To do business in healthcare, individuals and companies generally need to obtain the appropriate licenses or approvals. In addition to requirements that apply to all businesses, such as registering corporations with the Secretary of State or obtaining local business licenses called business tax receipts, there are also substantive requirements. which vary depending on the type of services to be provided. To properly assess whether a person or business meets the minimum substantive qualifications for licensing, state agencies require the submission of license applications. These applications request information on topics such as education, training, experience, and financial requirements.
These apps can often be confusing, sometimes leading to errors or omissions in the apps. While these errors and omissions can often be successfully resolved during the application process, they delay the agency’s review and approval of the application. Agencies typically review and process applications within the timeframes required by law and, if the application is complete, often exceed those timeframes. However, each error in an application requires more time to review and resolve the error and could even possibly result in the rejection of the application. Since these delays prevent a candidate from starting a business, they can lead to missed business opportunities and loss of revenue. It is therefore in the interest of the applicant to minimize errors and omissions in the application before submitting it.
In this article, we focus on some of the critical areas where we often see errors in two common types of healthcare-related applications: HMO Certificate of Authority applications (submitted to the Florida Office of Insurance Regulation); and health care facility requests, such as clinic requests (submitted to the Florida Agency for Health Care Administration). However, many of the concepts discussed in this article apply to any request submitted to a state or federal agency.
- Notary certificates – Application forms often include requirements to submit documents that have been notarized. These types of forms are regularly notarized, and notarization is not a difficult process, but mistakes are often made. Make sure that the dates of the signature and the stamp of the notary are the same; make sure that the notary has completely filled in all the required information on the notary’s stamp; and check that the notary executes the document correctly.
- Company Information – Make sure the applicant information on file with the Florida Secretary of State matches the information provided in the application.
- Biographical information – Many applications require a background check of the owners or managers of the applicant. Biographical affidavits are often long and ask for detailed information. Remember to respond to all requests. If a request is not applicable, answer “N/A” so the regulator knows the item has been reviewed. And don’t forget to check the deadlines. For example, if the application asks for 20 years of professional experience, be sure to provide information for the last 20 years. If there are significant gaps in work history, explain why.
- Financial documentation – Applicants are often required to demonstrate their financial viability (for example, by providing current financial statements) and to project their financial viability after receiving their license (for example, by providing proforma financial projections). Be sure to provide correct financial statements using applicable accounting principles (eg GAAP vs SAP). Often a request will ask for the most recent audited financial statements and the most recent unaudited financial statements since the beginning of the year. If both are available, the applicant must provide both. Requests for pro forma financial projections are often based on a certain time frame (eg, 3 years of projections) and a measure of profitability (eg, a forecast of profitability for twelve consecutive months). Make sure that the pro forma statements meet these two requirements, as well as any other specific requirements imposed by the agency, such as limits on projected operating margin.
- Insurance certificates – Proof of appropriate insurance is required for many applications. The proof of insurance must cover the period mentioned in the application (for example, do not include certificates of insurance that have expired). If the claimant is a subsidiary of the insured, the proof of insurance must identify the claimant as a named or additional insured.
Reading the instructions and answering each part of the question carefully may seem like a “common sense” approach. Unfortunately, corners are often cut in the rush to submit the application. Ironically, this haste, and the errors and omissions it entails, often results in much longer delays than would have been experienced had the application been completed more thoroughly, albeit longer. Accordingly, when preparing applications, the main points to remember are:
- Read the application entirely;
- Take the time to deal with each item thoroughly and completely;
- Make sure the answers are consistent throughout the application;
- If the application requires the completion of a form, be sure to use the current and correct version of this form (current versions of application forms for the Office of Insurance Regulation are available here and application forms for the Agency for Healthcare Administration are available here);
- Review documentation and responses that have been prepared and provided by others, rather than relying on them not to have made mistakes; and
- Check the application again after you complete it, but before submitting it, to help catch any clerical or inadvertent errors.
Finally, if an applicant is unsure of the specific documentation or material required by an application, contact the appropriate regulatory authority and ask for further clarification. Regulators prefer to answer questions in advance to help the applicant submit a correct and complete application, rather than having to review documents and materials that may be unnecessary and non-compliant. We advise applicants to hire an attorney or consultant with experience in submitting the particular claim and with a good reputation to practice regularly before the specific state agency.