NY State Senate Bill 2017-S8395

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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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 04, 2018	referred to health

2017-S8395 (ACTIVE) - Details

See Assembly Version of this Bill:: A11170
Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §§2801-a, 2802, 3605 & 3611-a, Pub Health L

2017-S8395 (ACTIVE) - Summary

Relates to streamlining and adding criteria to the certificate of need process by the public health and health planning council.

2017-S8395 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8395

SPONSOR: HANNON
 
TITLE OF BILL:  An act to amend the public health law, in relation to
streamlining and adding criteria to the certificate of need process

 
PURPOSE OF THE BILL:

To streamline and enhance the Certificate of Need (CON) process by:  (1)
permitting approval of applications to establish and construct primary
care clinics without review of the public need for the facility or the
financial resources tied to the project; (2) permitting construction
projects to be approved without review of public need or financial
resources if they do not involve changes in services or major medical
equipment or replacement of a facility; (3) clarifying technical refer-
ences related to certain construction applications; (4) rationalizing
the character and competence review conducted for establishment applica-
tions under Public Health Law (PHL) Article 28; (5) authorizing the
Commissioner of Health (Commissioner) to establish minimum experience
requirements for proposed owners and operators seeking establishment
under PHL Articles 28 and 36; and (6) strengthening provisions related
to the review of transfers of ownership interests under PHL Articles 28

and 36.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill would amend Public Health Law § 2801-a(3) to clar-
ify that the list of individuals whose character and competence must be
considered by the Public Health and Health Planning Council (PHHPC)
during review of an establishment application includes principal members
of limited liability companies (LLCs) and principal stockholders of
corporations.

Section 1 also would reduce the look-back period for the review of char-
acter and competence under PHL Article 28 with respect to proposed
incorporators, directors, sponsors, members, principal members, stock-
holders, principal stockholders, or operators who were previously affil-
iated with another licensed facility view from ten to seven years.

Section 1 also would provide that if a proposed incorporator, director,
sponsor, member, principal member, stockholder, principal stockholder,
or operator was affiliated during the look-back period with a facility
that did not provide "a substantially high level of care" due to
violations of hospital regulations, the individual can demonstrate, and
PHHPC can find, that that the violations should not be attributed to the
action or inaction of the individual due to the timing, extent or manner
of the affiliation.

Section 2 of the bill would add a new PHL § 2801-a(3-b) to authorize
PHHPC to approve the establishment of diagnostic and treatment centers
(D&TCs) that provide primary care without an assessment of public need
or financial feasibility.

Section 3 of the bill would add a new PHL § 2801(3-c) to authorize the
Commissioner to establish in regulation minimum requirements for the
experience of individuals associated with an application to establish a
nursing home, which will factor into the review of character and compe-
tence conducted by PHHPC.

Section 4 of the bill would amend PHL § 2801-a(4)(b) and (c) to elimi-
nate distinctions between types of business organizations by providing
that: (1) the transfer of more than 10 percent of the voting rights or
ownership interest of a partnership, limited liability company (LLC), or
corporation to a person or entity not previously approved by PHHPC is
subject to PHHPC approval; (2) PHHPC approval is not required for a
transfer of less than ten percent of the voting rights or ownership
interest, but at least 90 days' notice of the transfer is required and
PHHPC can bar the transfer for certain reasons enumerated in the stat-
ute; and (3) PHHPC approval is not required for transfers of more than a
ten percent interest to persons or entities previously approved by
PHHPC, but at least 90 days' notice of the transfer is required and
PHHPC can bar the transfer for reasons it specifies.

Section 5 of the bill would amend PHL § 2802(2) to authorize the Commis-
sioner to approve applications by general hospitals and D&TCs that
provide primary care services to construct a facility without assessing
public need. The amendment also would permit the Commissioner to approve
construction applications for general hospitals and D&TCs without
assessing public need when the application does not involve a change
related to: (1) capacity; (2) the types of services provided; (3) major
medical equipment; (4) facility replacement; or (5) the geographic
location of service.

Section 5 also would amend PHL § 2802(3) to permit, rather than require,
the Commissioner to consider an applicant's financial resources and
future revenue sources when reviewing the two types of construction
applications referenced in the amendment to PHL § 2802(2).

Section 6 of the bill would amend PHL § 3506(4) to authorize the Commis-
sioner to establish in regulation minimum competency requirements for
proposed operators of home care services agencies.

Section 7 of the bill would amend PHL § 3611-a to eliminate distinctions
between operators that are partnerships and LLCs and corporations. In
addition, the section would clarify that the requirement of 90 days'
notice applies both to transfers of less than ten percent and to trans-
fers to persons or entities previously approved by PHHPC.

Section 8 of the bill provides that it would take effect immediately.

 
JUSTIFICATION:

The review of applications for hospital establishment and construction
is generally referred to as the Certificate of Need (CON) process, the
objectives of which are to align health care resources with community
health needs, preserve and promote access to high quality health care,
and control utilization to promote cost-effective health care. This bill
would promote efficiencies in the CON process by exempting certain
projects from the review of public need and financial feasibility,
rationalizing and strengthening the review of character and competence,
and promoting transparency in the review of transfers of ownership
interests for established providers.

First, the bill would add new PHL § 2801-a(3-b) to authorize PHHPC to
approve the establishment of D&TCs that provide primary care without
requiring a full assessment of public need or financial feasibility.
Further, the bill would amend PHL § 2802(2) and (3) to permit the
Commissioner to approve construction applications for general hospitals
and D&TCs that provide primary care services without assessing public
need. These changes would help promote access to primary care.

Second, the bill also would amend PHL § 2802(2) and (3) to permit the
Commissioner to approve a construction application submitted by a gener-
al hospital or D&TC without assessing public need or financial feasibil-
ity when the application does not involve: (1) a change in the provid-
er's approved capacity; (2) a change in the types of services provided;
(3) the acquisition of major medical equipment; (4) a change in the
geographic location where services are provided; or (5) the replacement
of a facility. It is generally unnecessary to consider public need or
financial feasibility with regard to the type of facility construction
that does not involve one of the enumerated changes and therefore it is
appropriate to remove these as required areas of consideration. However,
the language would still permit the Commissioner to undertake a review
of those areas if appropriate.

Third, the bill would further streamline the CON process with respect to
the review of character and competence for proposed incorporators,
directors, sponsors, members, principal members, stockholders, principal
stockholders, and operators previously affiliated with licensed provid-
ers, first by amending PHL § 2801-a(3) to shorten the look-back period
from ten to seven years. Reviewing older information does not necessar-
ily add value to the review process, particularly when the nature of the
affiliation may not be direct, and requires the use of Department
resources.

Additionally, the bill would amend PHL § 2801-a(3) to provide that
proposed incorporators, directors, sponsors, members, principal members,
stockholders, principal stockholders, or operators could demonstrate,
and PHHPC could find, that violations by a facility with which they were
affiliated during the look-back period should not be attributed to them
due to the timing, extent or manner of the affiliation. This would
prevent proposed incorporators, directors, sponsors, members, principal
members, stockholders, principal stockholders, or operators from being
tainted by the non-compliant conduct of a provider in cases where,
despite the affiliation, they reasonably should not be held responsible
for such lack of compliance.

Fourth, the bill would authorize the Commissioner to establish in regu-
lation minimum experience thresholds for the individuals connected to
the operation of a nursing home or a home care services agency for which
establishment approval is sought. Such thresholds may include: (1)
defining the type of prior experience required; (2) establishing a mini-
mum period of time during which such prior experience was obtained; and
(3) establishing a minimum percentage of the ownership interest and/or
voting rights of the applicant that must be held by an individual who
meets such minimum experience requirements. This would help promote
competence in the operation of nursing homes and home care agencies by
allowing the Department to clarify the level of experience expected in
the ownership and operation of such providers.

Fifth, the bill further would promote transparency and eliminate
distinctions between different types of business organizations in regard
to the transfer of ownership interests of operators of facilities
licensed under PHL Article 28. Specifically, the bill would amend PHL §
2801-a(4)(b) to provide that any transfer of voting rights or ownership
interests greater than ten percent to a person or entity not previously
approved by PHHPC would be subject to PHHPC approval, regardless of the
type of business organization. Under PHL § 280l -a(4)(c), 90 days'
notice of transfers of voting rights or ownership interests of less than
ten percent would have to be provided to PHHPC, regardless of the type
of business entity.

If the transfer is to a person or entity not previously approved by
PHHPC, PHHPC could determine to bar the transfer: (1) if it would reduce
the facility's equity position; (2) if it would give an interest to a
person convicted of certain felonies; (3) if it would raise a question
as to character and competence, or (4) upon recommendation of the
Department, it would take the aggregate transfers of interest in the
facility to more than 25 percent in a five-year period. If the transfer
is to a person or entity previously approved by PHHPC, PHHPC could
determine to bar the transfer for any reasons that it specifies. The
bill would specify than in any case, the failure to obtain approval or
provide notice as applicable would subject the provider's operating
certificate to revocation or suspension.

Similar amendments to PHL § 3611-a(1) and (2) would eliminate
distinctions between types of business organization that operate home
care services agencies and clarify that the requirement of 90 days'
notice applies both to transfers of less than ten percent and to trans-
fers to persons or entities previously approved by PHHPC.  Section 8
also would clarify that in the absence of approval by PHHPC or the
provision of notice to PHHL as required, the license or certificate of
approval shall be subject to revocation or suspension.

 
PRIOR LEGISLATIVE HISTORY:

Versions of this bill were included in the 2013-14 Executive Budget, the
2014-15 Executive Budget (S.6358-B/A.8558-B, Part A, § 18), and the
2015-16 Executive Budget (Part H, § 1), but were not enacted.

 
FISCAL IMPLICATIONS:

None of the foregoing proposals are anticipated to result in a direct
fiscal impact. However, all may support savings to the overall health
system by streamlining administrative processes and facilitating access
to primary care.

 
EFFECTIVE DATE:
Immediately.

2017-S8395 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8395
 
                             I N  S E N A T E
 
                                May 4, 2018
                                ___________
 
 Introduced by Sen. HANNON -- (at request of the Department of Health) --
   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  streamlining  and
   adding criteria to the certificate of need process
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 3 of section 2801-a of the public  health  law,
 as amended by section 57 of part A of chapter 58 of the laws of 2010, is
 amended to read as follows:
   3.  The  public health and health planning council shall not approve a
 certificate of incorporation, articles of  organization  or  application
 for  establishment  unless it is satisfied, insofar as applicable, as to
 (a) the public need for the existence of the institution at the time and
 place and under the circumstances proposed, provided, however,  that  in
 the  case of an institution proposed to be established or operated by an
 organization defined in subdivision one of section one hundred  seventy-
 two-a  of  the  executive law, the needs of the members of the religious
 denomination concerned, for care or treatment in accordance  with  their
 religious or ethical convictions, shall be deemed to be public need; (b)
 the  character,  competence,  and  standing  in  the community[,] of the
 proposed incorporators, directors, sponsors, MEMBERS, PRINCIPAL MEMBERS,
 stockholders,  [members]  PRINCIPAL  STOCKHOLDERS,  or  operators;  with
 respect to any proposed incorporator, director, sponsor, MEMBER, PRINCI-
 PAL MEMBER, stockholder, [member] PRINCIPAL STOCKHOLDER, or operator who
 is  already  or within the past [ten] SEVEN years has been an incorpora-
 tor, director, sponsor, member, PRINCIPAL MEMBER, principal stockholder,
 [principal member,] or operator of  any  hospital,  private  proprietary
 home  for  adults, residence for adults, or non-profit home for the aged
 or blind which has been issued an operating  certificate  by  the  state
 department of social services, or a halfway house, hostel or other resi-
 dential  facility  or  institution for the care, custody or treatment of
 the mentally disabled which is subject to approval by the department  of
 mental  hygiene,  no  approval shall be granted unless the public health
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD14492-01-8

 S. 8395                             2
 
 and health planning council, having afforded an adequate opportunity  to
 members  of  health systems agencies, if any, having geographical juris-
 diction of the area where the institution is to be located to be  heard,
 shall  affirmatively find by substantial evidence as to each such incor-
 porator, director, sponsor, MEMBER, PRINCIPAL MEMBER,  principal  stock-
 holder,  or  operator that a substantially consistent high level of care
 is being or was being rendered in each such hospital,  home,  residence,
 halfway house, hostel, or other residential facility or institution with
 which  such  person is or was affiliated; for the purposes of this para-
 graph, the public health and health planning council shall  adopt  rules
 and  regulations, subject to the approval of the commissioner, to estab-
 lish the criteria to  be  used  to  determine  whether  a  substantially
 consistent high level of care has been rendered, provided, however, that
 there  shall not be a finding that a substantially consistent high level
 of care has been rendered where there have been violations of the  state
 hospital  code,  or  other  applicable  rules  and regulations, that (i)
 threatened to directly affect the  health,  safety  or  welfare  of  any
 patient  or  resident,  and  (ii)  were  recurrent  or were not promptly
 corrected, UNLESS THE PROPOSED INCORPORATOR, DIRECTOR, SPONSOR,  MEMBER,
 PRINCIPAL MEMBER, STOCKHOLDER, PRINCIPAL STOCKHOLDER, OR OPERATOR DEMON-
 STRATES,  AND  THE PUBLIC HEALTH AND HEALTH PLANNING COUNCIL FINDS, THAT
 THE VIOLATIONS CANNOT BE ATTRIBUTED TO THE ACTION OR  INACTION  OF  SUCH
 PROPOSED  INCORPORATOR,  DIRECTOR,  SPONSOR,  MEMBER,  PRINCIPAL MEMBER,
 STOCKHOLDER, PRINCIPAL STOCKHOLDER,  OR  OPERATOR  DUE  TO  THE  TIMING,
 EXTENT OR MANNER OF SUCH AFFILIATION; (c) the financial resources of the
 proposed  institution  and  its sources of future revenues; and (d) such
 other matters as it shall deem pertinent.
   § 2. Section 2801-a of the public health law is amended  by  adding  a
 new subdivision 3-b to read as follows:
   3-B.  NOTWITHSTANDING  ANY  OTHER  PROVISIONS  OF  THIS CHAPTER TO THE
 CONTRARY, THE PUBLIC HEALTH AND HEALTH PLANNING COUNCIL MAY APPROVE  THE
 ESTABLISHMENT  OF DIAGNOSTIC OR TREATMENT CENTERS TO BE ISSUED OPERATING
 CERTIFICATES FOR THE PURPOSE OF PROVIDING PRIMARY CARE,  AS  DEFINED  BY
 THE  COMMISSIONER  IN REGULATIONS, WITHOUT REGARD TO THE REQUIREMENTS OF
 PUBLIC NEED AND FINANCIAL RESOURCES AS SET FORTH IN SUBDIVISION THREE OF
 THIS SECTION.
   § 3. Section 2801-a of the public health law is amended  by  adding  a
 new subdivision 3-c to read as follows:
   3-C.  NOTWITHSTANDING  ANY  OTHER  PROVISIONS  OF  THIS CHAPTER TO THE
 CONTRARY, THE COMMISSIONER IS  AUTHORIZED  TO  ESTABLISH  IN  REGULATION
 MINIMUM  THRESHOLDS FOR THE LEVEL OF EXPERIENCE THAT MUST BE MET AS PART
 OF THE PUBLIC HEALTH AND HEALTH PLANNING COUNCIL'S CONSIDERATION OF  THE
 CHARACTER,  COMPETENCE  AND  STANDING  IN  THE COMMUNITY OF THE PROPOSED
 INCORPORATORS, DIRECTORS, SPONSORS, STOCKHOLDERS, MEMBERS  OR  OPERATORS
 OF  A  RESIDENTIAL  HEALTH  CARE  FACILITY  PURSUANT TO PARAGRAPH (B) OF
 SUBDIVISION THREE OF THIS SECTION. SUCH THRESHOLDS MAY INCLUDE  BUT  ARE
 NOT  LIMITED TO: (A) DEFINING THE TYPE OF PRIOR EXPERIENCE REQUIRED; (B)
 ESTABLISHING A MINIMUM PERIOD OF TIME DURING WHICH SUCH PRIOR EXPERIENCE
 WAS OBTAINED; AND (C) ESTABLISHING A MINIMUM PERCENTAGE OF THE OWNERSHIP
 INTEREST AND/OR VOTING RIGHTS OF THE APPLICANT THAT MUST BE HELD  BY  AN
 INDIVIDUAL WHO MEETS SUCH MINIMUM EXPERIENCE REQUIREMENTS.
   §  4. Paragraphs (b) and (c) of subdivision 4 of section 2801-a of the
 public health law, as amended by section 57 of part A of chapter  58  of
 the laws of 2010, are amended to read as follows:
   (b) [(i)] Any transfer, assignment or other disposition of ten percent
 or more of [an] DIRECT OR INDIRECT interest or voting rights in [a part-

 S. 8395                             3

 nership  or  limited  liability  company, which is the] AN operator of a
 hospital to a new partner [or], member, OR STOCKHOLDER, OR ANY TRANSFER,
 ASSIGNMENT OR OTHER DISPOSITION OF A  DIRECT  OR  INDIRECT  INTEREST  OR
 VOTING  RIGHTS  OF  SUCH  AN  OPERATOR WHICH RESULTS IN THE OWNERSHIP OR
 CONTROL OF MORE THAN TEN PERCENT OF THE INTEREST  OR  VOTING  RIGHTS  OF
 SUCH  OPERATOR  BY  ANY  PARTNER,  MEMBER, OR STOCKHOLDER NOT PREVIOUSLY
 APPROVED BY THE PUBLIC HEALTH AND HEALTH PLANNING COUNCIL FOR THAT OPER-
 ATOR shall be approved by the public health and health planning council,
 in accordance with the provisions of subdivisions two and three of  this
 section,  except  that:  (A)  any  such  change  shall be subject to the
 approval by the public health and health planning council in  accordance
 with  paragraph  (b)  of  subdivision  three  of  this section only with
 respect to the new partner [or], member, OR STOCKHOLDER, and any remain-
 ing partners [or], members, OR STOCKHOLDERS who have not been previously
 approved for that facility in accordance with such  paragraph,  and  (B)
 such  change  shall not be subject to paragraph (a) of subdivision three
 of this section. IN THE ABSENCE OF SUCH APPROVAL, THE OPERATING  CERTIF-
 ICATE OF SUCH HOSPITAL SHALL BE SUBJECT TO REVOCATION OR SUSPENSION.
   [(ii)]  (C)(I)  With  respect to a transfer, assignment or disposition
 involving less than ten percent of [an] A DIRECT OR INDIRECT interest or
 voting rights in [such partnership  or  limited  liability  company]  AN
 OPERATOR OF A HOSPITAL to a new STOCKHOLDER, partner or member, no prior
 approval  of  the  public  health  and  health planning council shall be
 required. However, no such transaction  shall  be  effective  unless  at
 least  ninety  days  prior  to  the intended effective date thereof, the
 [partnership or limited liability company] OPERATOR fully completes  and
 files  with  the  public  health and health planning council notice on a
 form, to be developed by the public health and health planning  council,
 which shall disclose such information as may reasonably be necessary for
 the  public  health  and health planning council to determine whether it
 should bar the transaction for any of the reasons set forth in item (A),
 (B), (C) or (D) below. Within ninety days from the date  of  receipt  of
 such  notice,  the public health and health planning council may bar any
 transaction under this subparagraph: (A) if the equity position  of  the
 [partnership  or  limited  liability  company]  OPERATOR,  determined in
 accordance with  generally  accepted  accounting  principles,  would  be
 reduced  as  a result of the transfer, assignment or disposition; (B) if
 the transaction would result in  the  ownership  of  a  [partnership  or
 membership]  DIRECT OR INDIRECT interest OR VOTING RIGHTS by any persons
 who have been convicted of a felony described  in  subdivision  five  of
 section  twenty-eight  hundred  six  of  this  article; (C) if there are
 reasonable grounds to believe that the  proposed  transaction  does  not
 satisfy  the  character and competence criteria set forth in subdivision
 three of this section; or (D) UPON THE RECOMMENDATION OF THE DEPARTMENT,
 if the transaction, together with all transactions under  this  subpara-
 graph for the [partnership] OPERATOR, or successor, during any five year
 period  would,  in the aggregate, involve twenty-five percent or more of
 the interest in the [partnership] OPERATOR. The public health and health
 planning council shall state specific reasons  for  barring  any  trans-
 action  under  this  subparagraph  and shall so notify each party to the
 proposed transaction.
   [(iii) With respect to a transfer, assignment  or  disposition  of  an
 interest  or  voting  rights  in  such  partnership or limited liability
 company to any remaining partner or member, which  transaction  involves
 the withdrawal of the transferor from the partnership or limited liabil-
 ity  company, no prior approval of the public health and health planning

 S. 8395                             4

 council shall be required. However, no such transaction shall be  effec-
 tive  unless  at  least ninety days prior to the intended effective date
 thereof, the partnership or limited liability  company  fully  completes
 and files with the public health and health planning council notice on a
 form,  to be developed by the public health and health planning council,
 which shall disclose such information as may reasonably be necessary for
 the public health and health planning council to  determine  whether  it
 should bar the transaction for the reason set forth below. Within ninety
 days  from  the  date  of  receipt of such notice, the public health and
 health planning council may bar any transaction under this  subparagraph
 if  the equity position of the partnership or limited liability company,
 determined in accordance with generally accepted accounting  principles,
 would be reduced as a result of the transfer, assignment or disposition.
 The  public  health  and  health  planning  council shall state specific
 reasons for barring any transaction under this subparagraph and shall so
 notify each party to the proposed transaction.
   (c) Any transfer, assignment or other disposition of  ten  percent  or
 more  of the stock or voting rights thereunder of a corporation which is
 the operator of a hospital or which is a member of a  limited  liability
 company which is the operator of a hospital to a new stockholder, or any
 transfer,  assignment or other disposition of the stock or voting rights
 thereunder of such a corporation  which  results  in  the  ownership  or
 control  of  more  than ten percent of the stock or voting rights there-
 under of such corporation by any person not previously approved  by  the
 public  health and health planning council, or its predecessor, for that
 corporation shall be subject to approval by the public health and health
 planning council, in accordance with the provisions of subdivisions  two
 and  three  of  this section and rules and regulations pursuant thereto;
 except that: any such transaction shall be subject to  the  approval  by
 the  public  health and health planning council in accordance with para-
 graph (b) of subdivision three of this section only with  respect  to  a
 new stockholder or a new principal stockholder; and shall not be subject
 to paragraph (a) of subdivision three of this section. In the absence of
 such  approval,  the  operating  certificate  of  such hospital shall be
 subject to revocation or suspension.]
   (II) No prior approval of the public health and health planning  coun-
 cil shall be required with respect to a transfer, assignment or disposi-
 tion of ten percent or more of [the stock] A DIRECT OR INDIRECT INTEREST
 or voting rights [thereunder of a corporation which is the] IN AN opera-
 tor  of  a hospital [or which is a member of a limited liability company
 which is the owner of a hospital] to any person previously  approved  by
 the  public  health and health planning council, or its predecessor, for
 that [corporation] OPERATOR.  However,  no  such  transaction  shall  be
 effective  unless  at  least ninety days prior to the intended effective
 date thereof, the [stockholder] OPERATOR FULLY completes and files  with
 the  public  health  and  health  planning council notice on forms to be
 developed by the public health and health planning council, which  shall
 disclose  such information as may reasonably be necessary for the public
 health and health planning council to determine whether  it  should  bar
 the  transaction.  Such  transaction  will  be  final as of the intended
 effective date unless, prior thereto, the public health and health plan-
 ning council shall state specific reasons for barring such  transactions
 under  this paragraph and shall notify each party to the proposed trans-
 action. Nothing in this paragraph shall be  construed  as  permitting  a
 person  not previously approved by the public health and health planning
 council for that [corporation] OPERATOR  to  become  the  owner  of  ten

 S. 8395                             5
 
 percent  or  more  of  the [stock of a corporation which is] INTEREST OR
 VOTING RIGHTS, DIRECTLY OR INDIRECTLY, IN the operator of a hospital [or
 which is a member of a limited liability company which is the owner of a
 hospital]  without first obtaining the approval of the public health and
 health planning council.
   (III) IN THE ABSENCE OF APPROVAL BY  THE  PUBLIC  HEALTH  OR  PLANNING
 COUNCIL  OR  THE  PROVISION  OF NOTICE TO SUCH COUNCIL AS REQUIRED UNDER
 THIS PARAGRAPH, THE OPERATING CERTIFICATE  OF  SUCH  HOSPITAL  SHALL  BE
 SUBJECT TO REVOCATION OR SUSPENSION.
   §  5.  Subdivisions  2 and 3 of section 2802 of the public health law,
 subdivision 2 as amended by section 6 of part R of  chapter  59  of  the
 laws  of  2016,  subdivision  3 as amended by chapter 609 of the laws of
 1982 and paragraph (e) of subdivision 3 as amended by chapter 731 of the
 laws of 1993, are amended to read as follows:
   2. The commissioner shall not act upon an application for construction
 of a hospital until the public health and health  planning  council  and
 the  health  systems  agency  have had a reasonable time to submit their
 recommendations, and unless (a) the applicant has obtained all approvals
 and consents required by law  for  its  incorporation  or  establishment
 (including the approval of the public health and health planning council
 pursuant  to the provisions of this article) provided, however, that the
 commissioner may act upon an application for construction by  an  appli-
 cant possessing a valid operating certificate when the application qual-
 ifies  for  review without the recommendation of the council pursuant to
 regulations adopted by the council and approved by the commissioner,  or
 as  otherwise  authorized  by  this section; and (b) the commissioner is
 satisfied as to the public need for the construction, at  the  time  and
 place  and  under  the circumstances proposed, provided however that, in
 the case of an application by a hospital established or operated  by  an
 organization  defined in subdivision one of section four hundred eighty-
 two-b of the social services law, the needs of the members of the  reli-
 gious  denomination  concerned, for care or treatment in accordance with
 their religious or ethical convictions, shall be  deemed  to  be  public
 need;  AND FURTHER PROVIDED THAT: (I) AN APPLICATION BY A GENERAL HOSPI-
 TAL OR DIAGNOSTIC AND TREATMENT CENTER, ESTABLISHED UNDER THIS  ARTICLE,
 TO  CONSTRUCT A FACILITY TO PROVIDE PRIMARY CARE SERVICES, AS DEFINED IN
 REGULATION, MAY BE APPROVED WITHOUT REGARD FOR PUBLIC NEED; OR  (II)  AN
 APPLICATION  BY A GENERAL HOSPITAL OR A DIAGNOSTIC AND TREATMENT CENTER,
 ESTABLISHED UNDER THIS ARTICLE, TO UNDERTAKE CONSTRUCTION THAT DOES  NOT
 INVOLVE  A  CHANGE  IN  CAPACITY,  THE TYPES OF SERVICES PROVIDED, MAJOR
 MEDICAL EQUIPMENT, FACILITY REPLACEMENT, OR THE GEOGRAPHIC  LOCATION  OF
 SERVICES, MAY BE APPROVED WITHOUT REGARD FOR PUBLIC NEED.
   3.  Subject  to  the provisions of paragraph (b) of subdivision two OF
 THIS SECTION, the commissioner in approving the construction of a hospi-
 tal shall take into consideration and be empowered to  request  informa-
 tion  and  advice  as  to (a) the availability of facilities or services
 such as preadmission, ambulatory or home care services which  may  serve
 as alternatives or substitutes for the whole or any part of the proposed
 hospital construction;
   (b)  the need for special equipment in view of existing utilization of
 comparable equipment at the time and place and under  the  circumstances
 proposed;
   (c)  the  possible  economies and improvements in service to be antic-
 ipated from the operation of joint central services including,  but  not
 limited  to  laboratory,  research,  radiology,  pharmacy,  laundry  and
 purchasing;

 S. 8395                             6
 
   (d) the adequacy of financial resources and sources of future revenue,
 PROVIDED THAT THE COMMISSIONER MAY, BUT IS NOT REQUIRED TO, CONSIDER THE
 ADEQUACY OF  FINANCIAL  RESOURCES  AND  SOURCES  OF  FUTURE  REVENUE  IN
 RELATION  TO  COMPLETED APPLICATIONS UNDER SUBPARAGRAPHS (I) AND (II) OF
 PARAGRAPH (B) OF SUBDIVISION TWO OF THIS SECTION; and
   (e)  whether  the facility is currently in substantial compliance with
 all applicable codes, rules and regulations, provided, however, that the
 commissioner shall not disapprove an application  solely  on  the  basis
 that  the  facility  is  not currently in substantial compliance, if the
 application is specifically:
   (i) to correct life safety code or patient care deficiencies;
   (ii) to correct deficiencies which are necessary to protect the  life,
 health, safety and welfare of facility patients, residents or staff;
   (iii)  for replacement of equipment that no longer meets the generally
 accepted operational standards existing for such equipment at  the  time
 it was acquired; and
   (iv) for decertification of beds and services.
   §  6.  Subdivision  4  of  section  3605  of the public health law, as
 amended by section 62 of part A of chapter 58 of the laws  of  2010,  is
 amended to read as follows:
   4.  The public health and health planning council shall not approve an
 application for licensure unless it is satisfied as  to  the  character,
 competence  and  standing in the community of the applicant's incorpora-
 tors, directors, sponsors, stockholders or operators.  THE  COMMISSIONER
 IS  AUTHORIZED  TO  ESTABLISH  IN  REGULATION MINIMUM THRESHOLDS FOR THE
 LEVEL OF EXPERIENCE THAT MUST BE MET AS PART OF THE  PUBLIC  HEALTH  AND
 HEALTH  PLANNING  COUNCIL'S  CONSIDERATION  OF CHARACTER, COMPETENCE AND
 STANDING FOR PURPOSES  OF  THIS  SUBDIVISION,  AND  SUBDIVISION  TWO  OF
 SECTION  THIRTY-SIX  HUNDRED SIX, AND SUBDIVISION TWO OF SECTION THIRTY-
 SIX HUNDRED ELEVEN OF THIS ARTICLE.  SUCH THRESHOLDS MAY INCLUDE BUT ARE
 NOT LIMITED TO: (A) DEFINING THE TYPE OF PRIOR EXPERIENCE REQUIRED;  (B)
 ESTABLISHING A MINIMUM PERIOD OF TIME DURING WHICH SUCH PRIOR EXPERIENCE
 WAS OBTAINED; AND (C) ESTABLISHING A MINIMUM PERCENTAGE OF THE OWNERSHIP
 INTEREST  AND/OR  VOTING RIGHTS OF THE APPLICANT THAT MUST BE HELD BY AN
 INDIVIDUAL WHO MEETS SUCH MINIMUM EXPERIENCE REQUIREMENTS.
   § 7. Subdivisions 1 and 2 of section 3611-a of the public health  law,
 as  amended  by  section 67 of part A of chapter 58 of the laws of 2010,
 are amended to read as follows:
   1. Any change in the person who, or any transfer, assignment, or other
 disposition of an interest or voting rights of ten percent or  more,  or
 any  transfer,  assignment  or  other  disposition  which results in the
 ownership or control of an interest or voting rights of ten  percent  or
 more,  in  a  limited liability company [or], a partnership, OR A CORPO-
 RATION which is the operator of a licensed home care services agency  or
 a  certified  home  health  agency, OR ANY TRANSFER, ASSIGNMENT OR OTHER
 DISPOSITION OF A DIRECT OR INDIRECT INTEREST OR VOTING RIGHTS OF SUCH AN
 OPERATOR WHICH RESULTS IN THE OWNERSHIP OR  CONTROL  OF  MORE  THAN  TEN
 PERCENT  OF  THE INTEREST OR VOTING RIGHTS OF SUCH OPERATOR BY ANY PART-
 NER, MEMBER, OR STOCKHOLDER shall be approved by the public  health  and
 health  planning  council, in accordance with the provisions of subdivi-
 sion four of section thirty-six hundred five of this article relative to
 licensure or subdivision two of section thirty-six hundred six  of  this
 article relative to certificate of approval, except that:
   (a)  Public  health  and  health  planning  council  approval shall be
 required only with respect to the person, or the member or partner  that
 is acquiring the interest or voting rights; and

 S. 8395                             7
 
   (b)  With respect to certified home health agencies, such change shall
 not be subject to the public need assessment described in paragraph  (a)
 of subdivision two of section thirty-six hundred six of this article.
   (c)  (I)  No  prior  approval of the public health and health planning
 council shall be required with respect  to  a  transfer,  assignment  or
 disposition of:
   [(i)]  (A)  an  interest  or  voting  rights  to any person previously
 approved by the public health and health planning council, or its prede-
 cessor, for that operator; or
   [(ii)] (B) an interest or voting rights of less than  ten  percent  in
 the operator. [However, no]
   (II)  NO  such  transaction  UNDER  SUBPARAGRAPH (I) OF THIS PARAGRAPH
 shall be effective unless at least ninety days  prior  to  the  intended
 effective  date  thereof, the [partner or member] OPERATOR completes and
 files with the public health and health planning council notice on forms
 to be developed by the public health council, which shall disclose  such
 information  as  may  reasonably  be necessary for the public health and
 health planning council to determine whether it should  bar  the  trans-
 action. Such transaction will be final as of the intended effective date
 unless,  prior  thereto,  the  public health and health planning council
 shall state specific reasons for barring such  transactions  under  this
 paragraph and shall notify each party to the proposed transaction.
   2.  [Any  transfer,  assignment or other disposition of ten percent or
 more of the stock or voting rights thereunder of a corporation which  is
 the operator of a licensed home care services agency or a certified home
 health  agency,  or any transfer, assignment or other disposition of the
 stock or voting rights thereunder of such a corporation which results in
 the ownership or control of more than ten percent of the stock or voting
 rights thereunder of such corporation by any person shall be subject  to
 approval  by the public health and health planning council in accordance
 with the provisions of subdivision four of  section  thirty-six  hundred
 five of this article relative to licensure or subdivision two of section
 thirty-six  hundred  six  of  this  article  relative  to certificate of
 approval, except that:
   (a) Public health  and  health  planning  council  approval  shall  be
 required  only with respect to the person or entity acquiring such stock
 or voting rights; and
   (b) With respect to certified home health agencies, such change  shall
 not  be subject to the public need assessment described in paragraph (a)
 of subdivision two of section thirty-six hundred six of this article. In
 the absence of such approval, the license  or  certificate  of  approval
 shall be subject to revocation or suspension.
   (c) No prior approval of the public health and health planning council
 shall  be required with respect to a transfer, assignment or disposition
 of an interest or voting rights to any person previously approved by the
 public health and health planning council, or its predecessor, for  that
 operator.  However,  no  such  transaction  shall be effective unless at
 least one hundred twenty days prior to the intended effective date ther-
 eof, the partner or member completes and files with  the  public  health
 and  health  planning  council  notice  on  forms to be developed by the
 public health and health planning council,  which  shall  disclose  such
 information  as  may  reasonably  be necessary for the public health and
 health planning council to determine whether it should  bar  the  trans-
 action. Such transaction will be final as of the intended effective date
 unless,  prior  thereto,  the  public health and health planning council
 shall state specific reasons for barring such  transactions  under  this

 S. 8395                             8

 paragraph  and  shall notify each party to the proposed transaction.] IN
 THE ABSENCE OF APPROVAL BY THE PUBLIC HEALTH OR PLANNING COUNCIL OR  THE
 PROVISION  OF NOTICE TO SUCH COUNCIL AS REQUIRED UNDER THIS SECTION, THE
 LICENSE  OR  CERTIFICATE  OF  APPROVAL SHALL BE SUBJECT TO REVOCATION OR
 SUSPENSION.
   § 8. This act shall take effect immediately.

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Archive: Last Bill Status - In Senate Committee Health Committee

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Sponsored By

Kemp Hannon

Archive: Last Bill Status - In Senate Committee Health Committee

Actions

2017-S8395 (ACTIVE) - Details

2017-S8395 (ACTIVE) - Summary

2017-S8395 (ACTIVE) - Sponsor Memo

2017-S8395 (ACTIVE) - Bill Text download pdf

Comments