2013 New York Consolidated Laws
PBH - Public Health
Article 28 - (2800 - 2824*2) HOSPITALS
2806-A - Temporary operator.

 
    * § 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.
    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. 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; 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.
    * NB Repealed March 28, 2016