N.Y. Mental Hygiene Law § 31.20: Temporary operator

* § 31.20 Temporary operator.

(a) For the purposes of this section:

(1) "Established operator" shall mean the operator of a mental health

program that has been established and issued an operating certificate

pursuant to this article.

(2) "Extraordinary financial assistance" shall mean state funds

provided to, or requested by, a program for the express purpose of

preventing the closure of the program that the commissioner finds

provides essential and necessary services within the community.

(3) "Mental health program" shall mean a provider of services for

persons with serious mental illness, as such terms are defined in

section 1.03 of this chapter, which is licensed or operated by the

office.

(4) "Office" shall mean the office of mental health.

(5) "Serious financial instability" shall include but not be limited

to defaulting or violating material covenants of bond issues, missed

mortgage payments, a pattern of untimely payment of debts, failure to

pay its employees or vendors, insufficient funds to meet the general

operating expenses of the program, failure to maintain required debt

service coverage ratios and/or, as applicable, factors that have

triggered a written event of default notice to the office by the

dormitory authority of the state of New York.

(6) "Temporary operator" shall mean any operator of a mental health

program that has been established and issued an operating certificate

pursuant to this article or which is directly operated by the office of

mental health, that:

a. agrees to operate a mental health program on a temporary basis in

the best interests of its patients served by the program; and

b. has a history of compliance with applicable laws, rules, and

regulations and a record of providing care of good quality, as

determined by the commissioner; and

c. prior to appointment as temporary operator, develops a plan

determined to be satisfactory by the commissioner to address the

program's deficiencies.

(b) (1) In the event that: (i) the established operator is seeking

extraordinary financial assistance; (ii) office collected data

demonstrates that the established operator is experiencing serious

financial instability issues; (iii) office collected data demonstrates

that the established operator's board of directors or administration is

unable or unwilling to ensure the proper operation of the program; or

(iv) office collected data indicates there are conditions that seriously

endanger or jeopardize continued access to necessary mental health

services within the community, the commissioner shall notify the

established operator of his or her intention to appoint a temporary

operator to assume sole responsibility for the program's treatment

operations for a limited period of time. The appointment of a temporary

operator shall be effectuated pursuant to this section, and shall be in

addition to any other remedies provided by law.

(2) The established operator may at any time request the commissioner

to appoint a temporary operator. Upon receiving such a request, the

commissioner may, if he or she determines that such an action is

necessary, enter into an agreement with the established operator for the

appointment of a temporary operator to restore or maintain the provision

of quality care to the patients until the established operator can

resume operations within the designated time period; the patients may be

transferred to other mental health programs operated or licensed by the

office; or the operations of the mental health program should be

completely discontinued.

(c) (1) A temporary operator appointed pursuant to this section shall

use his or her best efforts to implement the plan deemed satisfactory by

the commissioner to correct or eliminate any deficiencies in the mental

health program and to promote the quality and accessibility of mental

health services in the community served by the mental health program.

(2) If the identified deficiencies cannot be addressed in the time

period designated in the plan, the patients shall be transferred to

other appropriate mental health programs licensed or operated by the

office.

(3) During the term of appointment, the temporary operator shall have

the authority to direct the staff of the established operator as

necessary to appropriately treat and/or transfer the patients. The

temporary operator shall, during this period, operate the mental health

program in such a manner as to promote safety and the quality and

accessibility of mental health services in the community served by the

established operator until either the established operator can resume

program operations or until the patients are appropriately transferred

to other programs licensed or operated by the office.

(4) The established operator shall grant access to the temporary

operator to the established operator's accounts and records in order to

address any deficiencies related to a mental health program experiencing

serious financial instability or an established operator requesting

financial assistance in accordance with this section. The temporary

operator shall approve any financial decision related to a program's day

to day operations or program's ability to provide mental health

services.

(5) The temporary operator shall not be required to file any bond. No

security interest in any real or personal property comprising the

established operator or contained within the established operator or in

any fixture of the mental health program, shall be impaired or

diminished in priority by the temporary operator. Neither the temporary

operator nor the office shall engage in any activity that constitutes a

confiscation of property.

(d) The temporary operator shall be entitled to a reasonable fee, as

determined by the commissioner and subject to the approval of the

director of the division of the budget, and necessary expenses incurred

while serving as a temporary operator. The temporary operator shall be

liable only in its capacity as temporary operator of the mental health

program for injury to person and property by reason of its operation of

such program; no liability shall incur in the temporary operator's

personal capacity, except for gross negligence and intentional acts.

(e) (1) The initial term of the appointment of the temporary operator

shall not exceed ninety days. After ninety days, if the commissioner

determines that termination of the temporary operator would cause

significant deterioration of the quality of, or access to, mental health

care in the community or that reappointment is necessary to correct the

deficiencies that required the appointment of the temporary operator,

the commissioner may authorize an additional ninety-day term. However,

such authorization shall include the commissioner's requirements for

conclusion of the temporary operatorship to be satisfied within the

additional term.

(2) Within fourteen days prior to the termination of each term of the

appointment of the temporary operator, the temporary operator shall

submit to the commissioner and to the established operator a report

describing:

a. the actions taken during the appointment to address the identified

mental health program deficiencies, the resumption of mental health

program operations by the established operator, or the transfer of the

patients to other providers licensed or operated by the office;

b. objectives for the continuation of the temporary operatorship if

necessary and a schedule for satisfaction of such objectives; and

c. if applicable, the recommended actions for the ongoing operation of

the mental health program subsequent to the temporary operatorship.

(3) The term of the initial appointment and of any subsequent

reappointment may be terminated prior to the expiration of the

designated term, if the established operator and the commissioner agree

on a plan of correction and the implementation of such plan.

(f) (1) The commissioner shall, upon making a determination of an

intention to appoint a temporary operator pursuant to paragraph one of

subdivision (b) of this section cause the established operator to be

notified of the intention by registered or certified mail addressed to

the principal office of the established operator. Such notification

shall include a detailed description of the findings underlying the

intention to appoint a temporary operator, and the date and time of a

required meeting with the commissioner and/or his or her designee within

ten business days of the receipt of such notice. At such meeting, the

established operator shall have the opportunity to review and discuss

all relevant findings. At such meeting, the commissioner and the

established operator shall attempt to develop a mutually satisfactory

plan of correction and schedule for implementation. In such event, the

commissioner shall notify the established operator that the commissioner

will abstain from appointing a temporary operator contingent upon the

established operator remediating the identified deficiencies within the

agreed upon timeframe.

(2) Should the commissioner and the established operator be unable to

establish a plan of correction pursuant to paragraph one of this

subdivision, or should the established operator fail to respond to the

commissioner's initial notification, there shall be an administrative

hearing on the commissioner's determination to appoint a temporary

operator to begin no later than thirty days from the date of the notice

to the established operator. Any such hearing shall be strictly limited

to the issue of whether the determination of the commissioner to appoint

a temporary operator is supported by substantial evidence. A copy of the

decision shall be sent to the established operator.

(3) If the decision to appoint a temporary operator is upheld such

temporary operator shall be appointed as soon as is practicable and

shall operate the mental health program pursuant to the provisions of

this section.

(g) Notwithstanding the appointment of a temporary operator, the

established operator shall remain obligated for the continued operation

of the mental health program so that such program can function in a

normal manner. No provision contained in this section shall be deemed to

relieve the established operator or any other person of any civil or

criminal liability incurred, or any duty imposed by law, by reason of

acts or omissions of the established operator or any other person prior

to the appointment of any temporary operator of the program hereunder;

nor shall anything contained in this section be construed to suspend

during the term of the appointment of the temporary operator of the

program any obligation of the established operator or any other person

for the maintenance and repair of the facility, provision of utility

services, payment of taxes or other operating and maintenance expenses

of the facility, nor of the established operator or any other person for

the payment of mortgages or liens.

(h) Upon appointment of a temporary operator, the commissioner shall

cause the temporary president of the senate, the speaker of the

assembly, and the chairs of the senate mental health and developmental

disabilities committee and the assembly mental health committee to be

notified of such determination. Such notification shall include, but not

be limited to, the name of the established operator, the name of the

appointed temporary operator and a description of the reasons for such

determination to the extent practicable under the circumstances and in

the sole discretion of the commissioner.

* NB Repealed March 31, 2028