NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5426
SPONSOR: Hyndman TITLE OF BILL:
An act to amend the public health law, in relation to a moratorium on
new licensed home care service agency approvals; and to amend part B of
chapter 57 of the laws of 2018 amending the public health law and other
laws relating to limitations on licensed home care service agency
contracts and registration of licensed home care services agencies, in
relation to the moratorium on the processing and approval of applica-
tions seeking licensure of a licensed home care services agency
PURPOSE:
To enact revisions in New York's Laws governing the operation of
Licensed Home Care Services Agencies (LHCSAs) that have the effect of
repealing and modifying substantial changes-that could forever change,
irreparable harm and potentially extinguish maim longstanding small
businesses-that were included in the 2018 Health and Mental Hygiene
Article VII Budget Bill that was enacted into law as part of Chapter 57
of the Laws of 2018.
SUMMARY OF PROVISIONS:
Section 1-Provides compelling legislative intent that lays out the case
for why this legislation is necessary, chronicling the essential nature
of LHCSAs, demonstrating how important they are to our families, our
health care system and our local economies. Changes enacted as part of
the FY 2018-19 Budget are discussed and the conclusion is reached that
said changes threaten the very social and economic existence of. our
locally centered LHCSAs that generations of New Yorkers have come to
count on, letting them into their homes-to demonstrate care and compas-
sion-in times of trial and perseverance. The case for various amendments
and modifications that follow is laid out in detail.
Section 2-Provides important procedural and substantive due process
protections to LHCSAs by requiring that the Department of Health proac-
tively conduct at least seven public hearings-including at least one in
New York City, Long Island, Westchester County, The Capital Region,
Central New York and Western New York-to garner feedback and comments
before implementing any proposed methodologies that would place a limit
on the number of LHCSAs with which Managed Long Term Care Plans (MLTCP)
can contract.
In addition, methodologies scheduled to go into effect on October 1st,
2018 that would place a limit on the number of LHCSAs with which Managed
Long. Term Can Plans (MLTCP) can contract are deferred until October
1st, 2020. Additional methodologies scheduled to go into effect on Octo-
ber 1st, 2019 are deferred until October 1st, 2021.
Section 3-Strikes out recently added hurdles to licensure including
public need," "standing in the community" and "financial resources" for
LHCSAs to meet to receive approval. The pre-Chapter 57 of 2018 licensing
criteria are reestablished.
Section 4-Modifies changes enacted as part of Chapter 57 of 2018 to give
LHCSAs an additional year to register with the Department (from January
1st, 2019 to January 1st, 2020); reduces and relaxes language requiring
onerous compounding fees upon LHCSAs who do not register in a timely
manner and scales back the power of the Department of Health to pursue
license revocation for the sole act of not registering in a timely
manner.
Section 5-Strikes out the LHCSA moratorium enacted as part of Chapter 57
of 2018, which went into effect on April 1st-and instead schedules it
for an effective date of April 1st, 2020 and a sunset date of March 31,
2022.
Section 6-Indicates that the act shall take effect immediately.
JUSTIFICATION:
There are currently over 1,400 LHCSAs authorized to provide hourly nurs-
ing care, assistance with activities of daily living and other health
and social services to New York's low-income elderly and disabled popu-
lations. In the past five years alone, home health employers have added
72,600 -jobs in New York. This year, for the first time ever, the number
of people employed in the home health sector in New York City (167,000)
has surpassed the number employed by private hospitals in New York City
(166,300).
The FY 2018-19 Enacted Budget contained language in the Health and
Mental Hygiene bill (S.7507-C) that was agreed to by the Governor,
Senate Republicans and Assembly Democrats that put new restrictions and
additional hurdles on Licensed Home Care Services Agencies (LHCSAs). The
rationale behind these changes-from the perspective of the Department of
Health-was to move from a fragmented, decentralized model of care to a
more coordinated and centrally-planned one. In addition, it has been
reported that DOH believes that fewer providers will reduce waste, inef-
ficiency and the opportunity for fraud. The major downside of these
changes is that they will-by design-affect small, local operations forc-
ing them to merge and/or change their business model, and at worst,
potentially lose their ability to operate. Such changes seem to ignore
the basic current business model of local LHCSA operations who provide
targeted local care in the homes of individuals; in many ways this busi-
ness model cannot be scaled up and retain the quality of services
afforded by local groups who are trusted in the community.
The three major changes enacted as part of the FY 2018-19 Budget were:
*The DOH imposes a two-year moratorium on new LHCSA approvals (Expires
March 30th, 2020).
*The DOH will place a limit on the number of LHCSAs with which Managed
Long Term Care Plans (MLTCP) can contract (Scheduled to be implemented
on October 1st, 2018).
*The DOH will add a requirement that in the future-post the 2-year mora-
torium LHCSA applicants will need to demonstrate "public need," "stand-
ing in the community" and "financial resources" to receive approval.
This would go into effect on or about March 30th, 2020. All three chang-
es are of grave concern to the hardworking LHCSAs that are one of the
major backbones of our small business sector. The moratorium means that
any projects in the pipeline are effectively scuttled for at least two
years. The contracting limit, which is complex and determined by a
formula, could essentially mean that smaller LHCSAs are no longer able
to collaborate with Managed Long Term Care Plans. It has been reported
that DOH believes the following cutcomes are possible: consolidation of
the LHCSA marketplace, either through large providers formally acquiring
smaller providers, or the gradual disappearance of smaller providers
altogether as they struggle to maintain market share. The post-moratori-
um landscape in March 2020 "public. need," "standing in the community"
and "financial resources" for the purposes of becoming licensed to do
business_. This will add additional hurdles to small businesses that
already spend so much time on regulation and compliance;
in the long term, it could eventually mean that small operators no
longer have the opportunity to provide services to the community.
With hindsight and reflection upon what truly allows LHCSAs to deliver
quality care in the community, it has become very clear that letting
these businesses fail under a system intentionally stacked against them
is not a fair, sound, rational or viable option. Conclusively, this
legislation seeks to keep certain essential elements of the changes
enacted by Chapter 57 of 2018 but adds more realistic timetables for
implementation while preserving the due process rights of LHCSAs to be
heard by the DOH concerning changes that may very well affect their
ability to operate and serve our communities.
FISCAL IMPLICATIONS:
None of significance noted.
EFFECTIVE DATE:
This law will take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
5426
2023-2024 Regular Sessions
IN ASSEMBLY
March 10, 2023
___________
Introduced by M. of A. HYNDMAN -- read once and referred to the Commit-
tee on Health
AN ACT to amend the public health law, in relation to a moratorium on
new licensed home care service agency approvals; and to amend part B
of chapter 57 of the laws of 2018 amending the public health law and
other laws relating to limitations on licensed home care service agen-
cy contracts and registration of licensed home care services agencies,
in relation to the moratorium on the processing and approval of appli-
cations seeking licensure of a licensed home care services agency
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative intent. The legislature hereby finds and
2 declares that local small business are the very lifeblood and economic
3 building blocks of the empire state. These businesses are important to
4 every community throughout our state: they hire locally, they spend
5 resources locally, they pay state and local taxes and they offer essen-
6 tial services that improve the quality of life of individuals at the
7 local level. Without such local small businesses, our economy would not
8 be able to function in a manner that benefits all our residents and
9 reaches them in a very direct and personal way. A quintessential and
10 leading example of the type of local, small business that provides life-
11 changing services can be found in the form of licensed home care service
12 agencies (LHCSAs). LHCSAs are a vital and essential component of our
13 health care delivery system, interacting with patients on a daily basis,
14 attending to their needs and standing on the very frontline of quality
15 care. Furthermore, LHCSAs are very often small, local businesses started
16 by compassionate social entrepreneurs who saw a need in their community
17 and who have succeeded because of the very personal, trusting, compas-
18 sionate and nurturing relationship they have with the individuals under
19 their care. Additionally, the range of services provided by LHCSAs,
20 including language and cultural competency, is unique and valuable, to
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04659-01-3
A. 5426 2
1 them, to the employees they hire and to our overall community and health
2 care system. The need for home care services for our senior population
3 is rising exponentially and local, small business LHCSAs have rationally
4 grown to meet this demand and provide skillful care for our loved ones.
5 Moreover, LHCSAs often save the state money because they allow individ-
6 uals to remain at home, instead of moving to institutionalized care.
7 However, puzzlingly, the department of health constantly seems focused
8 on threatening LHCSAs ability to operate, as exemplified by a two year
9 moratorium enacted in 2008 and a series of potentially catastrophic
10 provisions enacted as part of the 2018-19 New York state budget, includ-
11 ing: another two year moratorium on new LHCSA approvals; the
12 construction of a limit on the number of LHCSAs with which managed long
13 term care plans (MLTCP) can contract; and authorization of a forward-
14 looking requirement that could be enacted in the future, post the two
15 year moratorium, that will mandate that LHCSA applicants need to demon-
16 strate "public need" and "financial feasibility" to receive approval. In
17 sum, these changes have simply gone too far in terms of overregulating
18 local small businesses that are trying to provide quality of life health
19 services to some of our most needy and vulnerable citizens. The new
20 changes threaten the very social and economic existence of the locally
21 centered LHCSAs that generations of New Yorkers have come to count on,
22 letting them into their homes in times of trial and perseverance. In
23 hindsight, the recently enacted provisions have proven to be overreach-
24 ing, unwise and onerous, and consequently must be modified.
25 § 2. Subparagraphs (i), (ii), (iii), (v) and (x) of paragraph (j) of
26 subdivision 7 of section 4403-f of the public health law, as added by
27 section 9-a of part B of chapter 57 of the laws of 2018, are amended to
28 read as follows:
29 (i) The commissioner may establish methodologies to limit the number
30 of licensed home care services agencies licensed pursuant to article
31 thirty-six of [the public health law] this chapter with which managed
32 long term care plans may enter into contracts, provided that such limi-
33 tations are consistent with the specifications set forth in this para-
34 graph. However, before implementing any such methodological limitations,
35 the department must hold a minimum of six public hearings including at
36 least one in each of the following regions: the city of New York, Long
37 Island, Westchester county, the capital region, central New York and
38 western New York to hear from interested parties that may be affected by
39 any proposed methodologies. The department shall widely publicize such
40 hearings once scheduled, and must send notice of such hearings to all
41 licensed home care services agencies at least two weeks in advance of
42 each hearing. The hearings must be officially transcribed and written
43 testimony and comments must be permitted both in person and via mail and
44 electronic means. The department shall formally take into account the
45 public hearing comments and written testimony before promulgating any
46 final methodologies.
47 (ii) Managed long term care plans operating in the city of New York
48 and/or the counties of Nassau, Suffolk, and Westchester may enter into
49 contracts with licensed home care services agencies in such region in a
50 maximum number calculated based upon the following methodology:
51 (A) As of October first, two thousand [eighteen] twenty-five, one
52 contract per seventy-five members enrolled in the plan within such
53 region; and
54 (B) As of October first, two thousand [nineteen] twenty-six, one
55 contract per one hundred members enrolled in the plan within such
56 region.
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1 (iii) Managed long term care plans operating in counties other than
2 those in the city of New York and the counties of Nassau, Suffolk, and
3 Westchester may enter into contracts with licensed home care services
4 agencies in such region in a maximum number calculated based upon the
5 following methodology:
6 (A) As of October first, two thousand [eighteen] twenty-five, one
7 contract per forty-five members enrolled in the plan within such region.
8 (B) As of October first, two thousand [nineteen] twenty-six, one
9 contract per sixty members enrolled in the plan within such region.
10 (v) When calculating the number of additional contracts that a managed
11 long term care plan may enter using the methodologies established pursu-
12 ant to this paragraph, any fractional result shall be rounded [down] up.
13 (x) This subparagraph applies where implementation of the limits on
14 contracts with licensed home care service agencies of this paragraph (i)
15 would otherwise require an enrollee's care to be transferred from the
16 enrollee's current licensed home care service agency to another licensed
17 care service agency, and (ii) the enrollee (or the enrollee's authorized
18 representative) wants the enrollee to continue to be cared for by one or
19 more employees of the current licensed home care service agency, and
20 that continuation would otherwise be provided. In such a case: the
21 enrollee's managed long term care plan may contract with the enrollee's
22 current licensed home care service agency for the purpose of continuing
23 the enrollee's care by such employee or employees, and the contract
24 shall not count towards the limits on contracts under this paragraph for
25 a period of [three months] one year.
26 § 3. Subdivisions 4 and 6 of section 3605 of the public health law, as
27 amended by section 9-b of part B of chapter 57 of the laws of 2018, are
28 amended to read as follows:
29 4. The public health and health planning council shall not approve an
30 application for licensure unless it is satisfied as to[: (a) the public
31 need for the existence of the licensed home health care service agency
32 at the time and place and under the circumstances proposed; (b)] the
33 character, competence and standing in the community of the applicant's
34 incorporators, directors, sponsors, stockholders or operators[; (c) the
35 financial resources of the proposed licensed home health care service
36 agency and its sources of financial revenues; and (d) such other matters
37 as it shall deem pertinent].
38 6. Neither public need, tax status nor profit-making status shall be
39 criteria for licensure.
40 § 4. Section 3605-b of the public health law, as added by section 9-d
41 of part B of chapter 57 of the laws of 2018, is amended to read as
42 follows:
43 § 3605-b. Registration of licensed home care services agencies. 1.
44 [(a)] Notwithstanding any provision of law to the contrary, no licensed
45 home care services agency (LHCSA) licensed pursuant to section thirty-
46 six hundred five of this article shall be operated, provide nursing
47 services, home health aide services, or personal care services, or
48 receive reimbursement from any source for the provision of such services
49 during any period of time on or after January first, two thousand [nine-
50 teen] twenty-six, unless it has registered with the commissioner in a
51 manner prescribed by the department.
52 [(b)] 2. A LHCSA that fails to submit a complete and accurate set of
53 all required registration materials by the deadline established by the
54 commissioner [shall] may be required to pay a fee of [five] one hundred
55 dollars for each full month [or part thereof] that the LHCSA is in
56 default. A LHCSA that failed to register in the prior year by the dead-
A. 5426 4
1 line of the current year shall not be permitted to register for the
2 upcoming registration period unless it submits any unpaid late fees.
3 [(c)] 3. The department shall post on its public website a list of all
4 LHCSAs, which shall indicate the current registration status of each
5 LHCSA.
6 [(d)] 4. The department shall institute proceedings to revoke the
7 license of any LHCSA that fails to register for [two] three consecutive
8 annual registration periods[, whether or not such periods are consec-
9 utive. The department shall have the discretion to pursue revocation of
10 the license of a LHCSA on grounds that it evidences a pattern of late
11 registration over the course of multiple years].
12 § 5. Section 9-e of part B of chapter 57 of the laws of 2018 amending
13 the public health law and other laws relating to limitations on licensed
14 home care service agency contracts and registration of licensed home
15 care services agencies is amended to read as follows:
16 § 9-e. Effective April 1, [2018] 2025, the commissioner of health
17 shall place a moratorium on the processing and approval of applications
18 seeking licensure of a licensed home care services agency pursuant to
19 section 3605 of the public health law that have not received establish-
20 ment approval or contingent establishment approval by the public health
21 and health planning council, except for: (a) an application seeking
22 licensure of a licensed home care services agency that is submitted with
23 an application for approval as an assisted living program authorized
24 pursuant to section 461-l of the social services law; (b) an application
25 seeking approval to transfer ownership for an existing licensed home
26 care services agency that has been licensed and operating for a minimum
27 of five years for the purpose of consolidating ownership of two or more
28 licensed home care services agencies; and (c) an application seeking
29 licensure of a home care services agency where the applicant demon-
30 strates to the satisfaction of the commissioner of health that
31 submission of the application to the public health and health planning
32 council for consideration would be appropriate on grounds that the
33 application addresses a serious concern such as a lack of access to home
34 care services in the geographic area or a lack of adequate and appropri-
35 ate care, language and cultural competence, or special needs services.
36 Such moratorium shall expire on March 31, [2020] 2027. In implementing
37 the provisions of this section, the commissioner shall, to the extent
38 practicable, review and, where appropriate, prioritize presentation to
39 the public health and health planning council of complete applications
40 under paragraph (b) of this section where the applicants demonstrate, to
41 the satisfaction of the commissioner, that the proposed change in owner-
42 ship is consistent with the goals of paragraph (j) of subdivision 7 of
43 section 4403-f of the public health law.
44 § 6. This act shall take effect immediately; provided, however, that
45 the amendments to section 4403-f of the public health law made by
46 section two of this act shall not affect the repeal of such section
47 pursuant to chapter 659 of the laws of 1997, as amended, and shall be
48 deemed repealed therewith.
