A few years ago, I received a call from the owner of a distribution company that sold motorized wheelchairs to Florida residents, from a business he owned, that was located in a different state. He told me, even though his office and warehouse was in a different state, that since he does business in Florida, he was required to get licensed by the Florida Agency for Health Care Administration(AHCA). He also said, that his insurance companies were requesting evidence of his Florida State License to sell or rent the motorized wheel chairs, Home Medical Equipment (HME). He filed the application for licensure and was not approved because he forgot to include the Proof of Financial Ability to Operate (PFA)form. The sad part of this story, the Applicant subsequently missed the renewal of the license by one day and was required to re-apply for licensure and prepare another Proof of Financial Ability to Operate form. It was unfortunate for the applicant, but the State of Florida is very strict and diligent about adhering to the rules.
What is a Home Medical Equipment Provider ?
According to the AHCA website, a Home Medical Equipment (HME) Provider is defined as any person or entity that offers to sell or rent to a consumer any home medical equipment and provides equipment related services such as delivery, set up and maintenance of the equipment. While it is true, that there are some exceptions to the licensure requirements under Florida’s HME Laws, in many cases, if a medical provider intends to sell or rent medical equipment you should determine if they meet the defined exceptions, for which you should consult with a healthcare attorney.
Licensure process
In a nutshell, the licensure process usually requires the preparation of an extensive application, payment of varying fees, proof of insurance, background checks, the Proof of Financial Ability to Operate form and an onsite inspection, which is typically scheduled after the application is approved. The AHCA website has different rules for each type of healthcare provider. This is a very brief summary and you should review the AHCA website for the application process and required forms.
What is a The Proof of Financial Ability to Operate Form ?
The Proof of Financial Ability to Operate form mentioned above is not a simple form, its rather complex and is designed so that the applicant demonstrates to AHCA, among other things, that the Applicant has a well thought out financial plan to deliver healthcare equipment, products or services and is knowledgeable in their line of business and the projected operations in the Proof of Financial Ability to Operate form is achievable. The PFA is effectively a formalized financial screening process to filter out the non-serious applicant and those that may have not the know how, and/or the financial resources (‘the financial ability to operate”) to deliver goods and services to Florida residents.
As indicated in the PFA’s instructions, the applicant is required to show projected revenue and expenditures, a projected balance sheet, the basis for financing anticipated cash-flow requirements of the provider, and an applicant’s access to contingency financing. In most cases, a Certified Public Accountant must compile, examine, or apply agreed-upon procedures to prospective financial statements, including summaries of significant assumptions and accounting policies, all of which prepared in accordance with generally accepted accounting principles(GAAP). Also, Schedule 1 of the PFA, requires the applicant to provide independent evidence of sufficient funds for start up, working capital and contingencies.
