TITLE 7 HEALTH
CHAPTER 20 MENTAL
HEALTH
PART 4 BEHAVIORAL
HEALTH CAPITAL FUND PROGRAM
7.20.4.1 ISSUING
AGENCY: New Mexico
Department of Health - Behavioral Health Services Division.
[7.20.4.1 NMAC - N, 05-31-07]
7.20.4.2 SCOPE: The behavioral health capital fund program
rule shall apply to the use of funds by eligible entities available pursuant to
the Behavioral Health Capital Funding Act, Sections 6-26-1., et seq., NMSA
1978.
[7.20.4.2 NMAC - N, 05-31-07]
7.20.4.3 STATUTORY
AUTHORITY: This rule is promulgated
pursuant to: 1) the Department of Health Act, Section 9-7-6.E., NMSA 1978; 2)
the Behavioral Health Capital Funding Act, Sections 6-26-1., et seq., NMSA
1978.
[7.20.4.3 NMAC - N, 05-31-07]
7.20.4.4 DURATION: Permanent.
[7.20.4.4 NMAC - N, 05-31-07]
7.20.4.5 EFFECTIVE
DATE: 05-31-07, unless a
later date is cited at the end of a section.
[7.20.4.5 NMAC - N, 05-31-07]
7.20.4.6 OBJECTIVE: The objective is to establish standards and
procedures for regulating programs under the Behavioral Health Capital Funding
Act. Section 6-26-5 NMSA 1978 of the Behavioral
Health Capital Funding Act directs the department of health and the New Mexico
finance authority jointly to develop and administer a loan program established
pursuant to the provisions of the act.
[7.20.4.6 NMAC - N, 05-31-07]
7.20.4.7 DEFINITIONS:
A. "Act"
means the Behavioral Health Capital Funding Act (Sections 6-26-1 to 6-26-8 NMSA
1978).
B. "Agreement"
means the document or documents signed by the board and the eligible entity
receiving a loan that specifies the terms and conditions of obtaining the loan
under the program.
C. "Applicant"
means an eligible entity that has filed a request for a loan with the department
and the authority.
D. "Application"
means a written document filed with the department and the authority by an applicant
for the purpose of obtaining a loan. An application may include a form
prescribed by the department and the authority, written responses to requests
for information by the department and the authority, or other format as
determined by the department and the authority.
E. "Application committee"
means a six-member body, three members appointed by the chief executive officer
of the authority from the authority staff and three members appointed by the department
from the department staff.
F. “Authority" means the New Mexico finance authority.
G. "Authorized representative" means one or more individuals authorized by
the governing body of an eligible entity to act on behalf of the eligible
entity in connection with its application.
An authorized representative may act on behalf of the eligible entity to
the extent provided by law.
H. “Behavioral health care” means a comprehensive array of professional
and ancillary services for the treatment of mental illnesses, substance abuse
disorders and/or trauma spectrum disorders.
I. “Behavioral health service provider” means an individual or an agency licensed or
certified by or receiving funds under contract with the New Mexico department
of health for the provision of behavioral health services.
J. “Behavioral health care facility” means a facility operated by a behavioral
health service provider.
K. "Board" means the New Mexico finance authority board,
as created by and set forth in the bylaws of the authority.
L. "Department" means the New Mexico department of health.
M. "Eligible entity" means a provider that meets the statutory
definition of “eligible entity” provided for in the act.
N. "Loan" means a loan made by the authority to an applicant
under the program for the funding of a project.
O. "Fund" means the behavioral health capital fund.
P. "Program" means the behavioral health capital fund program
authorized by the act.
Q. "Project" means repair, renovation or construction of
a behavioral health care facility, purchase of land, or the acquisition of
capital equipment of a long-term nature.
The following items shall be eligible or ineligible for purposes of
funding through a loan:
(1) eligible for funding:
(a)
building, construction, renovation;
(b) land;
(c) project
planning and design;
(d) purchase of capital equipment;
(2) ineligible for funding:
(a) purchase of office supplies;
(b) general operating expenses.
R. "Sick and medically indigent" means both those individuals below the
federal poverty level not covered by private third party health care insurance
and those individuals between 100% and 200% of federal poverty levels who are
not covered by any private third party health insurance. Medically indigent individuals are usually
expected to pay for some portion of the cost of their health care based upon
the level of their income.
[7.20.4.7 NMAC - N, 05-31-07]
7.20.4.8 LOAN
APPLICATION PROCEDURES:
A. Contingent upon a sufficient balance in the fund, the department and
the authority may accept applications at any point during the state fiscal
year.
B. The department and the authority will provide forms and/or guidelines
for a loan application and applications must be submitted on that form. The application shall be signed by the
authorized representative and submitted to the department. Only applications that are complete will be
considered for a loan. The application
shall include the following.
(1) The amount of the loan requested and an
itemization of the proposed use or uses of the loan.
(2)
A detailed description of the circumstances that demonstrate the need
for the project, including:
(a) the eligibility of the applicant;
(b) the programmatic appropriateness;
(c) the facility’s need;
(d) the needs of community.
(3) A detailed description of the project,
including:
(a) a description of the scope of work of the
project;
(b) the estimated cost of the project;
(c) the target date for the initiation of the
project and the estimated time to completion;
(d) the estimated useful life of the project
and selected components (furnishings, equipment, etc.), as detailed on the
application form;
(e) proof of applicable licenses and certifications;
and
(f) other data as requested by the department
or the authority.
(4) A copy of the applicant's articles of
incorporation and by-laws and a certificate of good standing from the New
Mexico public regulation commission.
(5) A copy of the applicant's internal revenue
service tax exempt determination letter.
(6) A letter certifying that the project was
duly authorized and approved by the applicant's governing body.
(7) The identification of the source of funds
for repayment of the loan and the source of funds to operate and maintain the
project over its useful life.
(8) The applicant's audited financial reports
for the most recent five years, or term of existence, along with its projected
cash flows for five years.
(9) The requested loan payback period.
(10) Any existing title insurance policies,
title abstracts or searches of the real property owned by the applicant.
(11) Information on the current and proposed
services of the applicant to the sick and medically indigent.
(12) Additional information as requested by the
department or the authority that is requested at any point in the application
process.
[7.20.4.8 NMAC - N, 05-31-07]
7.20.4.9 EVALUATION
OF APPLICANT AND PROJECT BY DEPARTMENT AND THE APPLICATION COMMITTEE:
A. The department will determine whether an application is complete. Once the application is complete, the
department will evaluate the application for eligibility and will determine the
programmatic priority of the project.
B. To be eligible
for a loan, an eligible entity must:
(1) be a provider or facility that meets the
statutory definition of “eligible entity” provided for in the act;
(2) have policies and procedures that assure
that no person will be denied services because of inability to pay; these
policies and procedures must address the medically indigent persons below
poverty not covered by third party payors and those between 100% and 200% of
poverty without third party coverage; the eligible entity must be able to
demonstrate either the successful impact of these policies and procedures, or
have a practical plan for their implementation;
(3) have billing policies and procedures that
maximize patient collections except where federal rules or contractual
obligations prohibit the use of such measures; the eligible entity must be able
to demonstrate either the successful impact of these policies and procedures,
or have a practical plan for their implementation;
(4) provide evidence satisfactory to the
authority that it has proper title, easements, leases, and right of ways to the
property upon which any facility proposed for funding is constructed or
improved;
(5) comply with all applicable federal, state,
and local laws and rules;
(6) meet other requirements as determined by
the department.
C. The department shall determine the priority for loans from the
fund. Priority shall be based on:
(1) community need and support, including but
not limited to the identification of other financing;
(2) facility or equipment need;
(3) the appropriateness of the project;
(4) the ability of an applicant to maintain
behavioral health care services;
(5) whether making the loan would help achieve
the goal of a fair geographic distribution of loans; and,
(6) other factors, as determined by the
department.
D. Upon completion of its evaluation of eligibility and its determination
of programmatic priority, the department will refer the applications to the
application committee. The application
committee will evaluate the project. The
application committee may confer with outside parties as necessary to obtain
more information on the feasibility of the project, the applicant’s
administrative capacity, and the applicant’s readiness to proceed. The application committee will make a written
recommendation to the authority. The
recommendation will include approval or disapproval of specific projects and
the estimated costs of the projects. The
recommendation may include recommendations for loan covenants needed for
programmatic reasons and adjustments to the department’s programmatic prioritization
of loans.
E. Although the department and the authority will analyze each project to
determine whether the project is feasible, a loan by the authority does not
constitute a warranty or other guarantee as to the feasibility of the project
and the authority shall not have any responsibility or liability with respect
to any project.
[7.20.4.9 NMAC - N, 05-31-07]
7.20.4.10 FINANCING
APPROVAL BY THE AUTHORITY:
A. The authority will perform an independent financial analysis of each
application. In evaluating an application,
the authority will consider.
(1) The applicant’s demonstration that the
excess of public support and revenues over expenses for the most recent fiscal
year or the projected amount for the fiscal year after the project's completion
(after adding back annual depreciation and interest) will provide sufficient
coverage of the previous year's annual debt service and sufficient coverage of
projected maximum annual debt service after accounting for the loan.
(2) The ability of the applicant to secure
financing from other sources and the costs of the loan.
(3) The recommendations of the application
committee.
B. The evaluation must include a finding that the useful life of the
project will meet or exceed the final maturity of the loan and must meet
standards for reasonable costs set by the board.
C. The
evaluation must include a finding by the authority that there is adequate
protection, including loan guarantees, real property liens, title insurance,
security interests in or pledges of accounts and other assets, loan covenants
and warranties or restrictions or other encumbrances and pledges for the state
funds extended for the loan.
D. The applicant must agree, and such agreement may be included in the
agreement at the request of the board:
(1) to maintain separate project accounts in
accordance with generally accepted accounting principles and to conduct an
annual audit of the project's financial records during the term of the loan;
and
(2) to satisfy any other requirements as may
be determined by the authority.
E. Once a recommendation has been made on the application by the authority
staff, the board will act on the application and any associated loan documents
or agreements no later than the next regular board meeting at which such item
may be properly considered. The board
may approve all or part of the application as recommended by the authority
staff. Board approval may specify, at
the board's discretion, terms and conditions of the loan as necessary to ensure
repayment, including but not limited to, maximum loan term and maximum annual
payments.
F. The authority will notify the applicant of the approval or disapproval
of its application by telephone and will mail written notification by certified
mail within seven working days of board action.
G. All communications regarding an eligible entity's original application
shall be directed to the department.
[7.20.4.10 NMAC - N,
05-31-07]
7.20.4.11 RECONSIDERATION:
A. Decision by department as to eligibility. An applicant may request reconsideration of a
contrary decision by the department as to whether it is an eligible entity as
defined by the act and under these rules.
Notice must be given to the department in writing within ten (10)
working days of receipt of the department’s decision as to eligibility. A request for reconsideration not timely or
properly made will be barred. The
department’s secretary will promptly review each timely request for
reconsideration. The decision of the department secretary is final. If the decision of the department secretary
differs from the decision of the department as to an applicant’s eligibility,
evaluation of the application shall be resumed by the department based on the
decision of the department secretary.
B. Decision by board as to funding.
An applicant may request reconsideration of a decision by the board
denying funding to an eligible entity by notifying the authority in writing
within forty-five days of the date on which the authority gives notice of an
adverse decision to an applicant. Notice
of an adverse decision is deemed to be given on the fifth business day
following the date on which written notice of the adverse decision is mailed to
the applicant by the authority by certified United States mail. A request for reconsideration is deemed to
have been given on the fifth business day following the date on which the
request is mailed to the authority. A
request for reconsideration not timely or properly made will be barred. The authority's chief executive officer will
promptly review each timely request for reconsideration and will recommend, at
the next regular meeting of the board, action to be taken by the board. The board will review and take action on the
request for reconsideration and will notify the applicant of the board's
decision, in writing, within five working days of the board's decision. The decision of the board is final.
[7.20.4.11 NMAC - N,
05-31-07]
7.20.4.12 LOAN
DOCUMENTS AND AGREEMENT:
A. The authority and the eligible entity will enter into an agreement and
any other applicable documentation to establish the terms and conditions of the
loan. The agreement will include the
terms of repayment and remedies and sanctions available to the authority in the
event of a default. The authority will
monitor and enforce the terms and conditions of the agreement, including prompt
notice and collection. In consultation
with the department, the authority will take actions as necessary to ensure
loan repayment and the integrity of the fund.
The authority will not monitor the performance of an eligible entity
under department credentialing and/or licensure requirements nor for programmatic
requirements and will not make site visits.
The department will monitor the performance of an eligible entity under
department credentialing and/or licensure requirements and for programmatic
requirements and will make the necessary site visits. The authority will not be responsible for any
act or omission of the applicant upon which any claim, by or on behalf of any
person, firm, corporation or other legal entity, may be made, arising from the loan
or any establishment or modification of the project or otherwise.
B. The board will establish the interest rate for loans. The board will set the rate at the lowest
legally permissible interest rate. The
interest rate shall not change during the term of the loan unless refinanced.
C. The agreement will contain provisions that require that.
(1)
The applicant complies with all applicable federal, state and local laws
and rules.
(2) Any contract or subcontract executed for
the completion of any project shall contain a provision that there shall be no
discrimination against any employee or applicant for employment because of
race, color, creed, sex, religion, sexual preference, ancestry or national
origin.
(3) The applicant shall require any contractor
of a project to post a performance and payment bond in accordance with the
requirements of Section 13-4-18 NMSA 1978 and its subsequent amendments and
successor provisions.
D. The authority shall ensure the state’s interest in any project by
filing a lien equal to the total of the authority’s financial participation in
the project.
E. If land is to be purchased with a loan from the fund, the applicant
shall provide evidence satisfactory to the authority that the title is
merchantable and free and clear from liens or encumbrances. The authority shall also require that a title
insurance policy insuring the authority’s interest as a first lien be obtained
as a condition of making the loan. The
eligible entity shall not encumber the land purchased by granting or creating
any additional security interest in the land while any amount of the loan is
unpaid. The eligible entity shall pay
immediately any encumbrance or lien against the land that attaches while any
amount of the loan is unpaid.
F. If any repayment of a loan is more than 30 days past due, or if the
eligible entity is in default on any other conditions as defined under the loan
agreement, the authority and the department will report to each other and to
the application committee as to the borrower’s then current status as it
relates to the loan, including credentialing or licensure status and any
reported or known violations of applicable laws or rules to which the facility
is subject and any known change in financial status. The department may develop workout plans in
conjunction with the application committee for any borrower who maintains
eligibility as defined in NMSA 1978 Section 6-26-3 D, but is more than 60 days
past due in loan repayment. The
authority may develop workout plans in conjunction with the application
committee for any borrower who ceases to maintain eligibility as defined in
NMSA 1978 Section 6-26-3 D and is more than 60 days past due in loan
repayments. Any such workout plan and
its implementation is in addition to and not instead of the courses of actions,
remedies and sanctions available separately to the department or the authority
under the act, these rules or the agreement or in any other manner available by
law.
G. If an eligible entity that has received a loan for a project ceases to
maintain its nonprofit status or ceases to deliver behavioral health services
at the site of the project for twelve consecutive months, the authority may
pursue the remedies provided in the loan agreement or as provided by law.
H. If an eligible entity has received a loan for a project, the loan may
be renegotiated if the entity is still eligible but has had a change in
financial status.
I. In the event of default by the borrower, the authority may enforce its
rights by suit or mandamus and may utilize all other available remedies under
state and applicable federal law.
[7.20.4.12 NMAC - N,
05-31-07]
7.20.4.13 ADMINISTRATION
OF THE BEHAVIORAL HEALTH CAPITAL FUND:
A. The fund shall be administered by the authority as a separate account,
but may consist of such sub accounts as the authority deems necessary to carry
out the purposes of the fund.
B. Money from repayments of loans or payments on securities held by the
authority for projects authorized specifically by law shall be deposited in the
fund. The fund shall also consist of any
other money appropriated, distributed or otherwise allocated to the fund for
the purpose of financing projects authorized specifically by law.
C. The authority shall adopt a uniform accounting system for the fund and
related accounts and sub-accounts established by the authority, based on
generally accepted accounting principles.
[7.20.4.13 NMAC - N,
05-31-07]
History of 7.20.4 NMAC:
[RESERVED]