of application and upon request by DHCF, provide documented evidence of adequate financial resources to deliver all required services and operate a financially viable business, in accordance with the requirements below:

(a) Financial resources are considered adequate if the provider has available cash reserves or line of credit sufficient to operate for a continuous three (3) month period; and

(b) Documented evidence required of each provider includes current financial statements or pro forma compiled and approved by the managing officers of the corporation and an independent Certified Public Accountant (CPA).

9414.2 At the time of application and upon request by DHCF, each provider designated as “moderate” or “high” risk shall provide documentation of the following as proof of the provider’s financial viability:

(a) A business plan, which shall include the following elements:

(1) A description of the provider’s business entity (e.g., location, ownership, corporate structure, provider’s methods to obtain patients, and its plan to recruit and maintain staff);

(2) The number and functions of professional staff to be employed; and

(3) A listing of services to be provided, either directly by the provider or through contractual arrangements with existing providers.

(b) Financial accounting documents, which include a balance sheet, income and expense statement, and statement of cash flows for the first year of operation. All accounting documents required under this paragraph must be prepared in accordance with generally accepted accounting principles (GAAP);

(c) Copies of the provider’s bank statements showing available cash reserves or an available line of credit sufficient to operate the entity for a three (3) month period;

(d) Proof of credit facilities or guarantees obtained from a financial institution or private entity;

(e) Adequate internal controls for safeguarding or avoiding misuse of federal and District government funds;

(f) Fiscal management policies and procedures and maintenance of financial records in accordance with GAAP; and

(g) A Clean Hands certificate issued by the District of Columbia Office of Tax and Revenue.

9414.3 Providers and disclosing entities shall also provide the documentation required under § 9414.2 at each of the following times:

(a) Upon submitting the application;

(b) Upon execution of the provider agreement;

(c) Upon request of DHCF during the revalidation process;

(d) Within thirty-five (35) calendar days following any change in ownership of the disclosing entity.

9414.4 At each revalidation of enrollment, any provider designated as “moderate” or “high” risk shall have a compilation by an independent or certified public accounting firm, and the resulting compilation report shall be consistent with formats recommended by the American Institute of Certified Public Accountants. A copy of the compilation report and management letter shall be submitted to DHCF within one hundred twenty (120) calendar days after the close of the provider’s fiscal year.

9414.5 Each provider shall maintain proof of liability insurance coverage, which must include malpractice insurance of at least three million dollars ($3,000,000) aggregate and one million dollars ($1,000,000) per incident and comprehensive general coverage of at least three million dollars ($3,000,000) per incident that covers general liability, vehicular liability, and property damage. The insurance shall include coverage of all personnel, consultants, and volunteers working for the provider.

9414.6 Each provider shall ensure that all employees are paid in accordance with all applicable laws governing labor and employment as a condition of participation in the District Medicaid program.

9414.7 Each provider shall ensure that all business records pertaining to costs, payments received and made, and services provided to beneficiaries are maintained for a period of at least ten (10) years or until all audits and ongoing litigation is

complete, whichever is longer.

SOURCE: Final Rulemaking published at 60 DCR 10041 (July 12, 2013); as amended by Final Rulemaking published at 68 DCR 4255 (April 23, 2021).