S T A T E O F N E W Y O R K
________________________________________________________________________
7018
2019-2020 Regular Sessions
I N A S S E M B L Y
April 3, 2019
___________
Introduced by M. of A. PEOPLES-STOKES -- read once and referred to the
Committee on Health
AN ACT to amend the public health law, in relation to directing the
commissioner of health to establish demonstration projects authorizing
equity investment in the operation of residential health care facili-
ties
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 ON OR BEFORE DECEMBER THIRTY-FIRST, TWO
THOUSAND NINETEEN, ESTABLISH UP TO TWO DEMONSTRATION PROJECTS TO DEVEL-
OP, EVALUATE AND IMPLEMENT AN INNOVATIVE APPROACH TO ENCOURAGING EQUITY
INVESTORS TO PROVIDE NEEDED FINANCIAL RESOURCES FOR AND HOLD AN EQUITY
INTEREST AS OPERATORS OF RESIDENTIAL HEALTH CARE FACILITIES. ONE PROJECT
SHALL BE IN THE UPSTATE REGION OF THE STATE. THE OTHER DEMONSTRATION
PROJECT SHALL BE IN A DOWNSTATE REGION IN THE STATE. IN ANTICIPATION OF
THE FINANCIAL IMPACT ON RESIDENTIAL HEALTH CARE FACILITIES FROM THE
STATE'S EXPANSION OF MANDATORY MANAGED CARE TO LONG TERM CARE SERVICES,
THE DEMONSTRATIONS SHALL BE DESIGNED TO PROMOTE THE DEVELOPMENT OF NEW
SOURCES OF CAPITAL FOR THE OPERATION OF RESIDENTIAL HEALTH CARE FACILI-
TIES, AND TO MEASURE THE ABILITY OF SUCH INVESTMENT TO POSITIVELY IMPACT
FACILITIES IN TERMS OF CAPITAL IMPROVEMENTS, INVESTMENT IN NEW TECHNOLO-
GY, AND IMPROVEMENT TO THE QUALITY OF CARE AND QUALITY OF LIFE FOR
FACILITY RESIDENTS MEASURED BY BROADLY ACCEPTED INDUSTRY METRICS INCLUD-
ING, BUT NOT LIMITED TO, THOSE RELATED TO REDUCTION IN RATES OF REHOSPI-
TALIZATON, MDS QUALITY INDICATORS, END OF LIFE CARE, MEDICAL ORDERS FOR
LIFE-SUSTAINING TREATMENT AND NURSING FACILITY "CULTURE CHANGE" INITI-
ATIVES. THE FACILITIES PARTICIPATING IN THE DEMONSTRATIONS AND THE
COMMISSIONER SHALL MUTUALLY DEVELOP THE APPROPRIATE METRICS TO MEASURE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10797-01-9
A. 7018 2
SUCH IMPACT WHICH SHALL SERVE AS THE BASIS FOR THE REPORT TO THE GOVER-
NOR AND THE LEGISLATURE REQUIRED BY PARAGRAPH (H) OF THIS SUBDIVISION.
(B) FOR PURPOSES OF SUCH DEMONSTRATIONS, THE COMMISSIONER MAY APPROVE
DEMONSTRATION PROJECTS EACH INVOLVING THE PURCHASE OF UP TO FIFTEEN
EXISTING RESIDENTIAL HEALTH CARE FACILITIES WHICH HAVE HISTORIES OF
PROVIDING HIGH QUALITY CARE TO RESIDENTS.
(C) THE EQUITY INVESTOR SHALL PARTICIPATE IN EACH FACILITY THROUGH THE
CREATION OF LIMITED LIABILITY COMPANIES ESTABLISHED TO OPERATE THE RESI-
DENTIAL HEALTH CARE FACILITIES.
(D) THE RESIDENTIAL HEALTH CARE FACILITIES MAY BE OPERATED BY LIMITED
LIABILITY COMPANIES FORMED PURSUANT TO THE LIMITED LIABILITY COMPANY
LAW, WHOSE MEMBERS ARE NOT NATURAL PERSONS SO LONG AS AT LEAST ONE
MEMBER OF SUCH LIMITED LIABILITY COMPANIES IS A NATURAL PERSON OF SUFFI-
CIENT EXPERIENCE AND EXPERTISE IN DELIVERING HIGH QUALITY NURSING AND
HEALTH RELATED CARE TO WHOM THE EQUITY INVESTOR HAS DELEGATED, TO THE
SATISFACTION OF THE PUBLIC HEALTH AND HEALTH PLANNING COUNCIL, RESPONSI-
BILITY FOR THE DAY TO DAY MANAGEMENT AND OPERATION OF THE FACILITY.
(E) THE PROVISIONS OF PARAGRAPH (B) OF SUBDIVISION THREE AND PARAGRAPH
(C) OF SUBDIVISION FOUR OF THIS SECTION SHALL NOT APPLY TO THE EQUITY
INVESTOR OR ITS OWNERS; PROVIDED, HOWEVER, THAT THE PUBLIC HEALTH AND
HEALTH PLANNING COUNCIL MAY REQUIRE COMMERCIALLY REASONABLE DISCLOSURE
OF THE IDENTITY OF LIMITED LIABILITY COMPANY MEMBERS, PROVIDED THAT THE
NUMBER OF INVESTORS IS NOT GREATER THAN THIRTY-FIVE.
(F) THE PROVISIONS OF PARAGRAPHS (E) AND (F) OF SUBDIVISION FOUR OF
THIS SECTION SHALL NOT APPLY TO RESIDENTIAL HEALTH CARE FACILITIES OPER-
ATED PURSUANT TO THIS SUBDIVISION. NOTHING IN THIS SECTION SHALL PROHIB-
IT A LIMITED LIABILITY COMPANY FROM BEING THE SOLE MEMBER OF THE LIMITED
LIABILITY COMPANIES REFERRED TO IN PARAGRAPH (C) AND (D) OF THIS SUBDI-
VISION PROVIDED THAT THE FORMER LIMITED LIABILITY COMPANY OR AT LEAST
ONE OF ITS MEMBERS CONFORMS TO THE REQUIREMENTS OF SUCH PARAGRAPHS.
(G) RESIDENTIAL HEALTH CARE FACILITIES PARTICIPATING IN THIS DEMON-
STRATION PROGRAM SHALL BE SUBJECT TO ALL OPERATING STANDARDS AS SET
FORTH IN THIS ARTICLE AND THE REGULATIONS PROMULGATED PURSUANT THERETO
AND SHALL BE SUBJECT TO ANY PROVISIONS OF THIS CHAPTER FOR FAILURE TO
COMPLY WITH SUCH STANDARDS. ADDITIONALLY, FACILITIES IN THIS DEMON-
STRATION PROGRAM SHALL COMPLY WITH ALL DEPARTMENT REGULATIONS PERTAINING
TO ADMISSIONS OF MEDICAID PATIENTS.
(H) NO LATER THAN TWO YEARS AFTER THE FIRST FACILITY COMMENCES OPERA-
TION PURSUANT TO THIS DEMONSTRATION PROGRAM, THE COMMISSIONER SHALL
PROVIDE THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE AND THE
SPEAKER OF THE ASSEMBLY WITH A WRITTEN EVALUATION OF THE DEMONSTRATION
PROGRAMS. SUCH EVALUATION SHALL ADDRESS THE OVERALL EFFECTIVENESS OF
THE PROGRAM IN PROVIDING ACCESS TO CAPITAL INVESTMENT BY RESIDENTIAL
HEALTH CARE FACILITIES AND EVALUATE THE IMPACT PRIVATE EQUITY INVESTMENT
HAS ON THE QUALITY OF CARE AS EVIDENCED BY STAFF RETENTION AND QUALITY
INDICATORS, AND ACCESS TO CARE FOR VARIOUS RESIDENT POPULATIONS.
(I) RESIDENTIAL HEALTH CARE FACILITIES PARTICIPATING IN THIS DEMON-
STRATION PROGRAM SHALL SUBMIT SUCH QUALITY REPORTS AS SHALL BE REQUIRED
AND DIRECTED BY THE COMMISSIONER, INCLUDING INFORMATION ON PATIENT CARE
QUALITY INDICATORS, STAFFING LEVELS AND PATTERNS AND ACCESS TO CARE FOR
VARIOUS PATIENT POPULATIONS.
§ 2. This act shall take effect on the sixtieth day after it shall
have become a law; provided, however, that effective immediately, the
addition, amendment and/or repeal of any rule or regulation necessary
for the implementation of this act on its effective date are authorized
and directed to be made and completed on or before such effective date.