BILL NUMBER: S3366
SPONSOR: RIVERA
 
TITLE OF BILL:
An act to amend the public health law, in relation to hospital estab-
lishment
 
PURPOSE OR GENERAL IDEA OF BILL:
To ensure that individuals or entities with decision-milking power
regarding the operation of a hospital are subject to approval for estab-
lishment by the Public Health and Health Planning Council. Outlines
detailed criteria and exceptions for such approval, emphasizing the
importance of regulatory oversight in maintaining the quality and integ-
rity of healthcare facilities.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends subdivision 1 of section 2801-a of the Public Health
Law, as it relates to the establishment of incorporation of hospitals,
to include new subdivisions new (b), (c), and (d). The bill specifies
that a person, partnership, company, stockholder, member, corporation,
or other entity would be deemed to have authority to operate a hospital
if they have or share the decision-making authority over any of the
following items listed in new subdivision (c). It would require such
person or entity to obtain establishment approval by the Public Health
and Health Planning Council (PHHPC) and outlines that any assignment or
delegation of operational authority is subject to establishment
approval, except for an assignment or delegation to a committee, corpo-
rate officer, or an employee of the hospital or a management contract
for day-to-day operations of a hospital and such contract would require
the written approval of the Commissioner of Health (COH) before taking
effect.
Section 2 sets an effective date.
 
JUSTIFICATION:
The proposed amendments to the Public Health Law represent a critical
step towards guaranteeing complete monitoring and responsibility in the
development and operation of hospitals. Currently, the law requires
consent from the PHHPC before establishing or changing ownership of a
hospital, ensuring a thorough review of public needs. However, there is
a lack of monitoring for corporate entities that exercise "passive"
control over hospitals, rather than directly engaging in day-to-day
operational choices.
These "passive" corporate arrangements have increasingly played a role
in hospital mergers, networks, and affiliations, often leading to the
reduction or elimination of vital healthcare services within communi-
ties. Without explicit inclusion in the establishment approval process
these arrangements bypass the necessary scrutiny regarding their impact
on public health.
By clarifying the definitions of operational authority over a hospital
to encompass "passive" control corporate models, this bill seeks to
address this regulatory gap. Under the proposed bill, any entity exer-
cising control would be required to obtain approval from PHHPC for
establishment permission. This would ensure that all arrangements influ-
encing hospital operations, whether direct or indirect, are thoroughly
reviewed to protect the provision of healthcare services in communities.
Furthermore, by subjecting these arrangements to institutional approval,
the measure fosters transparency and accountability in healthcare gover-
nance. It connects regulatory monitoring with the changing landscape of
hospital ownership and management structures, instilling greater trust
in the integrity of healthcare delivery systems.
In essence, the amendments proposed in this bill uphold the fundamental
principle that access to quality healthcare is a cornerstone of public
welfare. By extending establishment approval requirements to include
"passive" control corporate models, the bill reinforces the commitment
to protect and promote the health and well-being of all individuals and
communities across the state.
 
PRIOR LEGISLATIVE HISTORY:
2024: S8987-A / A5375-A Paulin
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately but only applies prospective to
new submissions to PHHPC.

Statutes affected:
S3366: 2801-a public health law, 2801-a(1) public health law