Carroll, Cook, Cymbrowitz, Dinowitz, Englebright, Glick, Perry, Simon
Amd 2801-a, Pub Health L
Makes various provisions regarding establishment of a hospital: provides that any person and various other listed entities (i.e., partnership, company, stockholder, member, corporation or other entity) with authority to operate a hospital, shall be subject to approval for establishment by the public health council (unless otherwise authorized to operate a hospital without such establishment approval); provides that any assignment or delegation of any authority to operate a hospital shall be subject to approval for establishment by the council (with certain specified exceptions); specifies circumstances under which a person, partnership, company, etc. shall be deemed to have authority to operate a hospital subject to approval for establishment by the council (with certain specified exceptions); specifies circumstances under which a person, partnership, company, etc. shall be deemed to have authority to operate a hospital (i.e., if it has decision-making authority over listed matters).
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A190
SPONSOR: Gottfried TITLE OF BILL:
An act to amend the public health law, in relation to hospital estab-
lishment
PURPOSE OR GENERAL IDEA OF BILL:
To assure that persons or entities with operational authority over a
hospital are subject to establishment approval by the Public Health
Council.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends PHL § 2801-a(1) by adding new paragraphs (b), (c) and
(d) as follows: (b) specifies those characteristics which indicate oper-
ational authority over a hospital; (c) provides that any person or enti-
ty which exercises operational authority over a hospital is subject to
establishment approval by the Public Health Council; and, (d) provides
that any assignment or delegation of authority to operate a hospital is
subject to establishment approval by the Public Health Council.
Section 2 provides for an immediate effective date.
JUSTIFICATION:
Under current provisions of the Public Health Law, a hospital cannot be
established, or ownership changed, without the prior approval of the
Public Health Council as part of an establishment process which includes
a determination of public need.
These provisions do not apply to situations or arrangements in which a
corporation exercises "passive" control over a hospital, but not direct
day-to-day operational authority. Many of the recent, and pending,
hospital merger, network and affiliation arrangements which have
resulted in the reduction or elimination of certain health care services
in a community are a result of these "passive" corporate arrangements.
This bill would clarify what constitutes operational authority over a
hospital to include "passive" control corporate models. In so doing
these arrangements, and their potential impact on the availability of
health care services in a community, would be subject to an establish-
ment review by the Public Health Council.
PRIOR LEGISLATIVE HISTORY:
1998: A.10693 - passed Assembly;
1999-2000: A.4096 - advanced to 3rd reading
2001-2002: A.2674 - advanced to 3rd reading
2003-2004: A.5665 - advanced to 3rd reading
2005-2006: A.5346 - advanced to 3rd reading
2007-2008: A.3482 advanced to 3rd reading
2009-2010: A.877 - advanced to 3rd reading
2011-2012: A.660 - advanced to 3rd reading
2013-2014: A .5341-A - advanced to 3rd reading
2015-2016: A.841 - advanced to 3rd reading
2017-2018: A.2441- advanced to 3rd reading
2019-2020: A.1147 - advanced to 3rd reading
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
190
2021-2022 Regular Sessions
IN ASSEMBLY(Prefiled)
January 6, 2021
___________
Introduced by M. of A. GOTTFRIED, PAULIN, L. ROSENTHAL, ABINANTI,
COLTON, SAYEGH, GALEF -- Multi-Sponsored by -- M. of A. CARROLL, COOK,
CYMBROWITZ, DINOWITZ, ENGLEBRIGHT, GLICK, PERRY, SIMON -- read once
and referred to the Committee on Health
AN ACT to amend the public health law, in relation to hospital estab-
lishment
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 2801-a of the public health law,
2 as amended by section 57 of part A of chapter 58 of the laws of 2010, is
3 amended to read as follows:
4 1. (a) No hospital, as defined in this article, shall be established
5 except with the written approval of the public health and health plan-
6 ning council. No certificate of incorporation of a business membership
7 or not-for-profit corporation shall hereafter be filed which includes
8 among its corporate purposes or powers the establishment or operation of
9 any hospital, as defined in this article, or the solicitation of
10 contributions for any such purpose, or two or more of such purposes,
11 except with the written approval of the public health and health plan-
12 ning council, and when otherwise required by law of a justice of the
13 supreme court, endorsed on or annexed to the certificate of incorpo-
14 ration. No articles of organization of a limited liability company
15 established pursuant to the New York limited liability company law which
16 includes among its powers or purposes the establishment or operation of
17 any hospital as defined in this article, shall be filed with the depart-
18 ment of state except upon the approval of the public health and health
19 planning council.
20 (b) For the purposes of this subdivision, a person (other than a
21 person acting solely as a member of the governing body of a hospital or
22 an employee of a hospital), partnership, company, stockholder, member,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00076-01-1
A. 190 2
1 corporation or other entity shall be deemed to have authority to operate
2 a hospital if it has or shares decision-making authority over any of the
3 following:
4 (i) appointment or dismissal of a hospital's management-level employ-
5 ees or medical staff;
6 (ii) election or removal of members of the governing board or corpo-
7 rate officers of the hospital;
8 (iii) approval of the hospital's operating or capital budgets;
9 (iv) adoption, approval or enforcement of the hospital's operating
10 policies or procedures;
11 (v) approval of applications for construction or establishment
12 approval filed by or on behalf of the hospital;
13 (vi) approval of hospital debt necessary to finance the cost of
14 compliance with operational or physical plant standards required by law;
15 (vii) approval of contracts for management of the hospital or for
16 clinical services at the hospital; and
17 (viii) approval of settlements of administrative proceedings or liti-
18 gation to which the hospital is party that exceed the hospital's insur-
19 ance coverage or coverage by any applicable self-insurance fund.
20 (c) Any person, partnership, company, stockholder, member, or corpo-
21 ration, or other entity with authority to operate a hospital shall be
22 subject to approval for establishment by the public health and health
23 planning council under this section, unless otherwise authorized by this
24 chapter to operate a hospital without such establishment approval.
25 (d) Any assignment or delegation of any authority to operate a hospi-
26 tal, as set forth in paragraph (b) of this subdivision shall be subject
27 to approval for establishment by the public health and health planning
28 council under this section, except for:
29 (i) assignment or delegation by the governing body of the hospital to
30 a committee of the governing body, a corporate officer or an employee of
31 the hospital; or
32 (ii) a management contract under which a governing body contracts with
33 an entity to manage day-to-day operations of a hospital or a portion or
34 service thereof, provided that such a management contract shall require
35 the written approval of the commissioner before it may take effect.
36 § 2. This act shall take effect immediately.
