Title: Section 794.2 - Contracts

Effective Date

08/31/2016

794.2 Contracts. (a) The governing authority may enter into contracts with appropriate qualified individuals, organizations, agencies and/or facilities, when necessary, to provide for those services required by patients/families when the hospice itself does not have sufficient staff or necessary equipment available to render such services directly.  

(1) Such contracts shall meet all applicable State and Federal requirements and shall specify: 

(i) each party's responsibilities, functions, objectives, financial arrangements and charges, including responsibility for supervision; 

(ii) that personnel meet the personnel requirements as set forth in section 794.3 of this Part, which can be verified by written documented evidence accessible to the hospice or department on request;  

(iii) that services provided by contract to the patient shall be authorized by the hospice in accordance with the plan of care developed by the hospice and that the contract provider agrees to abide by the patient care policies established by the hospice for its patients; 

(iv) that the contracting provider agrees to participate in patient/family care planning conferences as requested by the hospice; 

(v) that contracting providers who are licensed professionals agree to participate in: 

(a) the coordination of all aspects of the patient’s hospice care, including ongoing interdisciplinary comprehensive assessments, developing and evaluating the plan of care, and contributing to patient and family counseling and education; 

(b) the hospice’s quality assessment and performance improvement program; and 

(c) hospice sponsored in-service training. 

(vi) any provisions made for indemnification between the hospice and contracting providers; and 

(vii) the following terms and conditions: "Notwithstanding any other provision in this contract, the hospice remains responsible for (a) ensuring that any service provided pursuant to this contract complies with all pertinent provisions of Federal, State and local statutes, rules and regulations; (b) planning, coordinating and ensuring the quality of all services provided; and (c) ensuring adherence to the plan of care established for patients." 

(2) When a contract is with a licensed medical facility or certified home health agency, the service provided must be in compliance with the applicable provisions of Article 28 or 36 of the Public Health Law, respectively, and the applicable rules and regulations promulgated thereunder. If such statutory and regulatory provisions are inconsistent with the provisions of Article 40 of the Public Health Law or the regulations promulgated thereunder, then the contracting provider shall comply with the applicable provisions of Article 40 of the Public Health Law and the regulations promulgated thereunder. 

(3) When a contract is between the hospice and a Skilled Nursing Facility (SNF) /Intermediate Care Facility (ICF) to provide hospice services to residents of the SNF/ICF, the provisions of section 794.8 of this Part related to contracts shall also apply.  

(b) Except when a management contract has been approved pursuant to this section, the governing authority may not delegate its responsibility for the operation of the hospice to another organization, a parent or subsidiary corporation or through a managing authority contract. An improper delegation may be found to exist where the governing authority no longer retains authority over the operation and management of the hospice, including but not limited to such areas as:  

(1) authority to hire or fire the administrator; 

(2) authority for the maintenance and control of the books and records; 

(3) authority over the disposition of assets and the incurring of liabilities on behalf of the hospice; or 

(4) authority over the adoption and enforcement of policies regarding the operation of the hospice. 

(c) If the governing authority enters into a management contract, the requirements of this subdivision shall be met. 

(1) For the purpose of this section, a management contract is an agreement between a hospice's governing authority and a managing authority for the purpose of managing the day-to-day operation of the hospice or any portion thereof. 

(2) Management contracts shall be effective only with the prior written consent of the Commissioner, and shall include the following: 

(i) a description of the proposed roles of the governing authority and managing authority during the period of the proposed management contract. The description shall clearly reflect retention by the governing authority of ongoing responsibility for statutory and regulatory compliance; 

(ii) a provision that clearly recognizes that the responsibilities of the hospice's governing authority are in no way obviated by entering into the management contract, and that any powers not specifically delegated to the managing authority through the provisions of the contract remain with the governing authority; 

(iii) a clear acknowledgment of the authority of the Commissioner to void the contract pursuant to paragraph (9) of this subdivision; 

(iv) a plan for assuring maintenance of the fiscal stability, the level of service provided and the quality of care rendered by the hospice during the term of the management contract; 

(v) an acknowledgment that the costs of the contract are subject to all applicable provisions of Part 86 of this Title; 

(vi) a requirement that the reports described in paragraph (10) of this subdivision will be provided to the department and to the governing authority annually for the term of the management contract; 

(vii) an express representation that any management contract approved by the Commissioner is the sole agreement between the managing authority and the governing authority for the purpose of managing the day-to-day operation of the hospice or any portion thereof, and that any amendments or revisions to the management contract shall be effective only with the prior written consent of the Commissioner; and 

(viii) a provision that includes the terms of paragraph (8) of this subdivision. 

(3) No management contract shall be approved if the governing authority does not retain sufficient authority and control to discharge its responsibility as the certified operator. The following elements of control shall not be delegated to a managing authority; 

(i) direct independent authority to hire or fire the administrator; 

(ii) independent control of the books and records; 

(iii) authority over the disposition of assets and the authority to incur on behalf of the hospice liabilities not normally associated with the day-to-day operation of a hospice; and 

(iv) independent adoption of policies affecting the delivery of health care services. 

(4) In addition to a proposed written contract complying with the provisions of paragraph (2) of this subdivision, a governing authority seeking to enter into a management contract shall submit to the department, at least 60 days prior to the intended effective date, unless a shorter period is approved by the Commissioner due to extraordinary circumstances, the following: 

(i) documentation indicating that the proposed managing authority holds all necessary approvals to do business in New York State; 

(ii) documentation of the goals and objectives of the management contract, including a mechanism for periodic evaluation of the effectiveness of the arrangement in meeting these goals and objectives; 

(iii) evidence of the managing authority's financial stability; 

(iv) information necessary to determine that the character and competence of the proposed managing authority, and its principals, officers and directors, are satisfactory, including evidence that all agencies or health care facilities managed or operated, in or outside of New York State, have provided a high level of care; and 

(v) evidence that it is financially feasible for the hospice to enter into the proposed management contract, recognizing that the costs of the contract are subject to all applicable provisions of Part 86 of this Title. 

(5) During the period between a hospice's submission of a request for approval of a management contract and disposition of that request, a hospice may not enter into any arrangement for management contract services other than a written interim consultative agreement with the proposed managing authority. Any interim agreement shall reflect consistency with the provisions of this section, and shall be submitted to the department no later than five days after its effective date.  

(6) The term of a management contract shall be limited to three years and may be renewed only when authorized by the Commissioner, provided compliance with this section and the following provisions can be demonstrated: 

(i) that the goals and objectives of the contract have been met within specified timeframes; 

(ii) that the quality of care provided by the hospice during the term of the contract has been maintained or has improved; and 

(iii) that the reporting requirements contained in paragraph (10) of this subdivision have been met. 

(7) Any application for renewal shall be submitted at least 90 days prior to the expiration of the existing contract. 

(8) A hospice’s governing authority shall, within the terms of the contract, retain the authority to discharge the managing authority and its employees from their positions at the hospice with or without cause on not more than 90 days notice. In such event, the hospice shall notify the department in writing at the time the managing authority is notified. The hospice's governing authority shall provide a plan for the operation of the hospice subsequent to the discharge, to be submitted with the notification to the department. 

(9) A management contract shall terminate and be deemed cancelled, without financial penalty to the governing authority, not more than 60 days after notification to the parties by the department of a determination that the management of the hospice is so deficient that the health and safety of patients would be threatened by continuation of the contract. 

(10) Each managing authority shall submit annual reports to the department and the governing authority providing measurements of hospice performance in the following areas: 

(i) financial operations, including a balance sheet, any change in financial position, and a statement of revenues and expenses sufficient to determine liquidity, working capital, net operating margin and age, extent and type of payables and receivables; 

(ii) personnel; and 

(iii) services delivered. 

Volume

VOLUME E (Title 10)

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