N.Y. Comp. Codes R. & Regs. tit. 10 § 600.2

Current through Register Vol. 46, No. 45, November 2, 2024

Section 600.2 - Requirements for approval

(a) The application must be complete and in proper form. It shall provide all the information essential for the Public Health Council's consideration.

(b) The applicant must satisfactorily demonstrate to the council:

(1) that there is a public need for the facility or the proposed new facility;

(2)

(i) If a nonprofit corporation, that the members of the board of directors and the officers of the corporation are of such character, experience, competence and standing as to give reasonable assurance of their ability to conduct the affairs of the corporation in its best interests and in the public interest and so as to provide proper care for the patients or residents to be served by the facility or the proposed facility;

(ii) if a proprietary business, that the owner, or all the partners, if a partnership, are persons of good moral character with the experience, competence and standing as to give reasonable assurance of their ability to operate the business so as to provide proper care for the patients or residents to be served by the facility or the proposed facility;

(iii) if a business corporation, that the members of the board of directors, the officers and the stockholders of the corporation are of such character, experience, competence and standing as to give reasonable assurance of their ability to conduct the affairs of the corporation so as to provide proper care for the patients or residents to be served by the facility or the proposed facility;

(iv) if a limited liability company, that the members, managers, and officers of the company, are of such character, experience, competence and standing as to give reasonable assurance of their ability to conduct the affairs of the company so as to provide proper care for the patients or residents to be served by the facility or the proposed facility;

(3) that there are adequate finances to properly establish and conduct the proposed facility;

(4) that, with respect to an applicant who is already or within the past 10 years, been an incorporator, director, sponsor, stockholder, member, controlling person, principal stockholder, principal member, or operator of any facility as specified in paragraph (b) of subdivision (3) of section 2801-a of the Public Health Law, a substantially consistent high level of care has been rendered in each such facility the applicant is or has been affiliated.

(i) In reaching this determination, the Public Health and Health Planning Council shall consider findings of facility inspections, including but not limited to the title XVIII and XIX (of the Social Security Act) and article 28 survey findings, as such pertain to violations of this Chapter and routine and patient abuse complaint investigation results; and other available information.

(ii) The Public Health and Health Planning Council's determination that a substantially consistent high level of care has been rendered shall be made after evaluating the aforementioned information, with the following criteria: the gravity of any violation, the manner in which the applicant/operator exercised supervisory responsibility over the facility operation, and the remedial action, if any, taken after the violation was discovered.

(a) In evaluating the gravity of the violation, the Public Health and Health Planning Council shall consider whether the violation threatened, or resulted in direct, significant harm to the health, safety or welfare of patients/residents.

(b) In evaluating the manner in which the applicant/operator exercised supervisory responsibility over the facility operation, the Public Health and Health Planning Council shall consider whether a reasonably prudent individual of the applicant/operator should have been aware of the conditions which resulted in the violation and was notified about the conditions which resulted in the violation and whether the individual of the applicant/operator was notified about the condition(s) which resulted in the violation.

(c) In evaluating any remedial action taken, the Public Health and Health Planning Council shall consider whether the applicant/operator investigated the circumstances surrounding the violation, and took steps which a reasonably prudent applicant/operator would take to prevent the reoccurrence of the violation.

(iii) When violations were found which either threatened to directly affect patient/resident health, safety or welfare, or resulted in direct, significant harm to the health, safety or welfare of patients/residents, there shall not be a determination of a substantially consistent high level of care if the violations were recurrent or were not promptly corrected.

(a) A violation is recurrent if it has the same root cause as a violation previously cited within the last ten (10) years.

(b) A violation is not promptly corrected if a plan of correction has not been submitted to the Department within ten (10) calendar days of the issuance of the statement of deficiencies, Form CMS-2567 and the facility has failed to provide an acceptable date of compliance based on the violation(s) requiring correction.

(5) that, with respect to an application to incorporate or establish a nursing home, an applicant who is already or within the past 7 years, been an incorporator, director, sponsor, stockholder, or member, has held a controlling interest or has been a controlling person, principal stockholder or principal member, or operator of a nursing home as specified in paragraph (b) of subdivision (3-b) of section 2801-a of the Public Health Law, has demonstrated satisfactory character, competence and standing in the community and a consistently high level of care has been rendered in each such nursing home that the applicant is or has been affiliated.

(i) In reaching this determination, the Public Health and Health Planning Council shall consider, at a minimum, the following:

(a) findings of facility inspections, including but not limited to the title XVIII and XIX (of the Social Security Act) and article 28 survey findings, as such pertain to violations of this Chapter and routine and patient abuse complaint investigation results;

(b) any instance of a facility affiliated with the applicant/operator earning a two-star rating or less by the federal centers for Medicare and Medicaid Services (CMS) (or a comparable rating under a successor CMS rating system); provided that a further consideration and mitigating factor in determining whether such star rating reflects a consistently high level of care is where an applicant's ownership interest in the star rated facility commenced within the prior five years;

(c) any instance where there have been violations of the state or federal nursing home code, or other applicable rules and regulations, that threatened to directly affect the health, safety or welfare of any patient or resident, including but not limited to a finding of immediate jeopardy, or actual harm, and were recurrent or were not promptly corrected, including but not limited to repeat deficiencies for the same or similar violations over a three year period or during the entire duration of ownership if less than three years, or any facility which has been in receivership;

(d) any instance where a facility has closed or has closed as a result of a settlement agreement from a decertification action or licensure revocation.

(e) any instance where a health care related facility, agency, or program was the subject of a decertification action or licensure revocation;

(f) any involuntary termination from the Medicare or Medicaid program; and

(g) any instance of a nursing home being designated a Special Focus Facility or Special Focus Facility Candidate.

The applicant shall be provided with the opportunity to submit an explanation and other supporting documentation regarding any of the aforementioned occurrences which shall be considered by the Public Health and Health Planning Council prior to reaching a determination.

(ii) The Public Health and Health Planning Council's determination that a consistently high level of care has been rendered shall be made after evaluating the aforementioned information, with the following criteria:

(i) the gravity of any violation, the manner in which the applicant/operator exercised supervisory responsibility over the facility operation, and the remedial action, if any, taken after the violation was discovered and

(ii) the percentage of nursing homes in a portfolio with a two-star or less rating.

(b) In evaluating the manner in which the applicant/operator exercised supervisory responsibility over the facility operation, the Public Health and Health Planning Council shall consider whether a reasonably prudent individual of the applicant/operator should have been aware of the conditions which resulted in the violation and whether the individual of the applicant/operator was notified about the condition(s) which resulted in the violation.

(d) In evaluating instances of a facility affiliated with the applicant/operator earning a two-star or less rating, the Public Health and Health Planning Council shall determine the percentage of nursing homes in the portfolio, that each individual of the applicant/operator has held an ownership interest for forty-eight (48) months or more and has earned a CMS star rating of two-stars or less.

(iii) When any of the following has occurred in the prior five years, there shall not be a determination of a consistently high level of care:

(a) Closure of a facility or a facility has closed as a result of a settlement agreement from a decertification action or licensure revocation.

(b) A health care related facility, agency, or program was the subject of a decertification action or licensure revocation.

(c) Involuntary termination of a health care related facility, agency, or program from the Medicare or Medicaid program.

(d) Violations found, which either threatened to directly affect patient/resident health, safety or welfare, or resulted in direct, significant harm to the health, safety or welfare of patients/residents, and were recurrent or were not promptly corrected.

(1) A violation is recurrent if it has the same root cause as a violation previously cited within the last seven (7) years.

(2) A violation is not promptly corrected if a plan of correction has not been to submitted to the Department within ten (10) calendar days of the issuance of the statement of deficiencies, Form CMS-2567 and the facility has failed to provide an acceptable date of compliance based on the violation(s) requiring correction.

(iv) When any individual of the applicant/operator has greater than 40% of the nursing homes in their portfolio with a CMS star rating of two stars or less and has held an ownership interest in such nursing home for forty-eight (48) months or more, there shall not be a determination of a consistently high level of care; unless the portfolio contains fewer than five (5) facilities, then the Public Health and Health Planning Council shall make a determination on a case-by-case basis, using the criteria set forth in subparagraph (ii) of this paragraph.

(c)

(1) The applicant must supply any additional documentation or information requested by the department acting on behalf of the Public Health Council within 30 days, or any other stated time frame, of such request, or must obtain from the department acting on behalf of the council an extension of the time in which to provide such documentation or information which is requested during the review of the application. Any request for an extension of time shall set forth reasons why such documentation or information could not be obtained within the prescribed time. The granting of a request for an extension shall be at the discretion of the department acting on behalf of the council. Failure to provide such documentation or information within the time prescribed or as extended by the department acting on behalf of the council shall constitute an abandonment or withdrawal of the application without any further action by the council or department.

(2) The applicant must supply any authorization the council or the department requests in order to verify any documentation or information contained in the application or to obtain any additional documentation or information which the council or department finds is pertinent to the application. Failure to provide such authorization shall constitute an abandonment or withdrawal of the application without any further action by the council or department.

(d) Whenever any applicant proposes to lease premises in which the operation of a hospital as defined in article 28 of the Public Health Law is to be conducted, the lease agreement shall include the following language:

"The landlord acknowledges that his rights of reentry into the premises set forth in this lease do not confer on him the authority to operate a hospital as defined in article 28 of the Public Health Law on the premises and agrees that he will give the New York State Department of Health, Tower Building, Empire State Plaza, Albany, NY 12237, notification by certified mail of his intent to reenter the premises or to initiate dispossess proceedings or that the lease is due to expire, at least 30 days prior to the date on which the landlord intends to exercise a right of reentry or to initiate such proceedings or at least 60 days before expiration of the lease.

"Upon receipt of notice from the landlord of his intent to exercise his right of reentry or upon the service of process in dispossess proceedings and 60 days prior to the expiration of the lease, the tenant shall immediately notify by certified mail the New York State Department of Health, Tower Building, Empire State Plaza, Albany, NY 12237, of the receipt of such notice or service of such process or that the lease is about to expire."

(e) No lease covering the premises in which the operation of a hospital as defined in article 28 of the Public Health Law is to be conducted may contain any provision whereby rent, or any increase therein, is based upon the Consumer Price Index, or any other cost of living index, except:

(1) leases for outpatient facilities and premises leased solely for administrative purposes may contain cost of living index rent determination or adjustment provisions, provided the following conditions are met:

(i) the lease is reviewed and approved by the department;

(ii) the space rented is in a multi-purpose, multi-use building not constructed specifically for the purpose of housing an outpatient facility;

(iii) the rental, if the lease is a sublease, is the same or less than the rental in the overlease;

(iv) the applicant has no interest, direct or indirect, beneficial or of record, in the ownership of the building or any overlease; and

(v) the rental per square foot, in the judgement of the department, is the same as or is comparable to other rentals in the building in which the outpatient service or administrative space is to be located, and the rental per square foot is comparable to the rental of similar space in other comparable buildings in the area when such comparisons can be made;

(2) in addition to the exception set forth in paragraph (1) of this subdivision, in the event the lease covering hospital premises contains provisions whereby it is the lessor's responsibility to pay necessary expenses associated with such premises, such as real estate taxes, utilities, heat, insurance, maintenance and operating supplies, such lease may contain provisions which allow adjustments to the rent only to the extent necessary to compensate for changes in such expenses.

N.Y. Comp. Codes R. & Regs. Tit. 10 § 600.2

Amended New York State Register March 9, 2022/Volume XLIV, Issue 10, eff. 3/9/2022