N.Y. Public Health Law Section 2806-A
Temporary operator

1.

For the purposes of this section:

(a)

“adult care facility” shall mean an adult home or enriched housing program licensed pursuant to article seven of the social services law or an assisted living residence licensed pursuant to article forty-six-B of this chapter;

(b)

“established operator” shall mean the operator of an adult care facility, a general hospital or a diagnostic and treatment center that has been established and issued an operating certificate as such pursuant to this article;

(c)

“facility” shall mean (i) a general hospital or a diagnostic and treatment center that has been issued an operating certificate as such pursuant to this article; or

(ii)

an adult care facility;

(d)

“temporary operator” shall mean any person or entity that:

(i)

agrees to operate a facility on a temporary basis in the best interests of its residents or patients and the community served by the facility; and

(ii)

has demonstrated that he or she has the character, competence and financial ability to operate the facility in compliance with applicable standards;

(e)

“serious financial instability” shall include but not be limited to defaulting or violating key covenants of loans, or missed mortgage payments, or general untimely payment of obligations, including but not limited to employee benefit fund, payroll tax, and insurance premium obligations, or failure to maintain required debt service coverage ratios or, as applicable, factors that have triggered a written event of default notice to the department by the dormitory authority of the state of New York; and

(f)

“extraordinary financial assistance” shall mean state funds provided to a facility upon such facility’s request for the purpose of assisting the facility to address serious financial instability. Such funds may be derived from existing programs within the department, special appropriations, or other funds.

(g)

“improper delegation of management authority by the governing authority or operator” of a general hospital shall include, but not be limited to, the delegation to an entity that has not been established as an operator of the general hospital of (i) authority to hire or fire the administrator or other key management employees;

(ii)

maintenance and control of the books and records;

(iii)

authority over the disposition of assets and the incurring of liabilities on behalf of the facility; and

(iv)

the adoption and enforcement of policies regarding the operation of the facility. The criteria set forth in this paragraph shall not be the sole determining factors, but indicators to be considered with such other factors that may be pertinent in particular instances. Professional expertise shall be exercised in the utilization of the criteria. All of the listed indicia need not be present in a given instance for there to be an improper delegation of authority.

2.

(a) In the event that:

(i)

a facility seeks extraordinary financial assistance and the commissioner finds that the facility is experiencing serious financial instability that is jeopardizing existing or continued access to essential services within the community, or

(ii)

the commissioner finds that there are conditions within the facility that seriously endanger the life, health or safety of residents or patients, the commissioner may appoint a temporary operator to assume sole control and sole responsibility for the operations of that facility, or

(iii)

the commissioner finds that there has been an improper delegation of management authority by the governing authority or operator of a general hospital, the commissioner shall appoint a temporary operator to assume sole control and sole responsibility for the operations of that facility. The appointment of the temporary operator shall be effectuated pursuant to this section and shall be in addition to any other remedies provided by law.

(b)

The established operator of a facility 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 to restore or maintain the provision of quality care to the residents or patients or alleviate the facility’s financial instability, enter into an agreement with the established operator for the appointment of a temporary operator to assume sole control and sole responsibility for the operations of that facility.

3.

(a) A temporary operator appointed pursuant to this section shall, prior to his or her appointment as temporary operator, provide the commissioner with a work plan satisfactory to the commissioner to address the facility’s deficiencies and serious financial instability and a schedule for implementation of such plan. A work plan shall not be required prior to the appointment of the temporary operator pursuant to clause (ii) of paragraph (a) of subdivision two of this section if the commissioner has determined that the immediate appointment of a temporary operator is necessary because public health or safety is in imminent danger or there exists any condition or practice or a continuing pattern of conditions or practices which poses imminent danger to the health or safety of any patient or resident of the facility. Where such immediate appointment has been found to be necessary, the temporary operator shall provide the commissioner with a work plan satisfactory to the commissioner as soon as practicable.

(b)

The temporary operator shall use his or her best efforts to implement the work plan provided to the commissioner, if applicable, and to correct or eliminate any deficiencies or financial instability in the facility and to promote the quality and accessibility of health care services in the community served by the facility. Such correction or elimination of deficiencies or serious financial instability shall not include major alterations of the physical structure of the facility. During the term of his or her appointment, the temporary operator shall have the sole authority to direct the management of the facility in all aspects of operation and shall be afforded full access to the accounts and records of the facility. The temporary operator shall, during this period, operate the facility in such a manner as to promote safety and the quality and accessibility of health care services or residential care in the community served by the facility. The temporary operator shall have the power to let contracts therefor or incur expenses on behalf of the facility, provided that where individual items of repairs, improvements or supplies exceed ten thousand dollars, the temporary operator shall obtain price quotations from at least three reputable sources. The temporary operator shall not be required to file any bond. No security interest in any real or personal property comprising the facility or contained within the facility, or in any fixture of the facility, shall be impaired or diminished in priority by the temporary operator. Neither the temporary operator nor the department shall engage in any activity that constitutes a confiscation of property without the payment of fair compensation.

4.

The temporary operator shall be entitled to a reasonable fee, as determined by the commissioner, and necessary expenses incurred during his or her performance as temporary operator, to be paid from the revenue of the facility. The temporary operator shall collect incoming payments from all sources and apply them to the reasonable fee and to costs incurred in the performance of his or her functions as temporary operator in correcting deficiencies and causes of serious financial instability. The temporary operator shall be liable only in his or her capacity as temporary operator for injury to person and property by reason of conditions of the facility in a case where an established operator would have been liable; he or she shall not have any liability in his or her personal capacity, except for gross negligence and intentional acts.

5.

(a) The initial term of the appointment of the temporary operator shall not exceed one hundred eighty days. After one hundred eighty days, if the commissioner determines that termination of the temporary operator would cause significant deterioration of the quality of, or access to, health care or residential care in the community or that reappointment is necessary to correct the conditions within the facility that seriously endanger the life, health or safety of residents or patients, or the financial instability that required the appointment of the temporary operator, the commissioner may authorize up to two additional ninety-day terms.

(b)

Upon the completion of the two ninety-day terms referenced in paragraph (a) of this subdivision, (i) if the established operator is the debtor in a bankruptcy proceeding, and the commissioner determines that the temporary operator requires additional terms to operate the facility during the pendency of the bankruptcy proceeding and to carry out any plan resulting from the proceeding, the commissioner may reappoint the temporary operator for additional ninety-day terms until the termination of the bankruptcy proceeding, provided that the commissioner shall provide for notice and a hearing as set forth in subdivision six of this section; or

(ii)

if the established operator requests the reappointment of the temporary operator, the commissioner may reappoint the temporary operator for one additional ninety-day term, pursuant to an agreement between the established operator, the temporary operator and the department.

(c)

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:

(i)

the actions taken during the appointment to address such deficiencies and financial instability, (ii) objectives for the continuation of the temporary operatorship if necessary and a schedule for satisfaction of such objectives, (iii) recommended actions for the ongoing operation of the facility subsequent to the term of the temporary operator including recommendations regarding the proper management of the facility and ongoing agreements with individuals or entities with proper delegation of management authority; and

(iv)

with respect to the first ninety-day term referenced in paragraph (a) of this subdivision, a plan for sustainable operation to avoid closure, or transformation of the facility which may include any option permissible under this chapter or the social services law and implementing regulations thereof. The report shall reflect best efforts to produce a full and complete accounting.

(d)

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.

6.

(a) The commissioner, upon making a determination to appoint a temporary operator pursuant to paragraph (a) of subdivision two of this section shall, prior to the commencement of the appointment, cause the established operator of the facility to be notified of the determination 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 determination 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 date of such notice. At such meeting, the established operator shall have the opportunity to review and discuss all relevant findings. At such meeting or within ten additional business days, the commissioner and the established operator shall attempt to develop a mutually satisfactory plan of correction and schedule for implementation. In the event such plan of correction is agreed upon, the commissioner shall notify the established operator that the commissioner no longer intends to appoint a temporary operator. A meeting shall not be required prior to the appointment of the temporary operator pursuant to clause (ii) of paragraph (a) of subdivision two of this section if the commissioner has determined that the immediate appointment of a temporary operator is necessary because public health or safety is in imminent danger or there exists any condition or practice or a continuing pattern of conditions or practices which poses imminent danger to the health or safety of any patient or resident of the facility. Where such immediate appointment has been found to be necessary, the commissioner shall provide the established operator with a notice as required under this paragraph on the date of the appointment of the temporary operator.

(b)

Should the commissioner and the established operator be unable to establish a plan of correction pursuant to paragraph (a) of this subdivision, or should the established operator fail to respond to the commissioner’s initial notification, a temporary operator shall be appointed as soon as is practicable and shall operate pursuant to the provisions of this section.

(c)

The established operator shall be afforded an opportunity for an administrative hearing on the commissioner’s determination to appoint a temporary operator. Such administrative hearing shall occur prior to such appointment, except that the hearing shall not be required prior to the appointment of the temporary operator pursuant to clause (ii) of paragraph (a) of subdivision two of this section if the commissioner has determined that the immediate appointment of a temporary operator is necessary because public health or safety is in imminent danger or there exists any condition or practice or a continuing pattern of conditions or practices which poses imminent danger to the health or safety of any patient or resident of the facility. An administrative hearing as provided for under this paragraph shall begin no later than sixty days from the date of the notice to the established operator and shall not be extended without the consent of both parties. 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.

(d)

The commissioner shall, upon making a determination to reappoint a temporary operator for the first of an additional ninety-day term pursuant to paragraph (a) of subdivision five of this section, cause the established operator of the facility to be notified of the determination by registered or certified mail addressed to the principal office of the established operator. If the commissioner determines that additional reappointments pursuant to subparagraph (i) of paragraph (b) of subdivision five of this section are required, the commissioner shall again cause the established operator of the facility to be notified of such determination by registered or certified mail addressed to the principal office of the established operator at the commencement of the first of every two additional terms. Upon receipt of such notification at the principal office of the established operator and before the expiration of ten days thereafter, the established operator may request an administrative hearing on the determination to begin no later than sixty days from the date of the reappointment of the temporary operator. Any such hearing shall be strictly limited to the issue of whether the determination of the commissioner to reappoint the temporary operator is supported by substantial evidence.

7.

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 hereunder; nor shall anything contained in this section be construed to suspend during the term of the appointment of the temporary operator any obligation of the established operator or any other person for the 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.

8.

The commissioner shall cause the temporary president of the senate, the speaker of the assembly, and the chairs of the senate and the assembly health committees to be notified of the appointment of a temporary operator pursuant to paragraph (a) of subdivision two of this section upon such appointment. 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 appointment to the extent practicable under the circumstances and in the sole discretion of the commissioner. * NB Repealed April 1, 2031

Source: Section 2806-A — Temporary operator, https://www.­nysenate.­gov/legislation/laws/PBH/2806-A (updated Apr. 22, 2022; accessed Apr. 20, 2024).

2800
Declaration of policy and statement of purpose 2801
Definitions 2801‑A
Establishment or incorporation of hospitals 2801‑B
Improper practices in hospital staff appointments and extension of professional privileges prohibited 2801‑C
Injunctions 2801‑D
Private actions by patients of residential health care facilities 2801‑E
Voluntary residential health care facility rightsizing demonstration program 2801‑F
Residential health care facility quality incentive payment program 2801‑G
Community forum on hospital closure 2801‑H
Personal caregiving and compassionate caregiving visitors to nursing home residents during declared local or state health emergencies 2802
Approval of construction 2802‑A
Transitional care unit demonstration program 2802‑B
Health equity impact assessments 2803
Commissioner and council 2803‑A
Authority to contract 2803‑AA
Sickle cell disease information distribution 2803‑AA*2
Nursing home infection control competency audit 2803‑B
Uniform reports and accounting systems for hospital costs 2803‑C
Rights of patients in certain medical facilities 2803‑C‑1
Rights of patients in certain medical facilities 2803‑C‑2
Lesbian, gay, bisexual and transgender, and people living with HIV long-term care facility residents’ bill of rights 2803‑D
Reporting abuses of persons receiving care or services in residential health care facilities 2803‑E
Residential health care facilities 2803‑E*2
Reporting incidents of possible professional misconduct 2803‑F
Respite projects 2803‑G
Board of visitors in county owned residential health care facility 2803‑H
Health related facility 2803‑I
General hospital inpatient discharge review program 2803‑J
Information for maternity patients 2803‑J*2
Nursing home nurse aide registry 2803‑K
In-patient nasogastric feeding procedures 2803‑L
Community service plans 2803‑M
Discharge of hospital patients to adult homes 2803‑N
Hospital care for maternity patients 2803‑O
Hospital care for mastectomy, lumpectomy, and lymph node dissection patients 2803‑O‑1
Required protocols for fetal demise 2803‑P
Disclosure of information concerning family violence 2803‑Q
Family councils in residential health care facilities 2803‑R
Dissemination of information about the abandoned infant protection act 2803‑S
Access to product recall information 2803‑T
Preadmission information 2803‑U
Hospital substance use disorder policies and procedures 2803‑V
Lymphedema information distribution 2803‑V*2
Standing orders for newborn care in a hospital 2803‑W
Independent quality monitors for residential health care facilities 2803‑W*2
Disclosure of information concerning pregnancy complications 2803‑X
Requirements related to nursing homes and related assets and operations 2803‑Y
Provision of residency agreement 2803‑Z
Transfer, discharge and voluntary discharge requirements for residential health care facilities 2803‑Z*2
Antimicrobial resistance prevention and education 2804
Units for hospital and health-related affairs 2804‑A
State task force on clinical practice guidelines and medical technology assessment 2805
Approval of hospitals 2805‑A
Disclosure of financial transactions 2805‑B
Admission of patients and emergency treatment of nonadmitted patients 2805‑C
Every private proprietary nursing home having a capacity of eighty patients or more may have a licensed medical doctor in attendance, upo... 2805‑D
Limitation of medical, dental or podiatric malpractice action based on lack of informed consent 2805‑E
Reports of residential health care facilities 2805‑F
Money deposited or advanced for admittance to nursing homes 2805‑G
Maintenance of records 2805‑H
Immunizations 2805‑I
Treatment of sexual offense victims and maintenance of evidence in a sexual offense 2805‑J
Medical, dental and podiatric malpractice prevention program 2805‑K
Investigations prior to granting or renewing privileges 2805‑L
Adverse event reporting 2805‑M
Confidentiality 2805‑N
Child abuse prevention 2805‑O
Identification of veterans and their spouses by nursing homes, residential health care facilities, and adult care facilities 2805‑P
Emergency treatment of rape survivors 2805‑Q
Hospital visitation by domestic partner 2805‑R
Patients unable to verbally communicate 2805‑S
Circulating nurse required 2805‑T
Clinical staffing committees and disclosure of nursing quality indicators 2805‑U
Credentialing and privileging of health care practitioners providing telemedicine services 2805‑V
Observation services 2805‑W
Patient notice of observation services 2805‑X
Hospital-home care-physician collaboration program 2805‑Y
Identification and assessment of human trafficking victims 2805‑Z
Hospital domestic violence policies and procedures 2806
Hospital operating certificates 2806‑A
Temporary operator 2806‑B
Residential health care facilities 2807
Hospital reimbursement provisions 2807‑A
General hospital nineteen hundred eighty-six and nineteen hundred eighty-seven inpatient rates and charges 2807‑AA
Nurse loan repayment program 2807‑B
Outstanding payments and reports due under subdivision eighteen of section twenty-eight hundred seven-c, sections twenty-eight hundred se... 2807‑C
General hospital inpatient reimbursement for annual rate periods beginning on or after January first, nineteen hundred eighty-eight 2807‑D
Hospital assessments 2807‑D‑1
Hospital quality contributions 2807‑DD
Temporary nursing home stability contributions 2807‑E
Uniform bills 2807‑F
Health maintenance organization payment factor 2807‑I
Service and quality improvement grants 2807‑J
Patient services payments 2807‑K
General hospital indigent care pool 2807‑L
Health care initiatives pool distributions 2807‑M
Distribution of the professional education pools 2807‑N
Palliative care education and training 2807‑O
Early intervention services pool 2807‑P
Comprehensive diagnostic and treatment centers indigent care program 2807‑R
Funding for expansion of cancer services 2807‑S
Professional education pool funding 2807‑T
Assessments on covered lives 2807‑U
Transfers for tax credits 2807‑V
Tobacco control and insurance initiatives pool distributions 2807‑W
High need indigent care adjustment pool 2807‑X
Grants for long term care demonstration projects 2807‑Y
Pool administration 2807‑Z
Review of eligible federally qualified health center capital projects 2808
Residential health care facilities 2808‑A
Liability of certain persons 2808‑B
Certification of financial statements and financial information 2808‑C
Reimbursement of general hospital inpatient services 2808‑D
Nursing home quality improvement demonstration program 2808‑E
Residential health care for children with medical fragility in transition to young adults and young adults with medical fragility demonst... 2808‑E*2
Nursing home ratings 2809
Residential health care facilities 2810
Residential health care facilities 2811
Discounts and splitting fees with medical referral services 2812
Construction 2813
Separability 2814
Health networks, global budgeting, and health care demonstrations 2815
Health facility restructuring program 2815‑A
Community health care revolving capital fund 2816
Statewide planning and research cooperative system 2816‑A
Cardiac services information 2817
Community health centers capital program 2818
Health care efficiency and affordability law of New Yorkers (HEAL NY) capital grant program 2819
Hospital acquired infection reporting 2820
Home based primary care for the elderly demonstration project 2821
State electronic health records (EHR) loan program 2822
Residential care off-site facility demonstration project 2823
Supportive housing development program 2824
Central service technicians 2824*2
Surgical technology and surgical technologists 2825
Capital restructuring financing program 2825‑A
Health care facility transformation program: Kings county project 2825‑B
Oneida county health care facility transformation program: Oneida county project 2825‑C
Essential health care provider support program 2825‑D
Health care facility transformation program: statewide 2825‑E
Health care facility transformation program: statewide II 2825‑F
Health care facility transformation program: statewide III 2825‑G
Health care facility transformation program: statewide IV 2825‑H
Health care facility transformation program: statewide V 2826
Temporary adjustment to reimbursement rates 2827
Plant-based food options 2828
Residential health care facilities 2828*2
Essential support persons allowed for individuals with disabilities during a state of emergency 2829
Nursing homes 2830
Surgical smoke evacuation 2830*2
Regulation of the billing of facility fees
Green check means up to date. Up to date

Accessed:
Apr. 20, 2024

Last modified:
Apr. 22, 2022

§ 2806-A’s source at nysenate​.gov

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