S T A T E   O F   N E W   Y O R K
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                                  10765

                          I N  A S S E M B L Y

                              June 18, 2012
                               ___________

Introduced  by  COMMITTEE  ON  RULES -- (at request of M. of A. Peoples-
  Stokes) -- read once and referred to the Committee on Health

AN ACT to amend the public health law,  in  relation  to  directing  the
  commissioner of health to establish demonstration projects authorizing
  equity  investment in the operation of residential health care facili-
  ties

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section  2801-a  of  the  public health law is amended by
adding a new subdivision 17 to read as follows:
  17. (A) THE COMMISSIONER SHALL ON OR BEFORE DECEMBER THIRTY-FIRST, TWO
THOUSAND TWELVE, ESTABLISH UP TO TWO DEMONSTRATION PROJECTS TO  DEVELOP,
EVALUATE  AND  IMPLEMENT  AN  INNOVATIVE  APPROACH TO ENCOURAGING EQUITY
INVESTORS TO PROVIDE NEEDED FINANCIAL RESOURCES FOR AND HOLD  AN  EQUITY
INTEREST AS OPERATORS OF RESIDENTIAL HEALTH CARE FACILITIES. ONE PROJECT
SHALL  BE  IN  THE UPSTATE REGION OF THE STATE.  THE OTHER DEMONSTRATION
PROJECT SHALL BE IN A DOWNSTATE REGION IN THE STATE. IN ANTICIPATION  OF
THE  FINANCIAL  IMPACT  ON  RESIDENTIAL  HEALTH CARE FACILITIES FROM THE
STATE'S EXPANSION OF MANDATORY MANAGED CARE TO LONG TERM CARE  SERVICES,
THE  DEMONSTRATIONS  SHALL BE DESIGNED TO PROMOTE THE DEVELOPMENT OF NEW
SOURCES OF CAPITAL FOR THE OPERATION OF RESIDENTIAL HEALTH CARE  FACILI-
TIES, AND TO MEASURE THE ABILITY OF SUCH INVESTMENT TO POSITIVELY IMPACT
FACILITIES IN TERMS OF CAPITAL IMPROVEMENTS, INVESTMENT IN NEW TECHNOLO-
GY,  AND  IMPROVEMENT  TO  THE  QUALITY  OF CARE AND QUALITY OF LIFE FOR
FACILITY RESIDENTS MEASURED BY BROADLY ACCEPTED INDUSTRY METRICS INCLUD-
ING, BUT NOT LIMITED TO, THOSE RELATED TO REDUCTION IN RATES OF REHOSPI-
TALIZATON, MDS QUALITY INDICATORS, END OF LIFE CARE, MEDICAL ORDERS  FOR
LIFE-SUSTAINING  TREATMENT  AND NURSING FACILITY "CULTURE CHANGE" INITI-
ATIVES. THE FACILITIES  PARTICIPATING  IN  THE  DEMONSTRATIONS  AND  THE
COMMISSIONER  SHALL  MUTUALLY DEVELOP THE APPROPRIATE METRICS TO MEASURE
SUCH IMPACT WHICH SHALL SERVE AS THE BASIS FOR THE REPORT TO THE  GOVER-
NOR AND THE LEGISLATURE REQUIRED BY PARAGRAPH (H) OF THIS SUBDIVISION.
  (B)  FOR PURPOSES OF SUCH DEMONSTRATIONS, THE COMMISSIONER MAY APPROVE
DEMONSTRATION PROJECTS EACH INVOLVING THE  PURCHASE  OF  UP  TO  FIFTEEN

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD15664-03-2

A. 10765                            2

EXISTING  RESIDENTIAL  HEALTH  CARE  FACILITIES  WHICH HAVE HISTORIES OF
PROVIDING HIGH QUALITY CARE TO RESIDENTS.
  (C) THE EQUITY INVESTOR SHALL PARTICIPATE IN EACH FACILITY THROUGH THE
CREATION OF LIMITED LIABILITY COMPANIES ESTABLISHED TO OPERATE THE RESI-
DENTIAL HEALTH CARE FACILITIES.
  (D)  THE RESIDENTIAL HEALTH CARE FACILITIES MAY BE OPERATED BY LIMITED
LIABILITY COMPANIES FORMED PURSUANT TO  THE  LIMITED  LIABILITY  COMPANY
LAW,  WHOSE  MEMBERS  ARE  NOT  NATURAL  PERSONS SO LONG AS AT LEAST ONE
MEMBER OF SUCH LIMITED LIABILITY COMPANIES IS A NATURAL PERSON OF SUFFI-
CIENT EXPERIENCE AND EXPERTISE IN DELIVERING HIGH  QUALITY  NURSING  AND
HEALTH  RELATED  CARE  TO WHOM THE EQUITY INVESTOR HAS DELEGATED, TO THE
SATISFACTION OF THE PUBLIC HEALTH AND HEALTH PLANNING COUNCIL, RESPONSI-
BILITY FOR THE DAY TO DAY MANAGEMENT AND OPERATION OF THE FACILITY.
  (E) THE PROVISIONS OF PARAGRAPH (B) OF SUBDIVISION THREE AND PARAGRAPH
(C) OF SUBDIVISION FOUR OF THIS SECTION SHALL NOT APPLY  TO  THE  EQUITY
INVESTOR  OR  ITS  OWNERS; PROVIDED, HOWEVER, THAT THE PUBLIC HEALTH AND
HEALTH PLANNING COUNCIL MAY REQUIRE COMMERCIALLY  REASONABLE  DISCLOSURE
OF  THE IDENTITY OF LIMITED LIABILITY COMPANY MEMBERS, PROVIDED THAT THE
NUMBER OF INVESTORS IS NOT GREATER THAN THIRTY-FIVE.
  (F) THE PROVISIONS OF PARAGRAPHS (E) AND (F) OF  SUBDIVISION  FOUR  OF
THIS  SECTION  SHALL NOT APPLY TO RESIDENTIAL HEALTH FACILITIES OPERATED
PURSUANT TO THIS SUBDIVISION. NOTHING IN THIS SECTION SHALL  PROHIBIT  A
LIMITED  LIABILITY  COMPANY  FROM  BEING  THE SOLE MEMBER OF THE LIMITED
LIABILITY COMPANIES REFERRED TO IN PARAGRAPH (C) AND (D) OF THIS  SUBDI-
VISION  PROVIDED  THAT  THE FORMER LIMITED LIABILITY COMPANY OR AT LEAST
ONE OF ITS MEMBERS CONFORMS TO THE REQUIREMENTS OF SUCH PARAGRAPHS.
  (G) RESIDENTIAL HEALTH CARE FACILITIES PARTICIPATING  IN  THIS  DEMON-
STRATION  PROGRAM  SHALL  BE  SUBJECT  TO ALL OPERATING STANDARDS AS SET
FORTH IN THIS ARTICLE AND THE REGULATIONS PROMULGATED  PURSUANT  THERETO
AND  SHALL  BE  SUBJECT TO ANY PROVISIONS OF THIS CHAPTER FOR FAILURE TO
COMPLY WITH SUCH  STANDARDS.  ADDITIONALLY  FACILITIES  IN  THIS  DEMON-
STRATION PROGRAM SHALL COMPLY WITH ALL DEPARTMENT REGULATIONS PERTAINING
TO ADMISSIONS OF MEDICAID PATIENTS.
  (H)  NO LATER THAN TWO YEARS AFTER THE FIRST FACILITY COMMENCES OPERA-
TION PURSUANT TO THIS  DEMONSTRATION  PROGRAM,  THE  COMMISSIONER  SHALL
PROVIDE  THE  GOVERNOR,  THE  TEMPORARY  PRESIDENT OF THE SENATE AND THE
SPEAKER OF THE ASSEMBLY WITH A WRITTEN EVALUATION OF  THE  DEMONSTRATION
PROGRAMS.    SUCH  EVALUATION SHALL ADDRESS THE OVERALL EFFECTIVENESS OF
THE PROGRAM IN PROVIDING ACCESS TO  CAPITAL  INVESTMENT  BY  RESIDENTIAL
HEALTH CARE FACILITIES AND EVALUATE THE IMPACT PRIVATE EQUITY INVESTMENT
HAS  ON  THE QUALITY OF CARE AS EVIDENCED BY STAFF RETENTION AND QUALITY
INDICATORS, AND ACCESS TO CARE FOR VARIOUS RESIDENT POPULATIONS.
  (I) RESIDENTIAL HEALTH CARE FACILITIES PARTICIPATING  IN  THIS  DEMON-
STRATION  PROGRAM SHALL SUBMIT SUCH QUALITY REPORTS AS SHALL BE REQUIRED
AND DIRECTED BY THE COMMISSIONER, INCLUDING INFORMATION ON PATIENT  CARE
QUALITY  INDICATORS, STAFFING LEVELS AND PATTERNS AND ACCESS TO CARE FOR
VARIOUS PATIENT POPULATIONS.
  S 2. This act shall take effect on the sixtieth  day  after  it  shall
have  become  a  law; provided, however, that effective immediately, the
addition, amendment and/or repeal of any rule  or  regulation  necessary
for  the implementation of this act on its effective date are authorized
and directed to be made and completed on or before such effective date.