Health Care Delivery Assets

[AliciaK-GHC]

My company is an HMO that has a mail order pharmacy. We recently built the new mail order pharmacy in an administrative building that we lease. The area which houses the pharmaceutical supplies and inventory is currently being capitalized. We are treating the equipment that fills the prescriptions and the prescription inventory as an admitted asset in accordance with SSAP No. 73 but are unsure whether the cabinets and shelving that was installed as part of the mail order pharmacy would be considered a health care delivery asset and whether we can classify the portion of the building which is used for the mail order pharmacy as a health care facility. This may also allow us to admit various leasehold improvements in the building.

Can you assist?

[Bruce]

My reading of SSAP 73 would say yes/admit if "used for the direct delivery of health care services" and not for admin such as "claims processing, billing and maintenance of medical records." I suspect parts of your mail-order facilty are used for record-keeping, etc., so you'd probably have to do an analysis to demonstrate the admitted fixtures are related to delivery rather than admin.

Hope this helps. Your state regulator may be able to help with your particular situation - in the end, they are the ones who have to be satisfied that you have not overstated admitted assets.