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United States: New York Legislature Rejects Proposal To Grant Health Commissioner Authority To Appoint Board Members And Operators Of Not-For-Profit Health Care Facilities
Earlier this year, Governor Andrew Cuomo proposed changes to the
New York Public Health Law which would have given the Commissioner
of the Department of Health the power to remove managers of
hospitals, diagnostic and treatment centers, and adult care
facilities. The Commissioner would have also had the authority to
appoint temporary members of the board of directors, and/or a
temporary operator, of these facilities if the Commissioner deemed
that there had been significant management failures that
jeopardized existing or continued access to necessary services
within a community (e.g., financial instability). These changes
were presented in the Governor's proposed 2012-13 Executive
Budget and Reform Plan on January 17, 2012 (See the Governor's
proposal here, at page 57 – 66 and here, at page 15). The final Budget that was
enacted on March 30, 2012, however, did not include the provisions
which granted the Commissioner such powers over the not-for-profit
health care entities. [Chapter 56 of the Laws of New York,
2012].
The relevant provisions sought to grant the Commissioner
authority to:
Temporarily suspend or limit an operating certificate of a
not-for-profit corporation participating in the Medicaid program
without a hearing upon: a) repeated violations of PHL § 2806
(e.g., failure of a hospital to comply with the provisions of
Article 28 of the public health law and the rules and regulations
promulgated thereunder), b) the indictment on felony charges of any
member of the hospital's board of directors, or c) notice from
the Attorney General of an action to remove a member of the
corporation's board of directors.
Temporarily appoint members of the board of directors of such
not-for-profit entities during the term of the temporary
suspension, as necessary, to preserve access to services within the
community.
Revoke the operating certificate of an entity participating in
the Medicaid program if a member of the board of the directors or a
member of a limited liability company has been convicted of a class
A, B or C felony, in order to ensure the effectiveness of the
governing board of the facility.
Establish an operator of a general hospital, diagnostic and
treatment center, or an adult care facility on a temporary basis to
preserve the best interests of the residents or patients and
community served by the facility when a statement of deficiencies
has been issued by the Department of Health for that facility and
upon a determination by the Commissioner that significant
management failures exist in the facility, including but not
limited to, administrative, operational or clinical deficiencies or
financial instability.
Although these expansive powers were rejected by the legislature
in this year's Budget proposal, New York not-for-profit health
care entities should continue to monitor proposed changes to
legislation or regulations pertaining to this issue since this is
not the first time that legislation aimed to expand the powers of
the Commissioner over not-for-profit health care entity management
has been proposed, and the issue may come up again in the
future.
In addition, not-for-profit heath care entities should monitor
the new reform plan initiatives proposed by Attorney General Eric
Schneiderman which we summarized in a previous
Blog entry. These initiatives, if enacted, may significantly
impact the management and operations of not-for-profit entities in
New York.
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