NY State Senate Bill 2025-S3366

Senate Bill S3366

2025-2026 Legislative Session

Provides person/entity with authority to operate a hospital shall be subject to approval by public health and health planning council for establishment of hospital

download bill text pdf

Current Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 27, 2025	referred to health

2025-S3366 (ACTIVE) - Details

Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §2801-a, Pub Health L
Versions Introduced in 2023-2024 Legislative Session:: S8987

2025-S3366 (ACTIVE) - Summary

Makes various provisions regarding establishment of a hospital: provides that any person and various other listed entities (i.e., partnership, company, stockholder, member, corporation or other entity) with authority to operate a hospital, shall be subject to approval for establishment by the public health council (unless otherwise authorized to operate a hospital without such establishment approval); provides that any assignment or delegation of any authority to operate a hospital shall be subject to approval for establishment by the council (with certain specified exceptions); specifies circumstances under which a person, partnership, company, etc. shall be deemed to have authority to operate a hospital subject to approval for establishment by the council (with certain specified exceptions); specifies circumstances under which a person, partnership, company, etc. shall be deemed to have authority to operate a hospital (i.e., if it has decision-making authority over listed matters).

2025-S3366 (ACTIVE) - Sponsor Memo

                                 
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.

2025-S3366 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3366
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 27, 2025
                                ___________
 
 Introduced  by  Sen.  RIVERA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Health
 
 AN ACT to amend the public health law, in relation  to  hospital  estab-
   lishment
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Subdivision 1 of section 2801-a of the public  health  law,
 as amended by section 57 of part A of chapter 58 of the laws of 2010, is
 amended to read as follows:
   1.  (A)  No hospital, as defined in this article, shall be established
 except with the written approval of the public health and  health  plan-
 ning  council.  No certificate of incorporation of a business membership
 or not-for-profit corporation shall hereafter be  filed  which  includes
 among its corporate purposes or powers the establishment or operation of
 any  hospital,  as  defined  in  this  article,  or  the solicitation of
 contributions for any such purpose, or two or  more  of  such  purposes,
 except  with  the written approval of the public health and health plan-
 ning council, and when otherwise required by law of  a  justice  of  the
 supreme  court,  endorsed  on  or annexed to the certificate of incorpo-
 ration. No articles of  organization  of  a  limited  liability  company
 established pursuant to the New York limited liability company law which
 includes  among its powers or purposes the establishment or operation of
 any hospital as defined in this article, shall be filed with the depart-
 ment of state except upon the approval of the public health  and  health
 planning council.
   (B)  FOR  THE  PURPOSES  OF  THIS  SUBDIVISION, A PERSON (OTHER THAN A
 PERSON ACTING SOLELY AS A MEMBER OF THE GOVERNING BODY OF A HOSPITAL  OR
 AN  EMPLOYEE  OF A HOSPITAL), PARTNERSHIP, COMPANY, STOCKHOLDER, MEMBER,
 CORPORATION OR OTHER ENTITY SHALL BE DEEMED TO HAVE AUTHORITY TO OPERATE
 A HOSPITAL IF IT HAS OR SHARES DECISION-MAKING AUTHORITY OVER ANY OF THE
 FOLLOWING:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07047-01-5

 S. 3366                             2
 
   (I) APPOINTMENT OR DISMISSAL OF A HOSPITAL'S MANAGEMENT-LEVEL  EMPLOY-
 EES OR MEDICAL STAFF;
   (II)  ELECTION  OR REMOVAL OF MEMBERS OF THE GOVERNING BOARD OR CORPO-
 RATE OFFICERS OF THE HOSPITAL;
   (III) APPROVAL OF THE HOSPITAL'S OPERATING OR CAPITAL BUDGETS;
   (IV) ADOPTION, APPROVAL OR ENFORCEMENT  OF  THE  HOSPITAL'S  OPERATING
 POLICIES OR PROCEDURES;
   (V)   APPROVAL  OF  APPLICATIONS  FOR  CONSTRUCTION  OR  ESTABLISHMENT
 APPROVAL FILED BY OR ON BEHALF OF THE HOSPITAL;
   (VI) APPROVAL OF HOSPITAL  DEBT  NECESSARY  TO  FINANCE  THE  COST  OF
 COMPLIANCE WITH OPERATIONAL OR PHYSICAL PLANT STANDARDS REQUIRED BY LAW;
   (VII)  APPROVAL  OF  CONTRACTS  FOR  MANAGEMENT OF THE HOSPITAL OR FOR
 CLINICAL SERVICES AT THE HOSPITAL; AND
   (VIII) APPROVAL OF SETTLEMENTS OF ADMINISTRATIVE PROCEEDINGS OR  LITI-
 GATION  TO WHICH THE HOSPITAL IS PARTY THAT EXCEED THE HOSPITAL'S INSUR-
 ANCE COVERAGE OR COVERAGE BY ANY APPLICABLE SELF-INSURANCE FUND.
   (C) ANY PERSON, PARTNERSHIP, COMPANY, STOCKHOLDER, MEMBER,  OR  CORPO-
 RATION,  OR  OTHER  ENTITY WITH AUTHORITY TO OPERATE A HOSPITAL SHALL BE
 SUBJECT TO APPROVAL FOR ESTABLISHMENT BY THE PUBLIC  HEALTH  AND  HEALTH
 PLANNING COUNCIL UNDER THIS SECTION, UNLESS OTHERWISE AUTHORIZED BY THIS
 CHAPTER TO OPERATE A HOSPITAL WITHOUT SUCH ESTABLISHMENT APPROVAL.
   (D)  ANY ASSIGNMENT OR DELEGATION OF ANY AUTHORITY TO OPERATE A HOSPI-
 TAL, AS SET FORTH IN PARAGRAPH (B) OF THIS SUBDIVISION SHALL BE  SUBJECT
 TO  APPROVAL  FOR ESTABLISHMENT BY THE PUBLIC HEALTH AND HEALTH PLANNING
 COUNCIL UNDER THIS SECTION, EXCEPT FOR:
   (I) ASSIGNMENT OR DELEGATION BY THE GOVERNING BODY OF THE HOSPITAL  TO
 A COMMITTEE OF THE GOVERNING BODY, A CORPORATE OFFICER OR AN EMPLOYEE OF
 THE HOSPITAL; OR
   (II) A MANAGEMENT CONTRACT UNDER WHICH A GOVERNING BODY CONTRACTS WITH
 AN  ENTITY TO MANAGE DAY-TO-DAY OPERATIONS OF A HOSPITAL OR A PORTION OR
 SERVICE THEREOF, PROVIDED THAT SUCH A MANAGEMENT CONTRACT SHALL  REQUIRE
 THE WRITTEN APPROVAL OF THE COMMISSIONER BEFORE IT MAY TAKE EFFECT.
   §  2.  This act shall take effect immediately, provided, however, that
 the provisions of this act shall only apply to applications submitted to
 the public health and  health  planning  council  seeking  approval  for
 establishment after the effective date of this act.

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