NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8193
SPONSOR: Schimminger TITLE OF BILL: An act to amend the public health law, in relation to
promoting efficient and effective oversight of continuing care retire-
ment communities; and to repeal certain provisions of such law relating
thereto
PURPOSE OF THE BILL:
Article 46 of the Public Health Law (PHL) was enacted in 1989 to estab-
lish Continuing Care Retirement Communities (CCRCs) in New York. Later
amendments included Article 46A, which established fee-for service (FFS)
CCRCs, and a Life Care at Home program added in 2015. CCRCs provide a
full range of services including independent housing, assisted living
and nursing home care to residents in a campus setting as their needs
change. Since the early 1990s the number of CCRCs and similar communi-
ties has greatly increased across the nation, becoming one of the prima-
ry means by which seniors of varying income levels are able to fund and
provide for their ongoing health care, services, and housing needs.
However, since Article 46 was enacted here in New York, only 12 CCRCs
have become operational.
In the 30 years since its enactment, Article 46 has become outdated and
now represents a major impediment to the development and expansion of
CCRCs in New York. The regulatory framework and policies stemming from
Articles 46 and 46-A create an environment in which it is: (1) prohib-
itively expensive and administratively burdensome to consider starting a
new CCRC or expanding a current community; and (2) extremely difficult
for current communities to operate efficiently and make their services
more affordable to residents.
Statutory and regulatory reforms are needed to modernize the Article 46
and 46-A provisions and eliminate barriers to the development, expan-
sion, and efficient operation of CCRCs in New York while preserving
vitally important resident protections.
A first step in modernizing the governance of CCRCs is to consolidate
authority for establishment and operational oversight of CCRCs into the
Department of Health.
SUMMARY OF SPECIFIC PROVISIONS:
Sections one and two of the bill amend sections 4602 and 4603 of the PHL
to to assign an advisory role to the Continuing Care Retirement Communi-
ty Council and delegate the other duties of the CCRC Council to the
Commissioner of Health. This includes granting certificates of authori-
ty, with final approval for nursing home beds remaining with the Public
Health and Health Planning Council (PHHPC), and oversight of operating
communities.
Section three of the bill amends section 4604 of the PHL to clarify that
the Commissioner of Health is responsible for conducting reviews of
various aspects of an application for a certificate of authority to
operate a CCRC, in concert with the PHHPC (for nursing home beds); the
attorney general (for selected forms of independent living unit owner-
ship); and any designee(s) of the Commissioner.
Sections four, five and six of the bill make conforming amendments to
sections 4604 and 4604-a of the PHL related to the transfer of CCRC
Council authority to the Commissioner of Health.
Sections seven and eight of the bill make confom ing amendments to
sections 4605-a and 4605-b of the PHL related to the transfer of
approval authority for continuing care at home contracts to the Commis-
sioner of Health.
Sections nine and ten of the bill make conforming amendments to sections
4607 (CCRC) and 4658 (FFS CCRC) of the PHL related to reports that would
need to be made to the Commissioner of Health.
Section eleven of the bill amends section 4608 of the PHL to transfer
the approval of changes in contacts, fees and charges by operating CCRCs
from the Superintendent of Financial Services to the Commissioner of
Health.
Section twelve of the bill amends section 4614 of the PHL to eliminate
the responsibility of the Superintendent of Financial Services to
participate in on-site examinations of CCRCs conducted by the Commis-
sioner of Health at least once every three years.
Section thirteen amends section 4667 of the PHL to assign responsibility
for the triennial audit of FFS CCRCs solely to the Commissioner of
Health.
Sections fourteen through nineteen of the bill amend sections 4615, 4616
and 4617 (CCRC) and sections 4668, 4669 and 4670 (FFS CCRC) of the PHL
to authorize the Commissioner of Health, with the consent of the PHHPC,
to take actions related to revocation, suspension or annulment of a
certificate of authority; appointment of a caretaker; and/or receiver-
ship of a CCRC.
Sections fifteen through twenty-eight of the bill make conforming amend-
ments to sections 4621 and 4623 (CCRC) and sections 4651, 4654, 4655,
4657, 4658 and 4659 (FFS CCRC) of the PHL to substitute the Commissioner
of Health for the CCRC Council related to promulgation of regulations,
approvals of certificates of authority, and content of various disclo-
sures.
Section twenty-nine of the bill amends section 4611 of the PHL to
authorize the Commissioner of Health to establish reserve and asset
levels for CCRCs.
Section thirty of the bill establishes an effective date 180 days after
enactment.
JUSTIFICATION:
Articles 46 and 46-A of the PHL, and the regulations and policies that
emanate from these laws, make the establishment and operation of CCRCs
unnecessarily complex and expensive in New York as compared to other
states. Two State agencies, the Department of Health (DOH) and the
Department of Financial Services (DFS), review applications for
entrance-fee CCRC models, while three State agencies (DOH, DFS and the
Office of the Attorney General) review applications for equity model
CCRCs. The resulting review process is protracted, exceedingly complex,
duplicative and expensive. Ongoing oversight of CCRC community oper-
ations, marketing practices, contracting, fees and investments is
burdensome, time-consuming and adds significantly to the cost of operat-
ing these communities. This, in turn, increases fees to residents.
Those provisions of Article 46 and Article 46-A that mandate multiple
agency involvement should be revised to consolidate oversight in DOH and
make it clear that other agencies are involved in a limited consultative
role, as with other health care models such as managed long term care
plans. Although this may have been the original intent of the statute,
actual practice has evolved over the years such that there are competing
interests among agencies in terms of authority to regulate CCRCs.
Because they offer multiple levels of care, CCRCs are subjected to
repeat and duplicative State survey inspections. These multiple surveys
are costly to both the State and the community; they are disruptive to
operations and residents; and findings are often contradictory between
survey teams.
When the three-agency construct was created thirty years ago, DOH lacked
any experience with health insurance so the Department of Insurance (now
DFS) was needed for their insurance expertise. Since that time, DOH
assumed responsibility for the Medicaid program and the Child Health
Plus program, the Essential Health Plan and the New York State of Health
(the State's Health Insurance Marketplace)were created under DOH over-
sight. DOH now oversees the health coverage for more than 7 million New
Yorkers.
The CCRC Council was originally conceived as the coordinating body
between the three agencies. It is seeded with the statutory responsibil-
ity for providing final approval for the establishment of and opera-
tional changes to CCRCs. This construct has not proven to be efficacious
and is inconsistent with the goal of consolidating authority into one
agency. In addition, at times the Council has experienced difficulty
achieving a quorum, which has delayed approvals. Delays can lead to
increases in construction and financing costs.
Both nationally and here in New York, CCRCs have proven themselves to be
financially stable and sound investments for residents and surrounding
communities. Contrary to costing the State money, CCRCs are a proven
economic driver for local communities. They are a sound investment that
pays dividends in managing the care and housing needs of seniors;
provide an alternative to estate planning to qualify for Medicaid; and
enable seniors to remain near family members and friends. The CCRC model
is not a new Medicaid program that will cost the State money. Quite the
opposite, seniors who invest in their care and housing needs through a
CCRC do not divest their assets to qualify for Medicaid-funded services.
PRIOR LEGISLATIVE HISTORY:
2017-2018: A.6450/S.5172;
2015-2016: A.10657/S.7778.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Positive to the State. The economic activity associated with further
CCRC development and operation would be expected to generate additional
tax revenues to the State. Reduced reliance on Medicaid associated with
CCRC residency would save State and federal dollars.
EFFECTIVE DATE:
180 days after enactment, provided that the commissioner may make regu-
lations beforehand that would become effective at the same time as the
law.
