2023 New York Laws › MHY - Mental Hygiene › Title E - General Provisions › Article 31 - Regulation and Quality Control of Services for the Mentally Disabled › 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, 2025