Illinois Administrative Code › Title 77 - PUBLIC HEALTH › Part 1125 - LONG-TERM CARE › Subpart F - FINANCIAL AND ECONOMIC FEASIBILITY - REVIEW CRITERIA › Appendix B - Financial and Economic Review Standards

Current through Register Vol. 48, No. 28, July 12, 2024
a) Reasonableness of Project and Related Costs
				  Standards
1) Preplanning
Costs shall not exceed
				  1.8 %
				  of construction and modernization contracts plus contingencies plus equipment
				  costs.
2) Site Survey and Preparation
Costs shall not exceed 5% of construction and
				  contingency costs.
3) New Construction and Modernization Costs per
				  Gross Square Foot (GSF) Hospital and long-term care (LTC) cost standards are
				  derived from the RSMeans Building Construction Cost Data (Means) publication
				  (RSMeans, 63 Smiths Lane, PO Box 800, Kingston MA 02364-9988, 800/334-3509;
				  2008, no later amendments or editions included) and will be adjusted (for
				  inflation and location) for each project to the current year (
www.rsmeans.com
). Cost standards for the other
				  types of facilities are derived from the third quartile costs of previously
				  approved projects and are to be adjusted to the current year based upon
				  historic inflation rates from RSMeans.
HFSRB NOTE: HFSRB staff will review the cost per
				  square foot data submitted in the application to determine compliance with the
				  latest available cost standards of the RSMeans publication.
HFSRB NOTE: Modernization includes the build out
				  of leased space and shall include the cost of all capital improvements
				  contained in the terms of the lease. These standards are based on 2008
				  data.
Type of Facility
New Construction
Modernization
LTC (includes ICF/DD facilities)
Adjusted Means 3rd
							 Quartile
70% of Adjusted Means 3rd
							 Quartile
4) Contingencies
Contingency costs for projects (or for components
				  of projects) are based upon a percentage of new construction or modernization
				  costs and are based upon the status of a project's architectural contract
				  documents.
Status of Project
New Construction
Modernization
Contract Documents
Components
Components
Schematics
10%
10-15%
Preliminary
7%
7-10%
Final
3-5%
5-7%
5) New Construction or Modernization Fees and
				  Architectural & Engineering (A&E) Fees
Current fees for services for projects or
				  components of projects involving new construction or modernization (total
				  amount of construction and contingencies, A&E fees for LTC facilities and
				  total fees for site work) can be found in the Centralized Fee Negotiation
				  Professional Services and Fees Handbook (available at www.cdb.state.il.u [File
				  Link Not Available] or by contacting the Capital Development Board, 401 South
				  Spring Street, Springfield, Illinois 62706). HFSRB shall, for all calculations,
				  consider the latest version of the handbook as released on the Capital
				  Development Board website.
A) Projects or Components of Projects Involving
				  New Construction
Total Amount of Construction and
							 Contingencies
LTC Facilities
under $100,000
10.59 -15.89%
$ 200,000
9.99 -14.99%
$ 300,000
9.48 -14.22%
$ 400,000
9.03 -13.55%
$ 500,000
8.65 -12.99%
$ 700,000
8.21 -12.33%
$ 900,000
7.89 -11.85%
$ 1,000,000
7.79 -11.69%
$ 1,250,000
7.62 -11.44%
$ 1,500,000
7.49 -11.25%
$ 1,750,000
7.36 -11.06%
$ 2,500,000
7.06 -10.60%
$ 3,000,000
6.89 -10.35%
$ 5,000,000
6.42 -9.64%
$ 7,000,000
6.11 -9.17%
$ 9,000,000
5.94 -8.92%
$ 10,000,000
5.90
							 -8.86%
$ 15,000,000
5.76 -8.66%
$ 20,000,000
5.64 -8.48%
$ 25,000,000
5.52 -8.28%
$ 30,000,000
5.37 -8.07%
$ 40,000,000
5.12 -7.68%
$ 50,000,000
4.86 -7.30%
$100,000,000
3.59 -5.39%
and over
B) Projects or Components of Projects Involving
				  Modernization
Total Amount of Construction and
							 Contingencies
A&E Fees for LTC facilities
under $100,000
10.76 -16.16%
$ 200,000
10.16 -15.26%
$ 300,000
9.65 -14.49%
$ 400,000
9.20 -13.80%
$ 500,000
8.81-13.23%
$ 700,000
8.36 -12.56%
$ 900,000
8.04 -12.06%
$ 1,000,000
7.93 -11.91%
$ 1,250,000
7.76 -11.66%
$ 1,500,000
7.63 -11.45%
$ 1,750,000
7.50 -11.26%
$ 2,000,000
7.40 -11.12%
$ 2,500,000
7.19 -10.79%
$ 3,000,000
7.02 -10.54%
$ 5,000,000
6.54 -9.82%
$ 7,000,000
6.22 -9.34%
$ 9,000,000
6.04 -9.08%
$ 10,000,000
6.00 -9.02%
$ 15,000,000
5.87 -8.81%
$ 20,000,000
5.74 -8.62%
$ 25,000,000
5.62 -8.44%
$ 30,000,000
5.48 -8.22%
$ 40,000,000
5.21 -7.83%
$ 50,000,000
4.95 -7.43%
$100,000,000
3.65 -5.49%
and over
6) Capital Equipment Not Included in Construction
				  Contracts
Standards for capital equipment not included in
				  construction contracts are established by type of facility and are derived from
				  the third quartile costs of previously approved projects for which data are
				  available. The standards apply only to the following types of projects:
				  establishment of new facilities, expansion of existing facilities (e.g., bed
				  additions, station additions, or operating/treatment room additions), and
				  modernization of existing facilities involving replacement of existing beds,
				  relocation of existing facilities, replacement of ASTC operating or procedure
				  room equipment, etc. The standards below are calculated for the year 2008.
				  These will be inflated to the current year using the inflation of major medical
				  equipment by the department. (Long-Term Care standard includes ICF/DD.)
HFSRB NOTE: Modernization includes the build out
				  of leased space and shall include the cost of capital equipment included in the
				  terms of the lease.
LTCs per Bed
$6,491
7) Inflation Factor
Costs for construction and modernization contracts
				  and equipment are to be adjusted for projected inflation. The projected
				  inflation rate is to be calculated to the midpoint of construction. For
				  construction midpoint of up to 3 years, the inflation rate shall be an average
				  of the previous 3 years annual inflation rates for construction as determined
				  by RSMeans. For construction midpoints beyond 3 years, the inflation rate shall
				  be the lesser of this rate or 3% for the period of time beyond 3 years.
b) Financial Viability Standards
1) Current Ratio = Current Assets/Current
				  Liabilities
Type of Long-Term Care (including ICF/DD)
							 Facilities:
Not-For-Profit, System
1.5 or
							 more
Not-For-Profit, Non-System
1.5 or
							 more
For-Profit, System
1.5 or
							 more
For-Profit, Non-System
1.5 or
							 more
Governmental
1.5 or
							 more
2) Net Margin Percentage = (Net Income/Net
				  Operating Revenues) X 100
Type of Long-Term Care (including ICF/DD)
							 Facilities:
Not-For-Profit, System
2.5 % or more
Not-For-Profit, Non-system
2.5% or more
For-Profit, System
2.5% or more
For-Profit, Non-system
2.5% or more
Governmental
0% or more
HFSRB NOTE: Net Margin Percentage for For-Profits
				  is before the provision for income taxes. Net income is the excess of revenues
				  over expenses from operations, before non-recurring income or expense.
3) Long-Term Debt to Capitalization = (Long-Term
				  Debt/Long-Term Debt plus Net Assets) X 100
Type of Long-Term Care (including ICF/DD)
							 Facilities:
Not-For-Profit, System
80% or less
Not-For-Profit, Non-system
80% or less
For-Profit, System
50% or less
For-Profit, Non-system
50% or less
Governmental
NA
HFSRB NOTE: For long-term care facilities and
				  for-profit facilities, the applicant shall explain the rationale of the use of
				  debt rather than the issuance of stock (if this is the case).
4) Projected Debt Service Coverage = Net Income
				  plus (Depreciation plus Interest plus Amortization)/Principal Payments plus
				  Interest Expense for the Year of Maximum Debt Service after Project Completion
Type of Long-Term Care (including ICF/DD)
							 Facilities:
Not-For-Profit, System
1.5 or
							 more
Not-For-Profit, Non-system
1.5 or
							 more
For-Profit, System
1.5 or
							 more
For-Profit, Non-system
1.5 or
							 more
Governmental
1.5 or
							 more
HFSRB NOTE: Net Income is the excess of revenues
				  over expenses from operations, before non-recurring income or expense.
5) Days Cash on Hand = (Cash plus Investments plus
				  Board Designated Funds)/(Operating Expense less Depreciation Expense)/365 days
Type of Long-Term Care (including ICF/DD)
							 Facilities:
Not-For-Profit, System
45 or more days
Not-For-Profit, Non-system
45 or more days
For-Profit, System
45 or more days
For-Profit, Non-system
45 or more days
Governmental
45 or more days
HFSRB NOTE: Days Cash on Hand ratio can be a
				  combination of cash and investments held by the facilities or available funds
				  from the backup line of credit.
6) Cushion Ratio = (Cash plus Investments plus
				  Board Designated Funds)/(Principal Payments plus Interest Expense) for the year
				  of maximum debt service after project completion
Type of Long-Term Care (including ICF/DD)
							 Facilities:
Not-For-Profit, System
3.0 or more
Not-For-Profit, Non-system
3.0 or more
For-Profit, System
3.0 or more
For-Profit, Non-system
3.0 or more
Governmental
NA
HFSRB NOTE: The applicant may also include in the
				  numerator the amount of funds available from an existing or proposed backup
				  line of credit. If the applicant includes funds available from a line of
				  credit, documentation shall be provided regarding the terms and conditions of
				  the line.