1. CERTIFICATE OF NEED – 2017 Jerome T. Levy Duane Morris LLP
1540 Broadway
New York, NY 10036
(212)

2. I. LICENSURE AND OPERATIONAL REQUIREMENTS
1. Article 28 – Certificate of Need (a) Establishment – Change of Ownership (b) Construction Applications 10 NYCRR §710 (c) Standards for Public Health and Health Planning Council (PHHPC) (i) Public Need - §709 of Regulations

3. (ii) Character and Competence – Ten year rule
Need for Nursing Homes is addressed in 709.3
(A) 2016 was planning target” so due for update
(B) Requirement of 97% Occupancy in County
(ii) Character and Competence – Ten year rule
(A) Do Applicants Need Experience?
(B) “Wife Substitution” Rule
(iii) Financial Feasibility

4. (d) Process Some elements –
Require 25% Equity; can be lowered to 15%
Letter of interest, then executed commitment letter
Working Capital Requirements
(d) Process
(i) Department Review of Application – NYSECON

5. (A) Effective December 21, 2010
(B) Electronic CON
(ii) Public Health and Health Planning Council (PHHPC)
(A) Economy
(B) Efficiency – One Level of Council Review
(C) Speed of Processing: 5 to 7 months not impossible

6. (iii) Status of PHHPC
(A) Enacted by 2010 legislation effective as of December 1, 2010
(B) Meetings on old SHRPC schedule; generally 1st or 2nd Thursday of every other month – 6 per year since 2011.
(C) Committees
Establishment
Credentialing
Codes
Reimbursement

7. (e) Appeals 20 Days to Appeal Adverse Decision
Evidentiary Hearing Before ALJ
Article 78 Proceeding in Court
History of CON Appeals

8. (f) Differences in Business Structure: Partnerships, Corporations, Limited Liability Companies
(i) Transfers in Partnerships and LLC’s – 90 “No Action” Day Rule §2801 – a(4)(b)(iii) – applies where members are withdrawing – or a new member is acquiring less than 10% or
(ii) Transfers in Corporations less than 10% without approval

9. (g) Why is New York Different from all other Jurisdictions?
(i) No public companies – No REIT’s as Operators
(ii) Estate and Trust Issues – Conservator or Committee can be appointed for a limited time.

10. 2. Operating Certificate §2805
Ministerial Act (only requires a pre-opening “premises” survey)
Revocation §2806; §2806-b Department may Petition court for appointment of a Caretaker
Hearing Rights – Note that if establishment has been revoked, then no separate right to a hearing on revocation of operating certificate §2806(2)
Felony Operator Law §2806(5) – Supersedes ordinary relief from civil disabilities. (Hodes v. Axelrod 1981)

11. 1. Regulatory Need Methodology – 10NYCRR§709.3 (Target Year 2016)
II. CURRENT ISSUES
1. Regulatory Need Methodology – 10NYCRR§ (Target Year 2016)
97% Occupancy – what does it Mean?
The Capital Requirement – 25%
Exceptions –
(i) Give up beds
(ii) Cost efficiencies – below caps
Will methodology be revised?
Activities earlier in 2016

12. (e) Policy Choices for Department
(ii) No current activity
(iii) Inclusion of star ratings in the CON process
Arbitrary
Popular
(e) Policy Choices for Department
(i) Favoring non-residential services – Home Care
(ii) ALP Program
(iii) Assisted Living – Non ALP

13. (f) Sale of “empty beds”
(iv) Discrimination in Capital reimbursement - ALP
(v) The Economic Basis for the Policy of shrinking the system
(vi) Demographic nightmare on the horizon
(vii) Change of emphasis to “rehabilitation”
(f) Sale of “empty beds”
Before facility closes
Assignment of rights
(g) Let’s Make a Deal! - Department of Health Rightsizing Effort

14. Occupancy below 95% Department wants to reduce beds
Jawboning in CHOW
Average occupancy over last three years
Disapproval on basis of need
Meeting to discuss "alternatives", i.e., reduction
2. Distress Situation
(a) Receivership
(b) Bankruptcy

15. (c) Consultant Agreements and Pre Ownership transfer devices
(i) Can Buyer assume operational responsibility for facility prior to closing
(ii) Department view of "CASA"
Alternative for a corporation – 9% transfer
Alternative for an LLC – 90-day no action transfer
Employment Agreement

16. III. CONSTRUCTION APPLICATION AND FEES - §2802 PHL
Types
(a) Full Review §710.1(c)(2) includes recommendation from PHHPC
(b) Administrative Review §710.1(c)(3) No PHHPC recommendation ceiling raised to $15 million. Included in this is application for vent beds
(c) No application – repair and maintenance items §710.1 (c)(4)

17. (d) Limited Review §710.1 (c)(5) where cost is less than $6 million.
2. Fees – there are substantial fees for filing these applications. §2802(7)(b)(1). Fifty-five hundredth of one percent of the total value of the construction but this is our allowable project cost.

18. ASSISTED LIVING PROGRAM
Transfer of an Assisted Living Facility
Review is entirely within Department – no council involvement
CHOW – full application “Common Application” on Department website
Elements reviewed by DOH
Character and Competence
Financial Projections
Transaction Documents

19. Construction of a New Facility
(d) Reviewed by Staff
(e) Final Approval. Time frame can be compacted – around 6 months.
(f) Department will ask for supplemental information if application not complete.
Construction of a New Facility
(a) Submission of Plans, Drawings Primary Architect and an independent architect have to certify that it meets code.

20. (b) Construction Application – follows same path as a CHOW
Department currently does not have an architect for Assisted Living Facilities
No limitation on “need”. Applicant makes business determination that it should proceed. No Department imposed need criteria
Construction Architectural Review done by central office. Policy and Procedure Review is done by the Regional Office.