N.Y. Public Health Law § 4655: Certificate of authority required; application and approval

* § 4655. Certificate of authority required; application and approval.

1. No person shall construct, expand, acquire, maintain, or operate a

fee-for-service continuing care retirement community, or enter into a

contract as an operator, or solicit the execution of any contract for

fee-for-service continuing care retirement community services to be

provided within the state or advertise itself or otherwise hold itself

as a "fee-for-service continuing care retirement community", without

obtaining a certificate of authority pursuant to this article; provided,

however, nothing in this subdivision shall prohibit a person, authorized

pursuant to section forty-six hundred seventy-four or forty-six hundred

seventy-five of this article, from entering into priority reservation

agreements, soliciting, collecting or receiving priority reservation

fees, or constructing and maintaining sales offices and model units with

respect to a proposed fee-for-service continuing care retirement

community. Such facility shall obtain approval to utilize residential

health care facility beds authorized under subdivision five of section

forty-six hundred four of this chapter and/or shall meet such other

conditions for acquisition of the residential health care facility beds

as the commissioner may determine.

2. In order to receive a certificate of authority to enter into

contracts with respect to a particular community, a person or persons,

hereinafter designated as the applicant, shall apply for a certificate

of authority on forms prescribed by the commissioner and, in addition,

shall submit the following:

a. a feasibility study, including a market analysis describing the

characteristics of the population to be served;

b. an initial disclosure statement as provided pursuant to section

forty-six hundred fifty-seven of this article;

c. a copy of the proposed forms of contracts to be entered into with

residents of the community;

d. complete details of any agreements with a licensed insurer,

including copies of proposed contracts, requiring the insurer to assume,

wholly or in part, the cost of medical or health related services to be

provided to a resident pursuant to a fee-for-service continuing care

contract;

e. a copy of each of the basic organizational documents and agreements

of the applicant of all participating entities;

f. a copy of the bylaws, rules and regulations, and internal governing

documents of the applicant;

g. architectural program and sketches for the community;

h. the proposed community plan, including the number of independent

living units, skilled nursing facility beds, adult care facility beds,

if any, and a description of other social and health services provided

by the community;

i. copies of such financial and personal disclosure information as

required by the council for the applicant and members of the board,

officers, and controlling persons of the proposed fee-for-service

continuing care retirement community, including:

(i) information necessary for the determination by the council of

character, competence and experience, where information adequate to make

such determinations is not otherwise available to the council,

(ii) a list of continuing care retirement communities, fee-for-service

continuing care retirement communities, adult care facilities and health

care facilities owned or operated by the applicant, by any controlling

persons of the applicant, or by entities with which the members of the

applicant's board are affiliated; the address of each such facility; and

the dates of ownership or operation of each such facility,

(iii) in the event that any such community or facility specified in

this subdivision, while under the control or operation of the applicant,

or any controlling person, has been subjected to a limitation,

withdrawal, or refusal to grant accreditation by a recognized

accreditation organization, because of failure to comply with standards

governing the conduct and operation of the facility, information that

describes the nature of the violation, the agency or body enforcing the

standard (including its name and address), the steps taken by the

facility to remedy the violation, and an indication of whether any

accreditation has since been restored, and

(iv) a statement as to whether the applicant or any of its officers,

directors, partners, managers or a principal, parent or subsidiary

corporation:

(A) has been convicted of a crime or pleaded nolo contendre to a

felony charge, or been held liable or enjoined in a civil action by

final judgement if the criminal or civil action involved fraud,

embezzlement, fraudulent conversion, or misappropriation of property,

(B) had a prior discharge in bankruptcy or was found insolvent in any

court action, or

(C) is or was subject to a currently effective injunctive or

restrictive order or federal or state administrative order relating to

business activity or health care as a result of an action brought by a

public agency or department, including, without limitation, actions

affecting a license to operate a hospital as defined by section

twenty-eight hundred one of this chapter, or a facility required to be

licensed or certified by the department. The statement shall set forth

the court or agency, date of conviction or judgement, the penalty

imposed or damages assessed, or the date, nature and issuer of the

order;

j. information which describes the populations to be served; and

k. any other information as may be required by regulations adopted

pursuant to this article.

3. Nothing in this article shall be construed to enlarge, diminish or

modify: a social services district's otherwise valid recovery under

section three hundred sixty-nine of the social services law, nor medical

assistance eligibility under title eleven of article five of the social

services law, nor applicable provisions of the estates, powers and

trusts law. Except as otherwise provided in this article, the activities

of fee-for-service continuing care retirement communities shall be

subject to any other law governing such activities including but not

limited to article twenty-eight of this chapter and article seven of the

social services law and regulations promulgated thereunder; provided,

however, that the provisions of paragraphs (d) and (e) of subdivision

four of section twenty-eight hundred one-a and section twenty-eight

hundred two of this chapter shall not apply, and provided that the

provisions of paragraph (a) of subdivision one and the provisions of

subdivision two of section four hundred sixty-one-b of the social

services law with respect to public need and the provisions of

subdivision one of section four hundred sixty-one-c of the social

services law shall not apply to residents who have been admitted in

accordance with a fee-for-service continuing care contract provided

that, upon admission to the adult care facility, such residents shall be

given a notice which shall include, at a minimum, information regarding

facility services, resident responsibilities, supplemental services,

resident rights and protections and circumstances that warrant transfer.

The number of residential health care facility beds available pursuant

to subdivision four of this section, without proof of public need

therefor, shall be reduced by the number of residential health care

demonstration facility beds that are approved pursuant to this article.

4. Up to three hundred fifty residential health care facility beds, as

authorized in article forty-six of this chapter, that may be approved as

components of fee-for-service continuing care retirement communities

shall not be considered by the department and the health systems

agencies in the determination of public need for residential health care

facility services.

4-a. No certificate of authority shall be issued unless an application

meeting the requirements of this section and all other requirements

established by law has been approved by:

a. the commissioner as to the financial feasibility of the facility

and the form and content of the proposed contracts to be entered into

with residents;

b. the commissioner as to those aspects of the application relating to

adult care facility beds, if any;

c. the public health council under section twenty-eight hundred one-a

of this chapter as to the establishment of a skilled nursing facility by

the applicant and as to such other facilities and services as may

require the public health council's approval of the application;

provided, however, that the recommendations of the state hospital review

and planning council and the health systems agency having geographical

jurisdiction of the area where the fee-for-service continuing care

retirement community is located shall not be required with respect to

the establishment of an on-site or affiliated residential health care

facility to serve residents as part of the fee-for-service continuing

care retirement community, for up to the total number of residential

health care facility beds provided for in subdivision four of this

section in communities statewide;

d. the commissioner under section twenty-eight hundred two of this

chapter; provided, however, that, the recommendations of the state

hospital review and planning council and the health systems agency

having geographical jurisdiction of the area where the fee-for-service

continuing care retirement community is located shall not be required

with respect to the construction of an on-site or affiliated residential

health care facility to serve residents as part of the fee-for-service

continuing care retirement community, for up to the total number of

residential health care facility beds provided for in subdivision four

of this section in communities statewide; and

e. the attorney general as to those aspects of the application

relating to a cooperative, condominium or other equity arrangement for

the independent living unit, if any.

4-b. The applicant shall agree to notify the commissioner at least

sixty days in advance of any change in the rates to be charged to a

resident by the operator for any entrance fee, monthly care fee and/or

any separate charges for the housing component including, but not

limited to, cooperative or condominium fees.

5. If the approvals required by subdivision four-a of this section

have been obtained, the commissioner shall either approve or reject the

application. In order to approve the application, the commissioner shall

have determined that:

a. the proposed fee-for-service continuing care retirement community

will meet a need and will fulfill the purposes of this article;

b. the applicant has satisfied the requirements of this article;

c. the applicant has demonstrated to the satisfaction of the council

that the applicant and members of the board, officers, and controlling

persons of the applicant, are of such character, experience, competence

and standing in the community as to give reasonable assurance of their

ability to conduct the affairs of the proposed fee-for-service

continuing care retirement community in the best interest of the

community and in the public interest, and to provide proper care to

residents. In the case of an applicant that is controlled, the council

must be satisfied that the controlling person has also acted in a manner

that is consistent with the public interest;

d. the applicant has otherwise demonstrated the capability to

organize, market, manage, promote and operate the community and can be

expected to meet its obligations in accordance with this article and in

accordance with its contracts with residents;

e. the applicant has demonstrated that the total number of beds for

the nursing facility component and the adult care facility bears a

reasonable relation to the number of independent living units proposed

for such community; and

f. with respect to communities which include a residential health care

facility which does not require establishment approval under section

twenty-eight hundred one-a of this chapter, the applicant has sufficient

financial resources and sources of future revenues for the operation of

the residential health care facility component.

6. Any change in the legal entity operating the fee-for-service

continuing care retirement community, or in a controlling person of the

community shall require approval in the same manner as an original

application; provided, however, that the commissioner may waive any

requirement to provide information that is not relevant to such change

and provided, further, that the continued public need for the community

shall be presumed.

7. The operator shall designate and make knowledgeable personnel

available to prospective residents to answer questions about any

information contained in the disclosure statement or contract. The

disclosure statement and the contract shall each state on the cover or

top of the first page in bold twelve point print the following "This

matter involves a substantial financial investment and a legally binding

contract. In evaluating the disclosure statement and the contract prior

to any commitment, it is recommended that you consult with an attorney

and financial advisor of your choice, if you so elect, who can review

these documents with you."

8. The commissioner shall issue a certificate of authority to the

applicant upon approval of the application.

* NB There are 2 § 4655's