N.Y. Public Health Law § 2802: Approval of construction

§ 2802. Approval of construction. The construction of a hospital,

whether public or private, incorporated or not incorporated, shall

require the prior approval of the commissioner.

1. An application for such construction shall be filed with the

department, together with such other forms and information as shall be

prescribed by, or acceptable to, the department. Thereafter the

department shall forward a copy of the application and accompanying

documents to the public health and health planning council and the

health systems agency, if any, having geographical jurisdiction of the

area where the hospital is located.

1-a. The following types of construction projects by a hospital

possessing a valid operating certificate shall not require prior

approval pursuant to this section, provided that a written notice has

been submitted to the department together with, where appropriate, a

written architect and/or engineering certification that the project

meets the applicable statutes, codes and regulations specified in the

certification statement and, where required by the department, the

hospital shall implement a plan to protect patient safety during

construction:

(a) correction of cited deficiencies, provided that the construction

is limited to the correction of the deficiencies and is authorized by a

plan of correction approved by the department;

(b) repair or maintenance, regardless of cost, including routine

purchases and the acquisition of minor equipment undertaken in the

course of a hospital's inventory control functions; provided that for

projects under this paragraph with a total cost of up to six million

dollars, no written notice shall be required;

(c) non-clinical infrastructure projects regardless of cost including,

but not limited to, replacement of heating, ventilating and air

conditioning systems, roofs, fire alarm and call bell systems, parking

lots and elevators;

(d) one for one equipment replacements regardless of cost, including

replacement of equipment with another piece of equipment used for

similar purposes but employing current technology; and

(e) other projects as specified in regulations adopted by the council

and approved by the commissioner.

1-b. The commissioner is authorized to waive any requirement for

pre-opening certifications and/or surveys for construction projects

approved in accordance with this section.

2. The commissioner shall not act upon an application for construction

of a hospital until the public health and health planning council and

the health systems agency have had a reasonable time to submit their

recommendations, and unless (a) the applicant has obtained all approvals

and consents required by law for its incorporation or establishment

(including the approval of the public health and health planning council

pursuant to the provisions of this article) provided, however, that the

commissioner may act upon an application for construction by an

applicant possessing a valid operating certificate when the application

qualifies for review without the recommendation of the council pursuant

to regulations adopted by the council and approved by the commissioner,

or as otherwise authorized by this section; and (b) the commissioner is

satisfied as to the public need for the construction, at the time and

place and under the circumstances proposed, provided however that, in

the case of an application by a hospital established or operated by an

organization defined in subdivision one of section four hundred

eighty-two-b of the social services law, the needs of the members of the

religious denomination concerned, for care or treatment in accordance

with their religious or ethical convictions, shall be deemed to be

public need.

2-a. The council shall afford the applicant an opportunity to present

information in person concerning an application to a committee

designated by the council.

2-b. Beginning on January first, nineteen hundred ninety-four, and

each year thereafter, a complete application received between January

first and June thirtieth of each year shall be reviewed by the

appropriate health systems agency and the department and presented to

the public health and health planning council for its consideration

prior to June thirtieth of the following year and a complete application

received between July first and December thirty-first of each year shall

be reviewed by the appropriate health systems agency and the department

and presented to the public health and health planning council for

consideration prior to December thirty-first of the following year.

2-c. An application for the relocation of long-term ventilator beds

from one residential health care facility to another residential health

care facility with common ownership shall be subject, as determined by

the commissioner, to either an administrative or limited review by the

department. Common ownership shall be found when the ownership or

controlling interest in the operator of each residential health care

facility is the same, provided the percentage of ownership interest of

each owner may vary between the two facilities but must meet the whole

in common ownership. For purposes of this subdivision, the commissioner,

when making a determination of public need, may consider access to

long-term ventilator beds in the affected portions of the health systems

region, and the quality of care provided at the facilities with common

ownership. At no time shall an application submitted pursuant to this

subdivision result in a change in the total combined number of long-term

ventilator and residential health care facility beds, including

residential health care facility beds converted from transferred

long-term ventilator beds, operated by the two facilities with common

ownership.

3. Subject to the provisions of paragraph (b) of subdivision two, the

commissioner in approving the construction of a hospital shall take into

consideration and be empowered to request information and advice as to

(a) the availability of facilities or services such as preadmission,

ambulatory or home care services which may serve as alternatives or

substitutes for the whole or any part of the proposed hospital

construction;

(b) the need for special equipment in view of existing utilization of

comparable equipment at the time and place and under the circumstances

proposed;

(c) the possible economies and improvements in service to be

anticipated from the operation of joint central services including, but

not limited to laboratory, research, radiology, pharmacy, laundry and

purchasing;

(d) the adequacy of financial resources and sources of future revenue;

and

(e) whether the facility is currently in substantial compliance with

all applicable codes, rules and regulations, provided, however, that the

commissioner shall not disapprove an application solely on the basis

that the facility is not currently in substantial compliance, if the

application is specifically:

(i) to correct life safety code or patient care deficiencies;

(ii) to correct deficiencies which are necessary to protect the life,

health, safety and welfare of facility patients, residents or staff;

(iii) for replacement of equipment that no longer meets the generally

accepted operational standards existing for such equipment at the time

it was acquired; and

(iv) for decertification of beds and services.

3-a. Review of applications from hospitals in epidemic areas and

hospitals serving state correctional facilities to renovate or provide

for capital improvement for the purpose of controlling the spread of

tuberculosis infection may be approved by the commissioner, who to the

extent practicable may, but shall not be required to, consider the

recommendations of the health systems agency and the public health and

health planning council for applications for which he grants approval.

In such cases the commissioner shall take further measures necessary to

expedite departmental reviews for such approval.

3-b. Review of applications from rural hospitals seeking approval in

the swing bed program, authorized pursuant to section twenty-eight

hundred three of this article, may be approved by the commissioner who,

to the extent practicable, may consider the recommendations of the

respective health systems agency. In such cases, the commissioner shall

take further measures necessary to expedite departmental reviews for

such approval.

3-c. An application shall state the proposed site or location of the

proposed construction. Where the applicant changes the site or location

after approval of the application, the commissioner may, subject to

regulations under this article, approve the change upon a finding that

the change is in the best interest of the service area. In making such

determination, the commissioner may seek a review of the proposed change

by the public health and health planning council and the health systems

agency having geographical jurisdiction.

4. No government agency shall construct any hospital without securing

the written approval of the commissioner in accordance with the

applicable requirements and procedures of the preceding subdivisions.

5. If the commissioner proposes to disapprove an application for

construction of a hospital, he shall afford the applicant an opportunity

to request a public hearing. The commissioner shall not take any action

contrary to the advice of the health systems agency until he affords an

opportunity to the agency to request a public hearing and, if so

requested, a public hearing shall be held.

6. The commissioner, on his own motion, may hold a public hearing on

an application for construction of a hospital.

7. (a) The commissioner shall charge to applicants for construction of

hospitals the following fees and charges for administrative services so

as to recover departmental costs in performing these functions. Each

applicant for construction of a hospital shall pay to the department an

application fee of two thousand dollars, provided, however, that

diagnostic and treatment centers designated by the commissioner as

safety net diagnostic and treatment centers, as defined in paragraph (c)

of subdivision sixteen of section twenty-eight hundred one-a of this

article, shall pay a fee of one thousand two hundred fifty dollars.

(b) At such time as the commissioner's written approval of the

construction is granted, each applicant shall pay the following

additional fee:

(i) for hospital, nursing home and diagnostic and treatment center

applications that require approval by the council, the additional fee

shall be fifty-five hundredths of one percent of the total capital value

of the application, provided however that applications for construction

of a safety net diagnostic and treatment center, as defined in paragraph

(c) of subdivision sixteen of section twenty-eight hundred one-a of this

article, shall be subject to a fee of forty-five hundredths of one

percent of the total capital value of the application; and

(ii) for hospital, nursing home and diagnostic and treatment center

applications that do not require approval by the council, the additional

fee shall be thirty hundredths of one percent of the total capital value

of the application, provided however that safety net diagnostic and

treatment center applications, as defined in paragraph (c) of

subdivision sixteen of section twenty-eight hundred one-a of this

article, shall be subject to a fee of twenty-five hundredths of one

percent of the total capital value of the application.

(c) The commissioner is authorized to establish reduced fees for

applications subject to limited review, as described in regulation, that

do not require review by the council.

(d) The fees and charges paid by an applicant pursuant to this

subdivision for any application for construction of a hospital approved

in accordance with this section shall be deemed allowable capital costs

in the determination of reimbursement rates established pursuant to this

article. The cost of such fees and charges shall not be subject to

reimbursement ceiling or other penalties used by the commissioner for

the purpose of establishing reimbursement rates pursuant to this

article. All fees pursuant to this section shall be payable to the

department of health for deposit into the special revenue funds - other,

miscellaneous special revenue fund - 339, certificate of need account.