NY State Senate Bill 2011-S7354

Senate Bill S7354

2011-2012 Legislative Session

Directs the commissioner of health to establish a demonstration program authorizing private capital investments and private equity interests in hospitals

download bill text pdf

Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 02, 2012	referred to health

2011-S7354 (ACTIVE) - Details

Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §2801-a, Pub Health L
Versions Introduced in 2013-2014 Legislative Session:: S2946

2011-S7354 (ACTIVE) - Summary

Directs the commissioner of health to establish a demonstration program authorizing private capital investments and private equity interests in hospitals.

2011-S7354 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7354

TITLE OF BILL:
An act
to amend the public health law, in relation to authorizing the
establishment of private equity hospitals

PURPOSE:
Directs the commissioner of health to establish a demonstration
program authorizing private capital investments and private equity
interests in hospitals.

SUMMARY OF PROVISIONS:
Section one amends §2801-a to require the commissioner of health to
establish, on or before March 1, 2013, a program whereby the
Department of Health (DOH) may accept applications for demonstration
projects around the state to develop, evaluate and implement a
flexible approach allowing private capital investments and private
equity interests in hospitals. This section also sets forth criteria
which applicants must demonstrate in order to be eligible for this
program. All demonstrations approved by the commissioner must provide
detailed annual reports.

Section two provides that this act shall take effect immediately.

JUSTIFICATION:

Many health care facilities in New York State suffer from inadequate
investment for capital improvements, upgrades and expansion. Private
equity is a source of such fund in many sectors, but in New York's
health care sector, such investing is limited. By statute ownership
is limited to individuals who are subject to character and competence
reviews. This bill provides, on a demonstration basis, the ability
for a limited liability corporation to provide an invest and hold an
equity interest in a hospital. This would not be the first venture
into private ownership of health care facilities for New York.
Several years ago certain diagnostic and treatment centers, which
provide dialysis services, were granted an exception due to the
severe shortage of service providers. That exemption has proven
successful in assuring access to quality services. The
instant legislation is designed to build on that success and proving
similarly needing capital to hospitals.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately.

2011-S7354 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7354

                            I N  S E N A T E

                               May 2, 2012
                               ___________

Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health

AN ACT to amend the public health law, in relation  to  authorizing  the
  establishment of private equity hospitals

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 2801-a of the  public  health  law  is  amended  by
adding a new subdivision 17 to read as follows:
  17.  (A)  THE COMMISSIONER SHALL ESTABLISH, NO LATER THAN MARCH FIRST,
TWO THOUSAND THIRTEEN, A  PROGRAM  WHEREBY  THE  DEPARTMENT  MAY  ACCEPT
APPLICATIONS  FOR  DEMONSTRATION  PROJECTS  AROUND THE STATE TO DEVELOP,
EVALUATE AND IMPLEMENT A FLEXIBLE APPROACH TO ALLOWING  PRIVATE  CAPITAL
INVESTMENTS  AND PRIVATE EQUITY INTERESTS IN HOSPITALS.  IN LIGHT OF THE
SEVERE CONSTRAINTS ON THE AVAILABILITY OF  INVESTMENT  CAPITAL  FOR  THE
HEALTH CARE SYSTEM IN NEW YORK, DEMONSTRATION PROJECTS SHALL BE DESIGNED
TO  PROMOTE  THE DEVELOPMENT OF NEW SOURCES OF CAPITAL FOR THE OPERATION
OF HOSPITALS AND TO EVALUATE THE IMPACT PRIVATE EQUITY INVESTMENT HAS ON
THE QUALITY OF CARE, ACCESS TO CARE AND BENEFIT  TO  THE  HOSPITAL,  ITS
PATIENTS AND THE SURROUNDING COMMUNITY. THE COMMISSIONER MAY, IN APPROV-
ING  A DEMONSTRATION PROJECT, WAIVE THE PROVISIONS OF THIS SECTION WHICH
RELATE TO THE OWNERSHIP STRUCTURE, PROVIDED THE PUBLIC HEALTH AND HEALTH
PLANNING COUNCIL SHALL APPROVE SUCH PROJECT.
  (B) APPLICANTS SHALL AT A MINIMUM DEMONSTRATE THAT:
  (I) THE FACILITY OR FACILITIES HAVE HISTORIES OF PROVIDING HIGH QUALI-
TY CARE;
  (II) THE PROJECT IS COMMITTED TO PRESERVING QUALITY,  ACCESS  TO  CARE
AND ACCEPTANCE OF A BROAD MIX OF PAYOR TYPES;
  (III) THE PROJECT WILL PROVIDE A POSITIVE BENEFIT TO THE HOSPITAL, ITS
PATIENTS AND THE COMMUNITY AT LARGE; AND
  (IV)  ALL  APPLICABLE DUTIES, PROCEDURES, OBLIGATIONS AND REQUIREMENTS
APPLICABLE TO PUBLIC HOSPITALS IN NEW YORK INCLUDING, BUT NOT LIMITED TO
CHARITABLE CARE AND SUPPORT, COMMUNITY PLANS AND OBLIGATIONS,  PROVISION
OF  CARE  TO  THOSE IN NEED AND ALL ATTAINMENT OF QUALITY CARE STANDARDS
SET FORTH IN THIS CHAPTER WILL BE ADHERED TO.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD15631-02-2

S. 7354                             2

  (C) HOSPITALS PARTICIPATING IN THIS  DEMONSTRATION  PROGRAM  SHALL  BE
SUBJECT  TO ALL OPERATING STANDARDS AS SET FORTH IN THIS CHAPTER AND THE
REGULATIONS PROMULGATED PURSUANT THERETO, AND SHALL BE  SUBJECT  TO  ANY
PROVISIONS OF THIS CHAPTER FOR FAILURE TO COMPLY WITH SUCH STANDARDS.
  (D)  DEMONSTRATION PROJECTS APPROVED BY THE COMMISSIONER SHALL PROVIDE
DETAILED REPORTING NO LESS THAN ANNUALLY TO THE DEPARTMENT IN A FORM AND
MANNER TO BE DETERMINED BY THE COMMISSIONER  TO  INSURE  THE  GOALS  ARE
BEING  MET.  THE  COMMISSIONER SHALL PROVIDE THE GOVERNOR, THE TEMPORARY
PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY WITH  A  WRITTEN
REPORT  ON  THE PROGRAM, INCLUDING DETAILS OF ALL APPLICATIONS RECEIVED,
THE BASIS FOR APPROVAL OR DENIAL OF THE APPLICATIONS, AND A FULL  EVALU-
ATION  OF  DEMONSTRATION PROJECTS WHICH WERE APPROVED BASED ON THE GOALS
OF THE PROGRAM NO LATER THAN TWO YEARS AFTER THE  FIRST  HOSPITAL  MAKES
APPLICATION UNDER THE DEMONSTRATION PROGRAM.
  S 2. This act shall take effect immediately.

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