Sec 36-125.04. Financial statements; uniform accounting report; exemption

A. Each licensed hospital shall submit to the department an annual financial statement prepared in accordance with generally accepted accounting principles. The statement shall be accompanied by a report of an audit by an independent certified public accountant of the financial statement conducted in accordance with generally accepted auditing standards. Each hospital shall submit the statement within one hundred twenty days of the end of its fiscal year unless the director grants an extension in writing in advance of that date.

B. If a hospital is part of a consolidated or combined group and is normally included in that group's financial statement, the hospital may submit a consolidated or combined statement if the group's statement identifies each of the group's separately licensed hospitals and nursing care institutions operating in this state. For each hospital or nursing care institution operating in this state and for each additional operating unit which accounts for five per cent or more of the consolidated or combined group's gross revenues, the statement shall include financial balances and information for that unit including a balance sheet, an income statement, a statement of changes in equity or fund balance and a statement of cash flows. This information shall be presented as "other financial information" in columnar format in the details of consolidation or combination. All other operating units of the group may be included in a single column labeled "other" provided that a footnote identifies each unit and the gross revenue associated with each unit. The financial information for each hospital included in a consolidated or combined financial statement shall reflect financial balances and information for only the hospital and shall not include nonhospital operations.

C. Each hospital, nursing care institution and hospice shall submit a uniform accounting report to the department annually that includes the following:

1. A balance sheet detailing the assets, liabilities and net worth.

2. A statement of income and expenses.

3. A statement of cash flows.

4. A copy of annual financial and statistical documents submitted to the United States department of health and human services in accordance with the requirements of title XVIII and title XIX of the social security act.

5. Utilization and staffing information and standard units of measure as prescribed by rules.

D. In place of the information required by subsection C, the director may permit a health care institution to file current cost reports and financial information that the institution files for other governmental reporting purposes, except that a health care institution shall file all information required by the Arizona health care cost containment system administration pursuant to title XVIII or XIX of the social security act. The department may require by rule the submission of additional information or schedules to supplement the alternative cost reports and financial information.

E. In addition to the information prescribed in subsection C, a hospital shall also include with its title XVIII cost report all pertinent data, separately stated, on the title XIX program and the state-only funded medical programs under the Arizona health care cost containment system. A hospital may request a one year waiver from the department if logs and financial systems need to be changed in order to comply with this subsection.

F. The department shall prescribe and furnish forms for the uniform accounting report submitted pursuant to subsection C.

G. All reports filed pursuant to this section are open to public inspection at the offices of the department. The department shall ensure that this public access to reports does not breach confidentiality of privileged medical information or privileged information on an individual's work performance or earnings.

H. If further investigation is considered necessary or desirable to verify the accuracy of information in reports filed pursuant to this section, the department may further examine records and accounts related to the reporting requirements of this section. The department shall bear the cost incurred in connection with this examination unless the department finds that the records examined are significantly deficient or incorrect, in which case the department may charge the cost of the investigation to the facility examined.

I. This section does not apply to a facility owned or operated by this state.