Part 790 - Hospice Establishment

Effective Date: 
Friday, March 23, 1984
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Section 4004

Section 790.1 - Applications for establishment

Section 790.1 Applications for establishment. (a) An application to the Public Health Council for its approval, as required by law, shall be in writing on application forms provided by the department and subscribed by the chief executive officer duly authorized by the board of a corporate applicant, a general partner or proprietor of the hospice or the proposed hospice, or, where an application is to be submitted by a local government applicant, the president or chairman of the board of the proposed hospice or the chief executive officer if there is no board; and accompanied by a certified copy of a resolution of the board of a corporate applicant authorizing the undertaking which is the subject of the application, and the subscribing and submission thereof by an appropriate designated individual. In the event that an application is to be submitted by an entity which necessarily remains to be legally incorporated, it shall be subscribed and submitted by one of the proposed stockholders or directors. If a local government applicant submitting an application has not designated a president, chairman or chief executive officer for the proposed hospice, the application shall be subscribed by the chairman or president of the local legislature or board of supervisors having jurisdiction, or other appropriate executive officer. An original application and eight copies thereof shall be prepared. The original and eight copies shall be filed with the Public Health Council through the Project Management Unit in the department's central office in Albany which shall transmit one copy to the health systems agency having jurisdiction.

(b) Applications to the council shall contain information and data with reference to:

(1) the public need for the existence of the hospice or proposed hospice at the time and place and under the circumstances proposed;

(2) the character, experience, competency and standing in the community of the proposed incorporators, directors, officers, stockholders, sponsors, individual operators or partners:

(3) the financial resources and sources of future revenue of the hospice or proposed hospice to be operated by the applicant; and

(4) the fitness and adequacy of the premises and equipment to be used by the applicant for the hospice or proposed hospice.

(c) The following documents shall be filed as attachments to the application:

(1) where the applicant will be operating the hospice under an assumed name, a photocopy of the applicant's executed proposed certificate of doing business;

(2) where the applicant is a partnership, full and true copies of all partnership agreements, which shall include the following language:

"By signing this agreement, each member of the partnership created by the terms of this agreement acknowledges that the partnership and each member thereof has a duty to report to the New York State Department of Health any proposed changes in the membership of the partnership. The partners also acknowledge that the prior written approval of the Public Health Council is necessary for such change before such change is made, except that a change resulting from an emergency caused by the severe illness, incompetency or death of a member of the partnership shall require immediate notification to the New York State Department of Health of such fact and application shall be made for the approval by the Public Health Council of such change within 30 days of the commencement of such emergency. The partners also acknowledge that they shall be individually and severally liable for failure to make the aforementioned reports and/or applications"; and

(3) such additional pertinent information or documents necessary for the council's consideration, as requested.
 

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Section 790.2 - Requirements for approval

790.2 Requirements for approval. (a) The application must be complete and in proper form. It shall provide all the information essential for the Public Health Council's consideration.

(b) The applicant must satisfactorily demonstrate to the council:

(1) that there is a public need for the hospice or the proposed new hospice;

(2) (i) if a not-for-profit corporation, that the members of the board of directors and the officers of the corporation are of such character, experience, competence and standing as to give reasonable assurance of their ability to conduct the affairs of the corporation in its best interests and in the public interest and to provide proper care for those to be served by the hospice or the proposed hospice;

(ii) if a proprietary business, that the owner, or all the partners of a partnership, are persons of such character, experience, competence and standing as to give reasonable assurance of their ability to conduct the affairs of the business in its best interests and in the public interest and to provide proper care for those to be served by the hospice or the proposed hospice;

(iii) if a business corporation, that the members of the board of directors, the officers and the stockholders of the corporation or, in the case of an application solely for a change in the principal stockholder(s), that the proposed new principal stockholder(s) of the corporation are of such character, experience, competence and standing as to give reasonable assurance of their ability to conduct the affairs of the corporation in its best interest and in the public interest and to provide proper care for those to be served by the hospice or the proposed hospice; and

(3) that there are adequate finances and sources of future revenue to properly establish and conduct the hospice or the proposed hospice.

(c) The applicant must supply:

(1) any additional information requested by the department within 3O days of such request, or must obtain from the department an extension of the time in which to provide such information. Any request for such extension of time shall set forth the reasons why such information could not be obtained within the prescribed time. The granting of such extension of time shall be at the discretion of the commissioner, providing such extensions are not for more than 30 days and the commissioner is satisfied as to the reasons why such information could not be obtained within the prescribed time. The commissioner is authorized to deny a request for an extension of time. Failure to provide such information within the time prescribed shall constitute an abandonment and withdrawal of the application.

(2) any authorization the department requests in order to verify any information contained in the application or to obtain additional information which the department finds is pertinent to the application. Failure to provide such authorization shall constitute an abandonment and withdrawal of the application.

(d) Whenever any applicant proposes to lease premises in which a hospice residence or the inpatient component of a hospice is to be provided, the lease agreement shall include the following language:

"The landlord acknowledges that its rights of reentry into the premises set forth in this lease do not confer on it the authority to operate a hospital or hospice as defined in articles 28 and 40, respectively, of the Public Health Law on the premises and agrees to provide the New York State Department of Health, Mayor Erastus Corning 2nd Tower, The Governor Nelson A. Rockefeller Empire State Plaza, Albany, N.Y. 12237, with notification by certified mall of its intent to reenter the premises or to initiate dispossess proceedings or that the lease is due to expire, at least 30 days prior to the date on which the landlord intends to exercise a right of reentry or to initiate such proceedings or at least 60 days before expiration of the lease."

(e) No lease covering the hospice office site or the premises in which a hospice residence or the inpatient component of a hospice as defined in article 40 of the Public Health Law is to be conducted, and no lease covering any equipment used in the operation of a hospice, may contain any provision whereby rent, or any increase therein is based upon the Consumer Price Index or any other cost of living index. In the event the lease covering such hospice premises or equipment contains provisions whereby it is the lessor's responsibility to pay necessary expenses associated with such premises or equipment, such as real estate taxes, utilities, heat, insurance, maintenance and operating supplies, such lease may contain provisions which allow adjustments to the rent only to the extent necessary to compensate the lessor for changes in such expenses.

(f) For purposes of this Article, principal stockholder means any person who owns or has the power to vote 10 percent or more of the issued and outstanding stock of a corporation which is requesting or has received approval to operate a hospice pursuant to article 40 of the Public Health Law.

Effective Date: 
Wednesday, June 6, 2007
Doc Status: 
Complete

Section 790.3 - Amendments to applications

790.3 Amendments to applications. (a) An application made to the Public Health Council pursuant to this Part may be amended while the matter is pending before the council. Such amendments shall be made on appropriate forms supplied by the department, and submitted to the council through the department's central office in Albany which received the application.

(b) Any amendment to an application which constitutes a substantial change in the information contained in the original application, or any prior amendments thereto, must be accompanied by a satisfactory written explanation as to the reason such information was not contained in the original application.

(c) Prior to the issuance of a certificate of approval, any substantial alteration of the method of financing, or of the terms of a lease of the land, building or equipment, or change of the principals as considered by the council, shall constitute an amendment.

(d) Failure to disclose an amendment prior to the issuance of a certificate of approval shall constitute sufficient grounds for the revocation, limitation or annulment of the approval of establishment.
 

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Section 790.4 - Withdrawals of applications

790.4 Withdrawals of applications. An application made to the Public Health Council in accordance with this Part may, on written request of the applicant, be withdrawn prior to decision by the council at any time without prejudice to resubmission.
 

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Section 790.5 - Revocation, limitation or annulment of approvals of establishments

790.5 Revocation, limitation or annulment of approvals of establishment (a) An approval of establishment may be revoked, limited or annulled by the Public Health Council if the council finds that:

(1) the established operator has been guilty of fraud or deceit in procuring such approval of establishment or has made statements or furnished information in support of the application which were not true, accurate, or complete in any material respect;

(2) the hospice certificate of approval has been revoked, limited or annulled pursuant to the applicable provisions of law;

(3) the hospice has failed to comply with the provisions of article 40 of the Public Health Law or the rules and regulations promulgated thereunder;

(4) the established operator has had such a change in financial condition or in the fiscal aspects of the hospice since the approval of establishment as to render the project economically unfeasible or render unsatisfactory the financial resources of the hospice and its sources of future revenue;

(5) the established operator has been convicted in a court of competent jurisdiction, either within or without the State, of a crime;

(6) the established operator is a habitual drunkard or is addicted to the use of morphine, cocaine or other drugs having similar effect, or has become mentally disabled;

(7) the established operator has transferred ownership interest in the operation of the hospice without Public Health Council approval, or that such person has terminated participation in the operation of the hospice;

(8) the established operator has granted any person convicted of a crime relating to hospice or hospital activities the authority to direct or cause the direction of the operations, management or policies of the hospice; or

(9) another corporation has been granted or has obtained ownership of stock or the voting rights thereunder, of the hospice corporation.

(b) For purposes of this section, established operator shall include any person, partnership, or partner thereof, and any corporation or stockholder, officer or director, thereof, actual or proposed, whose application for establishment has been approved, regardless of whether a certificate of approval has been issued.
 

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Section 790.6 - Hearings

790.6 Hearings. (a) Necessary hearings shall be conducted by the Public Health Council, a committee of the council, or a person designated by the council.

(b) Requests for hearings by applicants shall be made within 20 days after notification that such request may be made. If such request is made by the State Hospital Review and Planning Council or by a health systems agency, it must be made within 10 days subsequent to the meeting of such council or agency which took place after notification that such request may be made.
 

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Section 790.7 - Decisions

790.7 Decisions. (a) Copies of the resolution of the Public Health Council approving or disapproving an application shall be transmitted to the applicant, the State Hospital Review and Planning Council, the appropriate health systems agency and the Commissioner of Health.

(b) Copies of a notice that the council is considering the disapproval of an application or action contrary to the recommendation of the State Hospital Review and Planning Council or a health systems agency and affording an opportunity to request a public hearing shall be transmitted to the applicant, to the State Hospital Review and Planning Council, the appropriate health systems agency and the Commissioner of Health.
 

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Section 790.8 - Governing authority or operator

790.8 Governing authority or operator. (a) The governing authority or operator is the party responsible for the operation of a hospice.

(b) The governing authority or operator shall mean:

(1) the policy-making body of a government agency;

(2) the officers and the board of directors or trustees of a not-for-profit corporation;

(3) the officers, board of directors and stockholders of a business corporation; and

(4) the proprietor or proprietors of a proprietary hospice.

(c) An individual, partnership, corporation, organization or agency which has not received establishment approval may not participate in the total gross income or net revenue of a hospice.
 

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Section 790.9 - Agents, nominees and fiduciaries

790.9 Agents, nominees and fiduciaries. Agents, nominees and fiduciaries, whether testamentary or inter vivos, shall not own or have the power to control any interest in the operation of a hospice nor shall they be considered proper applicants for establishment or transfer of interest in, or ownership of, stock in a corporation that operates a hospice.
 

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Section 709.10 Reserved

Section 790.10 - Establishment of not-for-profit corporations

790.10 Establishment of not-for-profit corporations. A not-for-profit corporation seeking Public Health Council approval to be established as the operator of a hospice shall comply with the other applicable provisions of this Part and, in addition, shall furnish the council with a photocopy of its executed proposed corporate certificate.
 

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Section 790.11 - Establishment of business corporations

790.11 Establishment of business corporations. Only a natural person may own, hold or have the power to vote the stock in a corporation that operates a hospice. Persons seeking the approval of the Public Health Council for the formation of a business corporation to be established as the operator of a hospice shall provide, in addition to meeting the other applicable requirements of this Part, information, documents and data as follows:

(a) A photocopy of the executed proposed certificate of incorporation which shall, in all respects, conform to the applicable provisions of the Business Corporation Law and all other pertinent laws of the State of New York. Such certificate of incorporation shall contain provisions to the following effect:

(1) The corporate powers and purposes shall be limited to the ownership and operation, or operation, of a hospice or hospices specifically named and the location or locations of which are specifically designated by city, town, village and county; provided, however, that the corporate powers and purposes may also include the ownership and operation, or operation, of a hospital or hospitals, as defined in article 28 of the Public Health Law, or of a certified home health agency or licensed home care services agency or agencies as defined in article 36 of the Public Health Law, or a health maintenance organization as defined in article 44 of the Public Health Law; if the corporation has received all approvals required under such law to own and operate such hospital or hospitals, home care services agency or agencies or health maintenance organization.

(2) The location of the principal office of the corporation which shall be at the same address as a hospice, hospital, home care services agency or health maintenance organization which is to be operated by the corporation in the State of New York.

(3) No person shall own or have the power to vote 10 percent or more of the issued and outstanding stock of the corporation unless the Public Health Council has approved such ownership or control.

(4) All stock certificates of the corporation shall bear on the face thereof the following:

(i) No person shall own or control 10 percent or more of the stock or voting rights thereunder of the corporation unless the Public Health Council has first approved such ownership or control.

(ii) Any transfer, assignment or other disposition of the stock or voting rights thereunder of the corporation which results in the ownership or control of 10 percent or more of the stock or voting rights thereunder of the corporation by any person shall be subject to the prior approval by the Public Health Council.

(iii) No stock or voting rights thereunder of the corporation may be owned or controlled by another corporation.

(5) Stock shall consist of one class of common stock only.

(b) An affidavit from each applicant setting forth:

(1) that the applicant is to be the sole beneficial owner of the voting shares of the corporation of which the applicant is to be the holder of record;

(2) the number of voting shares in the corporation of which the applicant is to be the holder of record; and

(3) that all stock authorized by the certificate of incorporation will be issued and outstanding.

(c) A copy of the proposed stock certificate bearing imprinted on the face thereof the following:

(1) No person shall own or control 10 percent or more of the stock or voting rights thereunder of the corporation unless the Public Health Council has first approved such ownership or control.

(2) Any transfer, assignment or other disposition of the stock or voting rights thereunder of the corporation which results in the ownership or control of 10 percent or more of the stock or voting rights thereunder of the corporation by any person shall be. subject to the prior approval by the Public Health Council.

(3) No stock or voting rights thereunder of the corporation may be owned or controlled by another corporation.

(d) Such additional pertinent information or documents necessary for Public Health Council consideration, as requested.
 

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Section 790.12 - Reporting by business corporations

790.12 Reporting by business corporations. Within 30 days after the approval of establishment, the corporation shall furnish to the department a list of the names of all of the shareholders and the number and percent of the total issued and outstanding shares of the corporation held by each, duly certified by the secretary of the corporation as to completeness and accuracy, and shall thereafter furnish such a certified list at annual intervals. Failure to comply with the provisions of this section shall constitute sufficient grounds for the revocation, limitation or annulment of the approval of establishment.
 

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Section 790.13 - Transfers of interest by sole proprietors or partnerships

790.13 Transfers of interest by sole proprietors or partnerships. An individual or partnership seeking Public Health Council approval for the transfer of all or part of the ownership of the business shall file, in addition to meeting the other applicable requirements of this Part, information, documents and data as follows:

(a) a photocopy of the applicant's executed proposed certificate of doing business;

(b) where the applicant is a partnership, full and true copies of all partnership agreements;

(c) a declaration of the percentage of the business to be transferred;

(d) a financial statement setting forth the purchase price of the interest in the business being sold and the financial resources available to make such purchase, or the basis on which such transfer is to be financed;

(e) where any transfer is to be by gift, a statement of the relationship between the donor and the donee; and

(f) such additional pertinent information or documents necessary for Public Health Council consideration, as requested.
 

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Section 790.14 - Transfers of stock

790.14 Transfers of stock. An individual who proposes to become a principal stockholder in a business corporation shall file, in addition to meeting the other applicable requirements of this Part, information, documents and data as follows:

(a) a copy of the document giving approval for the incorporation of the hospice business;

(b) an affidavit from each applicant setting forth:

(1) that the applicant is to be the sole beneficial owner of the voting shares of the corporation of which the applicant is to be the holder of record; and

(2) the number of voting shares of the corporation of which the applicant is to be the holder of record;

(c) an affidavit from the transferor of the stock setting forth the transferor's name and address and stating:

(1) the number of voting shares of the corporation which the transferor proposes to transfer to the applicant; and

(2) the purchase price of the shares to be transferred to the applicant;

(d) the financial resources available for the acquisition of the stock to be transferred, or the basis on which such transfer is to be financed;

(e) if such transfer of stock is to be by gift, a statement of the relationship between the donor and the donee; and

(f) such additional pertinent information or documents necessary for the Public Health Council's consideration, as required.
 

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Section 790.15 - Limitation on transfer

790.15 Limitation on transfer. Any transfer pursuant to section 790.13 or 790.14 of this Part shall be completed within 90 days of issuance by the Public Health Council of its approval for such transfer unless extended by the council and the council is notified of the transfer within 10 days thereafter. Any request for an extension of time shall set forth the reasons why such transfer could not be completed within the prescribed time. Failure to complete a transfer within the time prescribed or as extended by the council or failure to notify the council within the time prescribed shall constitute abandonment and withdrawal of the application.
 

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Section 790.16 - Determinations of public need for hospice

790.16 Determinations of public need for hospice. (a) The following methodology will be utilized in the evaluation of applications involving the establishment and/or construction of a hospice and the need for hospice care and services. It is intended that this methodology, when used in conjunction with the planning standards and criteria set forth in section 709.1 of this Title, which are also applicable to the determination of need for hospice and which are incorporated herein, represent a statement of basic principles and planning/decisionmaking tools for guiding and directing the development and expansion of hospice care and services throughout the State. The methodology is conceptually based on the application of uniform planning objectives at the health systems agency and/or State level. Its purpose is to provide guidance, to permit flexibility and to assist the health systems agencies, the State Hospital Review and Planning Council, the Public Health Council, the commissioner and potential applicants in determining the future need for hospice care and services. The objective of the methodology is to ensure that an adequate supply of hospice care and services is available and accessible, while at the same time avoiding the proliferation of unneeded hospices and hospice services.

(b) The commissioner shall designate hospice planning areas within each health systems agency region among which the need estimates calculated pursuant to this section will be allocated. Such areas may include a single county or two or more contiguous counties. In developing hospice planning areas, the commissioner shall seek the advice and recommendations of the health systems agencies and the State Hospital Review and Planning Council. Factors which shall be considered by each health systems agency and the council in making recommendations and by the commissioner in designating hospice planning areas shall include, but need not be limited to, the following:

(1) provider and patient travel patterns, including driving time and availability of public transportation;

(2) the availability of existing hospice care and services; and

(3) other factors identified by the health systems agencies.

(c) The factors and methodology to be utilized by the Public Health Council and/or the commissioner as appropriate, in estimating the public need for hospice, shall include, but need not be limited to, the following:

(1) An estimate shall be made of the number of cancer and noncancer terminally ill patients who would seek and be appropriate for hospice care in each planning area. Estimates will be based on the most current cancer mortality data compiled by the department's Bureau of Vital Statistics.

(2) The department shall estimate the number of cancer patients appropriate for hospice, based on the number of annual cancer deaths and the projection that 40 percent of such patients would seek and be appropriate for hospice.

(3) A number equal to 10 percent of the number of cancer patients determined appropriate for hospice care in paragraph (2) of this subdivision shall be added to such number of cancer patients to determine the total number of patients appropriate for hospice for each planning area. This total number will then be projected five years into the future based on the most current New York State Department of Commerce population projections to estimate the number of individuals who would seek and be appropriate for hospice. For purposes of this methodology, it is assumed that cancer deaths per year per 1,000 population will remain constant for the period of the projection. This number will represent the number of projected hospice cases. A hospice case is defined as an individual admitted to a hospice.

(4) The total number of projected hospice cases shall be multiplied by 63 days to reflect the expected average length of stay in a hospice, in order to provide the expected number of patient days of hospice care. This number is then divided by 365 (days) to arrive at the expected average daily hospice caseload capacity to meet the need for hospice.

(5) The estimated need for hospice inpatient beds or dually certified hospice residence beds shall be equal to a number no greater than 20 percent of the expected average daily hospice caseload capacity divided by 0.85 to reflect an expected occupancy rate for hospice beds.

(d) A health systems agency may submit a plan to the department which proposes adjustments to hospice need estimates within its area. The Public Health Council and/or commissioner, as appropriate, with advice of the State Hospital Review and Planning Council, may reject or approve and implement all or a portion of the proposed adjustments based upon consideration of pertinent factors, including but not necessarily limited to the following:

(1) whether the proposed adjustments reflect consistency with the objectives and requirements of this section and section 709.1 of this Title; and (2) whether the proposed adjustments identify special populations.

(e) (1) The hospice need estimates for each planning area, together with any approved adjustments determined under this section, shall constitute the estimate of public need for hospice for the defined area.

(2) Public need shall be deemed satisfied for a planning area when the daily average caseload capacity of existing and approved hospices is adequate to meet the estimate of public need for hospice for the planning area.

(f) In addition to meeting the other applicable provisions of this section, an applicant for initial certification shall be approved as meeting public need only if the applicant:

(1) agrees to serve the entire hospice planning area. Pursuant to the procedure set forth in section 709.1(c) of this Title, exceptions to serving the entire planning area may be permitted under special circumstances, including but not limited to those set forth in subparagraphs (i)-(iii) of this paragraph, provided that the hospice agrees to serve the entire alternate service area designated for such hospice. Such circumstances include:

(i) geographic barriers and/or travel time which may impede service delivery to the entire planning area;

(ii) proposals in which an applicant will focus its program of care in specific underserved areas which form only a portion of a planning area; and

(iii) other factors identified by the local health systems agency;

(2) agrees to serve population groups in the planning area that have difficulty gaining access to appropriate hospice care due to minority status, age, medical history, case complexity or payment source; and

(3) agrees to provide charity care to medically indigent persons. For the purpose of this paragraph, charity care to the medically indigent shall mean the provision of hospice care and services at no charge or reduced charge to patients who are unable to pay full charges or any charges, are not eligible for covered benefits under title XVIII or XIX of the Social Security Act, are not covered by private insurance and whose household income is less than 200 percent of the Federal poverty level.

(g) For initial certification of proposed hospices and when public need is established herein, priority consideration will be given to applicants who demonstrate that they will maximize the use of appropriate hospice home care, outpatient and other communitybased services.

Effective Date: 
Wednesday, June 6, 2007
Doc Status: 
Complete