Opinion ID: 1981302
Heading Depth: 1
Heading Rank: 3

Heading: Health Care Workforce Recruitment and Retention Act

Text: On January 25, 2002, the Legislature enacted Chapter 1 of the Laws of 2002, the Health Care Workforce Recruitment and Retention Act (Chapter 1). Chapter 1's purposes include allow[ing] [Empire] to convert to a for-profit corporation, giving Empire the ability to raise the capital needed to compete effectively in the current health care market; providing revenue from the conversion to help health care providers recruit and retain the staff they need; and increas[ing] and improv[ing] health care access for children, women and the working disabled (Senate Mem in Support of L 2002, ch 1, 2002 McKinney's Session Laws of NY, at 1639-1640). Chapter 1 amends Insurance Law § 4301 (j) by adding five new paragraphs, including paragraph (2) specifically addressing the Attorney General's contention that this provision would otherwise preclude Empire's conversion. [9] Chapter 1 also creates a new section 7317 of the Insurance Law, which directs Empire to submit a proposed plan of conversion (Insurance Law § 7317 [a] [1]) and prohibits the Superintendent from approving this plan until after he has convened public hearings and determined that it [would] not adversely affect the applicant's contractholders or members, [would] protect the interests of and [would] not negatively impact on the delivery of health care benefits and services to the people of the state of New York and results in the fair, equitable and convenient winding down of the business and affairs of the applicant (Insurance Law § 7317 [b]). Section 7317 (f) (i) vests Supreme Court with sole jurisdiction to consider any challenge to the Superintendent's final determination to approve the conversion, sets a 30-day limitations period, and limits judicial review to the question of whether the Superintendent acted in an arbitrary or capricious manner with respect to reaching his determination. Section 7317 (f) (ii) specifies that [t]his section [7317] shall be deemed to supercede all otherwise applicable laws and legal requirements and grants Empire's Board immunity for participation in the conversion. [10] Section 7317 (f) (ii) additionally provides that a transaction approved by the superintendent shall be deemed for all purposes to be a transaction that is fair and reasonable to an applicant and to promote the purposes of that applicant, and the use of proceeds as described herein shall be deemed for all purposes to be a use for a purpose that is consistent with and as near as may be to the purposes for which the applicant was originally organized and subsequently operated. The plan of conversion submitted by Empire pursuant to Chapter 1 was similar in many ways to the plan approved by the Superintendent in 1999. This plan accomplishes Empire's conversion through a transfer of assets, the creation of new for-profit corporations and a holding company, and a stock sale. Chapter 1 modifies Empire's original plan in one key respect, however. Rather than dedicating 100% of the assets freed upon conversion to a charitable foundation, Chapter 1 calls for 95% of the fair market value of the for-profit entity to be transferred to a public asset fund (Insurance Law § 4301 [j] [4]; § 7317 [e]). The remaining 5% is to be transferred to a charitable organization (Insurance Law § 4301 [j] [5]; § 7317 [k] [1]) that shall operate as a tax-exempt organization pursuant to IRC § 501 (c) (3) and whose mission is expansion of access to health care generally. [11] The public asset fund is to be managed by a board of directors consisting of five members, three appointed by the Governor and one each appointed by the Temporary President of the Senate and the Speaker of the Assembly (Insurance Law § 4301 [j] [4] [B]). The net proceeds in the fund are to be transferred to the preexisting Tobacco Control and Insurance Initiatives Pool (Insurance Law § 4301 [j] [4] [O]; see also Public Health Law § 2807-v). Chapter 1 directs that the funds be used for recruiting and retaining nonsupervisory health care workers with direct patient care responsibilities (L 2002, ch 1, part A, §§ 1, 1-b, 2, 7-b); the Elderly Pharmaceutical Insurance Coverage (EPIC) program, a state-sponsored prescription plan for needy senior citizens ( id. § 29); treatment for breast and cervical cancer ( id. § 60); Medicaid for disabled persons ( id. § 69); quality improvement programs for nursing homes ( id. §§ 5, 26); and assistance for other public health programs. [12] Any residual funds would go to the previously created Health Care Initiatives Pool (Public Health Law § 2807- l ) and be distributed proportionally among its purposes (L 2002, ch 1, part A, § 23). These purposes include programs benefitting uninsured and underinsured children (Child Health Plus), and expanded and catastrophic health care programs, as well as rural health care delivery and access programs ( see Public Health Law § 2807- l [1]).