N.Y. PBH Law § 2806-A — New York Code / Act PBH / Article 28 / Section 2806-A
Temporary operator
Status: in_force

* § 2806-a. Temporary operator. 1. For the purposes of this section:\n  (a) "adult care facility" shall mean an adult home or enriched housing\nprogram licensed pursuant to article seven of the social services law or\nan assisted living residence licensed pursuant to article forty-six-B of\nthis chapter;\n  (b) "established operator" shall mean the operator of an adult care\nfacility, a general hospital or a diagnostic and treatment center that\nhas been established and issued an operating certificate as such\npursuant to this article;\n  (c) "facility" shall mean (i) a general hospital or a diagnostic and\ntreatment center that has been issued an operating certificate as such\npursuant to this article; or (ii) an adult care facility;\n  (d) "temporary operator" shall mean any person or entity that:\n  (i) agrees to operate a facility on a temporary basis in the best\ninterests of its residents or patients and the community served by the\nfacility; and\n  (ii) has demonstrated that he or she has the character, competence and\nfinancial ability to operate the facility in compliance with applicable\nstandards;\n  (e) "serious financial instability" shall include but not be limited\nto defaulting or violating key covenants of loans, or missed mortgage\npayments, or general untimely payment of obligations, including but not\nlimited to employee benefit fund, payroll tax, and insurance premium\nobligations, or failure to maintain required debt service coverage\nratios or, as applicable, factors that have triggered a written event of\ndefault notice to the department by the dormitory authority of the state\nof New York; and\n  (f) "extraordinary financial assistance" shall mean state funds\nprovided to a facility upon such facility's request for the purpose of\nassisting the facility to address serious financial instability. Such\nfunds may be derived from existing programs within the department,\nspecial appropriations, or other funds.\n  (g) "improper delegation of management authority by the governing\nauthority or operator" of a general hospital shall include, but not be\nlimited to, the delegation to an entity that has not been established as\nan operator of the general hospital of (i) authority to hire or fire the\nadministrator or other key management employees; (ii) maintenance and\ncontrol of the books and records; (iii) authority over the disposition\nof assets and the incurring of liabilities on behalf of the facility;\nand (iv) the adoption and enforcement of policies regarding the\noperation of the facility. The criteria set forth in this paragraph\nshall not be the sole determining factors, but indicators to be\nconsidered with such other factors that may be pertinent in particular\ninstances. Professional expertise shall be exercised in the utilization\nof the criteria. All of the listed indicia need not be present in a\ngiven instance for there to be an improper delegation of authority.\n  2. (a) In the event that: (i) a facility seeks extraordinary financial\nassistance and the commissioner finds that the facility is experiencing\nserious financial instability that is jeopardizing existing or continued\naccess to essential services within the community, or (ii) the\ncommissioner finds that there are conditions within the facility that\nseriously endanger the life, health or safety of residents or patients,\nthe commissioner may appoint a temporary operator to assume sole control\nand sole responsibility for the operations of that facility, or (iii)\nthe commissioner finds that there has been an improper delegation of\nmanagement authority by the governing authority or operator of a general\nhospital, the commissioner shall appoint a temporary operator to assume\nsole control and sole responsibility for the operations of that\nfacility. The appointment of the temporary operator shall be effectuated\npursuant to this section and shall be in addition to any other remedies\nprovided by law.\n  (b) The established operator of a facility may at any time request the\ncommissioner to appoint a temporary operator. Upon receiving such a\nrequest, the commissioner may, if he or she determines that such an\naction is necessary to restore or maintain the provision of quality care\nto the residents or patients or alleviate the facility's financial\ninstability, enter into an agreement with the established operator for\nthe appointment of a temporary operator to assume sole control and sole\nresponsibility for the operations of that facility.\n  3. (a) A temporary operator appointed pursuant to this section shall,\nprior to his or her appointment as temporary operator, provide the\ncommissioner with a work plan satisfactory to the commissioner to\naddress the facility's deficiencies and serious financial instability\nand a schedule for implementation of such plan. A work plan shall not be\nrequired prior to the appointment of the temporary operator pursuant to\nclause (ii) of paragraph (a) of subdivision two of this section if the\ncommissioner has determined that the immediate appointment of a\ntemporary operator is necessary because public health or safety is in\nimminent danger or there exists any condition or practice or a\ncontinuing pattern of conditions or practices which poses imminent\ndanger to the health or safety of any patient or resident of the\nfacility. Where such immediate appointment has been found to be\nnecessary, the temporary operator shall provide the commissioner with a\nwork plan satisfactory to the commissioner as soon as practicable.\n  (b) The temporary operator shall use his or her best efforts to\nimplement the work plan provided to the commissioner, if applicable, and\nto correct or eliminate any deficiencies or financial instability in the\nfacility and to promote the quality and accessibility of health care\nservices in the community served by the facility. Such correction or\nelimination of deficiencies or serious financial instability shall not\ninclude major alterations of the physical structure of the facility.\nDuring the term of his or her appointment, the temporary operator shall\nhave the sole authority to direct the management of the facility in all\naspects of operation and shall be afforded full access to the accounts\nand records of the facility. The temporary operator shall, during this\nperiod, operate the facility in such a manner as to promote safety and\nthe quality and accessibility of health care services or residential\ncare in the community served by the facility. The temporary operator\nshall have the power to let contracts therefor or incur expenses on\nbehalf of the facility, provided that where individual items of repairs,\nimprovements or supplies exceed ten thousand dollars, the temporary\noperator shall obtain price quotations from at least three reputable\nsources. The temporary operator shall not be required to file any bond.\nNo security interest in any real or personal property comprising the\nfacility or contained within the facility, or in any fixture of the\nfacility, shall be impaired or diminished in priority by the temporary\noperator. Neither the temporary operator nor the department shall engage\nin any activity that constitutes a confiscation of property without the\npayment of fair compensation.\n  4. The temporary operator shall be entitled to a reasonable fee, as\ndetermined by the commissioner, and necessary expenses incurred during\nhis or her performance as temporary operator, to be paid from the\nrevenue of the facility. The temporary operator shall collect incoming\npayments from all sources and apply them to the reasonable fee and to\ncosts incurred in the performance of his or her functions as temporary\noperator in correcting deficiencies and causes of serious financial\ninstability. The temporary operator shall be liable only in his or her\ncapacity as temporary operator for injury to person and property by\nreason of conditions of the facility in a case where an established\noperator would have been liable; he or she shall not have any liability\nin his or her personal capacity, except for gross negligence and\nintentional acts.\n  5. (a) The initial term of the appointment of the temporary operator\nshall not exceed one hundred eighty days. After one hundred eighty days,\nif the commissioner determines that termination of the temporary\noperator would cause significant deterioration of the quality of, or\naccess to, health care or residential care in the community or that\nreappointment is necessary to correct the conditions within the facility\nthat seriously endanger the life, health or safety of residents or\npatients, or the financial instability that required the appointment of\nthe temporary operator, the commissioner may authorize up to two\nadditional ninety-day terms.\n  (b) Upon the completion of the two ninety-day terms referenced in\nparagraph (a) of this subdivision,\n  (i) if the established operator is the debtor in a bankruptcy\nproceeding, and the commissioner determines that the temporary operator\nrequires additional terms to operate the facility during the pendency of\nthe bankruptcy proceeding and to carry out any plan resulting from the\nproceeding, the commissioner may reappoint the temporary operator for\nadditional ninety-day terms until the termination of the bankruptcy\nproceeding, provided that the commissioner shall provide for notice and\na hearing as set forth in subdivision six of this section; or\n  (ii) if the established operator requests the reappointment of the\ntemporary operator, the commissioner may reappoint the temporary\noperator for one additional ninety-day term, pursuant to an agreement\nbetween the established operator, the temporary operator and the\ndepartment.\n  (c) Within fourteen days prior to the termination of each term of the\nappointment of the temporary operator, the temporary operator shall\nsubmit to the commissioner and to the established operator a report\ndescribing:\n  (i) the actions taken during the appointment to address such\ndeficiencies and financial instability,\n  (ii) objectives for the continuation of the temporary operatorship if\nnecessary and a schedule for satisfaction of such objectives,\n  (iii) recommended actions for the ongoing operation of the facility\nsubsequent to the term of the temporary operator including\nrecommendations regarding the proper management of the facility and\nongoing agreements with individuals or entities with proper delegation\nof management authority; and\n  (iv) with respect to the first ninety-day term referenced in paragraph\n(a) of this subdivision, a plan for sustainable operation to avoid\nclosure, or transformation of the facility which may include any option\npermissible under this chapter or the social services law and\nimplementing regulations thereof. The report shall reflect best efforts\nto produce a full and complete accounting.\n  (d) The term of the initial appointment and of any subsequent\nreappointment may be terminated prior to the expiration of the\ndesignated term, if the established operator and the commissioner agree\non a plan of correction and the implementation of such plan.\n  6. (a) The commissioner, upon making a determination to appoint a\ntemporary operator pursuant to paragraph (a) of subdivision two of this\nsection shall, prior to the commencement of the appointment, cause the\nestablished operator of the facility to be notified of the determination\nby registered or certified mail addressed to the principal office of the\nestablished operator. Such notification shall include a detailed\ndescription of the findings underlying the determination to appoint a\ntemporary operator, and the date and time of a required meeting with the\ncommissioner and/or his or her designee within ten business days of the\ndate of such notice. At such meeting, the established operator shall\nhave the opportunity to review and discuss all relevant findings. At\nsuch meeting or within ten additional business days, the commissioner\nand the established operator shall attempt to develop a mutually\nsatisfactory plan of correction and schedule for implementation. In the\nevent such plan of correction is agreed upon, the commissioner shall\nnotify the established operator that the commissioner no longer intends\nto appoint a temporary operator. A meeting shall not be required prior\nto the appointment of the temporary operator pursuant to clause (ii) of\nparagraph (a) of subdivision two of this section if the commissioner has\ndetermined that the immediate appointment of a temporary operator is\nnecessary because public health or safety is in imminent danger or there\nexists any condition or practice or a continuing pattern of conditions\nor practices which poses imminent danger to the health or safety of any\npatient or resident of the facility. Where such immediate appointment\nhas been found to be necessary, the commissioner shall provide the\nestablished operator with a notice as required under this paragraph on\nthe date of the appointment of the temporary operator.\n  (b) Should the commissioner and the established operator be unable to\nestablish a plan of correction pursuant to paragraph (a) of this\nsubdivision, or should the established operator fail to respond to the\ncommissioner's initial notification, a temporary operator shall be\nappointed as soon as is practicable and shall operate pursuant to the\nprovisions of this section.\n  (c) The established operator shall be afforded an opportunity for an\nadministrative hearing on the commissioner's determination to appoint a\ntemporary operator. Such administrative hearing shall occur prior to\nsuch appointment, except that the hearing shall not be required prior to\nthe appointment of the temporary operator pursuant to clause (ii) of\nparagraph (a) of subdivision two of this section if the commissioner has\ndetermined that the immediate appointment of a temporary operator is\nnecessary because public health or safety is in imminent danger or there\nexists any condition or practice or a continuing pattern of conditions\nor practices which poses imminent danger to the health or safety of any\npatient or resident of the facility. An administrative hearing as\nprovided for under this paragraph shall begin no later than sixty days\nfrom the date of the notice to the established operator and shall not be\nextended without the consent of both parties. Any such hearing shall be\nstrictly limited to the issue of whether the determination of the\ncommissioner to appoint a temporary operator is supported by substantial\nevidence. A copy of the decision shall be sent to the established\noperator.\n  (d) The commissioner shall, upon making a determination to reappoint a\ntemporary operator for the first of an additional ninety-day term\npursuant to paragraph (a) of subdivision five of this section, cause the\nestablished operator of the facility to be notified of the determination\nby registered or certified mail addressed to the principal office of the\nestablished operator. If the commissioner determines that additional\nreappointments pursuant to subparagraph (i) of paragraph (b) of\nsubdivision five of this section are required, the commissioner shall\nagain cause the established operator of the facility to be notified of\nsuch determination by registered or certified mail addressed to the\nprincipal office of the established operator at the commencement of the\nfirst of every two additional terms. Upon receipt of such notification\nat the principal office of the established operator and before the\nexpiration of ten days thereafter, the established operator may request\nan administrative hearing on the determination to begin no later than\nsixty days from the date of the reappointment of the temporary operator.\nAny such hearing shall be strictly limited to the issue of whether the\ndetermination of the commissioner to reappoint the temporary operator is\nsupported by substantial evidence.\n  7. No provision contained in this section shall be deemed to relieve\nthe established operator or any other person of any civil or criminal\nliability incurred, or any duty imposed by law, by reason of acts or\nomissions of the established operator or any other person prior to the\nappointment of any temporary operator hereunder; nor shall anything\ncontained in this section be construed to suspend during the term of the\nappointment of the temporary operator any obligation of the established\noperator or any other person for the payment of taxes or other operating\nand maintenance expenses of the facility nor of the established operator\nor any other person for the payment of mortgages or liens.\n  8. The commissioner shall cause the temporary president of the senate,\nthe speaker of the assembly, and the chairs of the senate and the\nassembly health committees to be notified of the appointment of a\ntemporary operator pursuant to paragraph (a) of subdivision two of this\nsection upon such appointment. Such notification shall include, but not\nbe limited to, the name of the established operator, the name of the\nappointed temporary operator and a description of the reasons for such\nappointment to the extent practicable under the circumstances and in the\nsole discretion of the commissioner.\n  * NB Repealed April 1, 2031\n