OAR 410-050-0750: Reporting Total Net Revenue, Use of Estimated Revenue for Quarterly Reports

(1) A hospital shall submit quarterly reports and quarterly payments for the calendar quarters for which an assessment is due consistent with sections (2) and (5) of this rule, and shall submit a fiscal year reconciliation report that includes a reconciliation statement, audited financial statement, and any fiscal year reconciliation assessment payment based on the hospital's declared fiscal year end consistent with sections (3) and (5) of this rule. (2) The quarterly reports and quarterly assessment payments shall be based on estimated net revenue, which shall be referred to as estimated assessment. Estimated assessment is the amount of assessment the hospital expects to owe for the current calendar quarter. The hospital shall calculate the estimated assessment based on net revenues using the hospital's interim financial results for the quarter for which the assessment is due. An estimated quarterly report is due for each calendar quarter for which an assessment is due, based on the rate of assessment applicable to that quarter. The quarterly payment is due and shall be paid at the same time required for filing the quarterly report. (3) The fiscal year reconciliation report and fiscal year reconciliation assessment payment shall be based on the amount of assessment the hospital actually owes based on annual net revenue for all calendar quarters for which an estimated assessment payment is due during the hospital's declared fiscal year. The hospital shall calculate the annual net revenue for the hospital's declared fiscal year. The fiscal year reconciliation assessment payment due shall be the calculated assessment (using the assessment rate applicable to the appropriate quarter, described in subsection (c) below for fiscal year reconciliation assessment calculation purposes) on the annual net revenue reduced by the estimated assessment payments made for each assessment quarter of the hospital's declared fiscal year. The hospital shall provide all information required in the fiscal year reconciliation report when due, even if no fiscal year reconciliation assessment payment is owed: (a) When the fiscal year reconciliation report is submitted, it shall be accompanied by the hospital's declared fiscal year end audited financial statement for the declared fiscal year on which the fiscal year reconciliation report and fiscal year reconciliation assessment payments are based; (b) The fiscal year reconciliation report shall include a reconciliation statement describing the relationship between the audited financial statement and annual net revenues subject to the assessment. The reconciliation statement may be descriptive in form and shall be consistent with the accounting principles used in the audited financial statement; (c) The rate applicable to the final assessment shall be calculated as follows: (A) If all assessment quarters were subject to the same rate established in OAR 410-050-0160 and 410-050-0861, then the rate applicable to the final reconciliation is the assessment rate applicable to all such quarters. For example, if the hospital's declared fiscal year is July 1, 2004 to June 30, 2005, then the assessment rate is .93 percent of annual net revenue; (B) If different assessment rates apply to calendar quarters in the hospital's declared fiscal year, the hospital shall apply a blended rate to the total annual net revenue to determine the fiscal year reconciliation assessment due. A blended rate is the average of the rates applicable to all assessment quarters. The Authority shall notify the hospital of the amount of the applicable blended rate. For example, if the hospital's declared fiscal year overlaps two quarters assessed at a rate of .93 percent and two quarters assessed at .50 percent, then the blended rate for purposes of the annual reconciliation is .715 percent. For purposes of calculating the fiscal year reconciliation assessment due, the hospital shall multiply the annual net revenue by the blended rate. (d) If the total estimated assessment payments already paid by the hospital for the declared fiscal year exceed the amount of the fiscal year reconciliation assessment actually due, the fiscal year reconciliation report shall identify the difference and the hospital shall adjust the fiscal year reconciliation assessment due amount in the fiscal year reconciliation report for that assessment year; (e) The fiscal year reconciliation report, audited financial statement, and reconciliation statement shall be due and submitted to the Authority no later than the final day of the sixth calendar month after the hospital's declared fiscal year end. The fiscal year reconciliation assessment payment (if owed) is due and shall be paid at the same time required for filing the fiscal year reconciliation report. Failure to file or pay when due shall be a delinquency; (f) If the declared fiscal year end audited financial statement for the hospital is not available within the time required in subsection (e), a fiscal year reconciliation assessment payment (if owed) and fiscal year reconciliation report must be submitted within the time period specified under subsection (e). The hospital may use interim financial statements to determine the amount of the fiscal year reconciliation assessment due and may submit a justification statement with the fiscal year reconciliation report due no later than the date specified in subsection (e) signed by the hospital’s chief financial officer informing the Authority when the audited financial statement is due and certifying that an amended fiscal year reconciliation report, including the reconciliation statement, shall be provided to the Authority within 30 days of the hospital's receipt of the audited financial statement. Reports and payments made after the time period required in subsection (e) shall be submitted in compliance with OAR 401-050-0760; (g) If the hospital does not receive audited financial statements, then internal financial statements signed by the hospital's chief financial officer shall be submitted where these rules otherwise require audited financial statements; (h) If the effective date of the assessment is not at the start of the hospital's declared fiscal year, then the annual net revenue for the first fiscal year reconciliation report shall be calculated based on the number of quarters subject to the assessment versus the total number of quarters in the hospital's declared fiscal year. For example, if the assessment is effective on July 1, 2004 for a hospital with a declared fiscal year ending December 31, 2004, the annual net revenues shall be calculated as follows: total net revenues for the declared fiscal year divided by two (two of four quarters subject to the assessment). (4) The Authority may not find a payment deficiency for estimated quarterly assessments as long as the hospital paid the estimated assessments and submitted the quarterly report no later than the quarterly due date and the estimated assessment amount was not less than the equivalent of the assessment payment that would have been determined based on the hospital's annual net revenue for its most recent prior declared fiscal year divided by four and multiplied times the assessment rate for the quarter in which the actual estimated assessment is due. Annual net revenue for purposes of section (4) of this rule means the twelve month period in which the hospital's most recent prior declared fiscal year occurred, regardless of whether the prior quarters were subject to an assessment. For example, if the annual net revenue for the most recent prior declared fiscal year was $4 million; divide that total by 4 ($1 million) and multiply the product times the current assessment rate for the assessment quarter (.93 percent). In this example, the estimated quarterly assessment payment may not be less than $9,300 in order to receive the benefit of section (4) of this rule: (a) If the hospital seeks to use the process in section (4) of this rule, no later than the date on which the first quarterly estimated assessment and report is due (for example, December 13, 2004, for the first assessment quarter), the hospital shall provide the Authority with a copy of the hospital's audited financial statement for the hospital's most recent prior declared fiscal year and identify the hospital's annual net revenue amount for that declared fiscal year, regardless of whether any assessments were due for that year; (b) If the hospital does not receive audited financial statements, then internal financial statements from the hospital's most recent prior declared fiscal year signed by the chief financial officer may be used for this purpose. (5) All of the due dates for filing reports or paying assessments are established in OAR 410-050-0740, unless the Authority permits a later payment date. If a hospital requests an extension, the Authority, in its sole discretion, shall determine whether to grant an extension. There shall be a delinquency for each quarter the hospital fails to pay the estimated assessment or file the quarterly report when due. There shall be a delinquency if the hospital fails to pay the fiscal year reconciliation assessment or file the fiscal year reconciliation report, including financial statements and reconciliation statement, when due. (6) A hospital shall declare the date of the hospital's declared fiscal year end for purposes of establishing final assessment reporting requirements under this rule. The declaration shall be filed with the Authority no later than December 13, 2004, or the first date that an estimated quarterly report and assessment is due. The hospital shall notify the Authority within 30 days of a change to the hospital's declared fiscal year end. A change in declared fiscal year end shall be applied to the hospital's next future declared fiscal year for purposes of calculating the final assessment and filing the final report.