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General Assembly Raised Bill No. 6731
January Session, 2023
LCO No. 4302
Referred to Committee on PUBLIC HEALTH
Introduced by:
(PH)
AN ACT CONCERNING THE DEPARTMENT OF PUBLIC HEALTH'S
RECOMMENDATIONS REGARDING CHANGE IN OWNERSHIP OF
HEALTH CARE FACILITIES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 19a-493 of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective July 1, 2023): 2
(a) Upon receipt of an application for an initial license, the 3
Department of Public Health, subject to the provisions of section 19a-4
491a, shall issue such license if, upon conducting a scheduled inspection 5
and investigation, the department finds that the applicant and facilities 6
meet the requirements established under section 19a-495, provided a 7
license shall be issued to or renewed for an institution, as defined in 8
section 19a-490, only if such institution is not otherwise required to be 9
licensed by the state. If an institution, as defined in subsections (b), (d), 10
(e) and (f) of section 19a-490, applies for license renewal and has been 11
certified as a provider of services by the United States Department of 12
Health and Human Services under Medicare or Medicaid programs 13
within the immediately preceding twelve-month period, or if an 14 Raised Bill No. 6731
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institution, as defined in subsection (b) of section 19a-490, is currently 15
certified, the commissioner or the commissioner's designee may waive 16
on renewal the inspection and investigation of such facility required by 17
this section and, in such event, any such facility shall be deemed to have 18
satisfied the requirements of section 19a-495 for the purposes of 19
licensure. Such license shall be valid for two years or a fraction thereof 20
and shall terminate on March thirty-first, June thirtieth, September 21
thirtieth or December thirty-first of the appropriate year. A license 22
issued pursuant to this chapter, unless sooner suspended or revoked, 23
shall be renewable biennially (1) after an unscheduled inspection is 24
conducted by the department, and (2) upon the filing by the licensee, 25
and approval by the department, of a report upon such date and 26
containing such information in such form as the department prescribes 27
and satisfactory evidence of continuing compliance with requirements 28
established under section 19a-495. In the case of an institution, as 29
defined in subsection (d) of section 19a-490, that is also certified as a 30
provider under the Medicare program, the license shall be issued for a 31
period not to exceed three years, to run concurrently with the 32
certification period. In the case of an institution, as defined in subsection 33
(m) of section 19a-490, that is applying for renewal, the license shall be 34
issued pursuant to section 19a-491. Except in the case of a multicare 35
institution, each license shall be issued only for the premises and 36
persons named in the application. Such license shall not be transferable 37
or assignable. Licenses shall be posted in a conspicuous place in the 38
licensed premises. 39
(b) [(1)] A nursing home license may be renewed biennially after [(A)] 40
(1) an unscheduled inspection conducted by the department, [(B)] (2) 41
submission of the information required by section 19a-491a, and [(C)] 42
(3) submission of evidence satisfactory to the department that the 43
nursing home is in compliance with the provisions of this chapter, the 44
regulations of Connecticut state agencies and licensing regulations. 45
[(2)] (c) (1) (A) For the purposes of this subsection, (i) "a person 46
related by blood or marriage" means a parent, spouse, child, brother, 47
sister, aunt, uncle, niece or nephew, (ii) "business entity" means a 48 Raised Bill No. 6731
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corporation, association, trust, estate, partnership, limited partnership, 49
limited liability partnership, limited liability company, sole 50
proprietorship, joint stock company, nonstock corporation or other legal 51
entity, (iii) "facility" means any facility licensed by the Department of 52
Public Health pursuant to chapter 368v, (iv) "institution" has the same 53
meaning as provided in section 19a-490, and (v) "organizational chart" 54
means a graphical representation of an organization, including, but not 55
limited to, the relationships between such organization's ownership 56
interests, employees, departments and the jobs within such 57
organization. 58
(B) For the purposes of this subsection, (i) a change in the legal form 59
of the ownership entity, including, but not limited to, changes from a 60
corporation to a limited liability company, a partnership to a limited 61
liability partnership, a sole proprietorship to a corporation and similar 62
changes, shall not be considered a change in ownership if the beneficial 63
ownership remains unchanged and the owner provides such 64
information regarding the change to the department as may be required 65
by the commissioner to properly identify the current status of 66
ownership and beneficial ownership of the facility or institution, and (ii) 67
a public offering of the stock of any corporation that owns, conducts, 68
operates or maintains any facility or institution shall not be considered 69
a change in ownership or beneficial ownership of such facility or 70
institution if the licensee and the officers and directors of such 71
corporation remain unchanged, such public offering cannot result in an 72
individual or entity owning ten per cent or more of the stock of such 73
corporation, and the owner provides such information to th e 74
department as may be required by the department in order to properly 75
identify the current status of ownership and beneficial ownership of the 76
facility or institution. 77
(C) For the purposes of this subsection, "serious risk to the life, safety, 78
or quality of care of patients or residents" includes, but is not limited to, 79
any deficiency in state licensure or federal certification requirements, 80
including the provisions of 42 CFR 488.400 et seq., resulting in: 81 Raised Bill No. 6731
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(i) An action by a state or federal agency to ban, curtail or temporarily 82
suspend admissions to a facility or to suspend or revoke a facility's 83
license; 84
(ii) A decertification, termination or exclusion from Medicaid or 85
Medicare participation, including denial of payment for new 86
admissions, imposed by the Department of Public Health or by the 87
Centers for Medicare and Medicaid Services, as a result of 88
noncompliance with Medicaid or Medicare conditions of participation; 89
(iii) A citation of any deficiency that constitutes a pattern or 90
widespread scope of harm or immediate jeopardy, or any deficiency 91
causing widespread actual harm, as described in 42 CFR 488; 92
(iv) A determination that the provider is a "poor performer" on the 93
basis of a finding of substandard quality of care or immediate jeopardy, 94
as described in 42 CFR 488, on the current survey and on a survey 95
during one of the two preceding years. For the purposes of this 96
subparagraph, "substandard quality of care" means the failure to meet 97
one or more requirements of 42 CFR 483.13, 42 CFR 483.15 or 42 CFR 98
483.25, that constitute either immediate jeopardy to resident health or 99
safety, a pattern of or widespread actual harm that is not immediate 100
jeopardy or a widespread potential for more than minimal harm, but 101
less than immediate jeopardy, with no actual harm; or 102
(v) A determination that the facility has failed to correct deficiencies 103
that have been cited, and that has resulted in a denial by the Centers for 104
Medicare and Medicaid Services of payment for new admissions or a 105
requirement by the department to curtail admission. 106
(2) Any change in the ownership or beneficial ownership of a facility 107
or institution [, as defined in section 19a-490,] owned by an individual [, 108
partnership or association or the change in ownership or beneficial 109
ownership of ten per cent or more of the stock of a corporation which] 110
or a business entity that owns, conducts, operates or maintains such 111
facility or institution, including a change in ownership or beneficial 112
ownership resulting in a transfer to a person related by blood or 113 Raised Bill No. 6731
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marriage to an owner or a beneficial owner, shall be subject to prior 114
approval of the department. [after a scheduled inspection of such facility 115
or institution is conducted by the department, provided such approval 116
shall be conditioned upon a showing by such facility or institution to the 117
commissioner that it has complied with all requirements of this chapter, 118
the regulations relating to licensure and all applicable requirements of 119
the regulations of Connecticut state agencies. Any such change in 120
ownership or beneficial ownership resulting in a transfer to a person 121
related by blood or marriage to such an owner or beneficial owner shall 122
not be subject to prior approval of the department unless: (A) 123
Ownership or beneficial ownership of ten per cent or more of the stock 124
of a corporation, limited liability company, partnership or association 125
which owns, conducts, operates or maintains more than one facility or 126
institution is transferred; (B) ownership or beneficial ownership is 127
transferred in more than one facility or institution; or (C) the facility or 128
institution is the subject of a pending complaint, investigation or 129
licensure action. If the facility or institution is not in compliance, the 130
commissioner may require the new owner to sign a consent order 131
providing reasonable assurances that the violations shall be corrected 132
within a specified period of time. Notice of any such proposed change 133
of ownership shall be given to the department at least one hundred 134
twenty days prior to the effective date of such proposed change. For the 135
purposes of this subdivision, "a person related by blood or marriage" 136
means a parent, spouse, child, brother, sister, aunt, uncle, niece or 137
nephew. For the purposes of this subdivision, a change in the legal form 138
of the ownership entity, including, but not limited to, changes from a 139
corporation to a limited liability company, a partnership to a limited 140
liability partnership, a sole proprietorship to a corporation and similar 141
changes, shall not be considered a change of ownership if the beneficial 142
ownership remains unchanged and the owner provides such 143
information regarding the change to the department as may be required 144
by the department in order to properly identify the current status of 145
ownership and beneficial ownership of the facility or institution. For the 146
purposes of this subdivision, a public offering of the stock of any 147
corporation that owns, conducts, operates or maintains any such facility 148 Raised Bill No. 6731
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or institution shall not be considered a change in ownership or beneficial 149
ownership of such facility or institution if the licensee and the officers 150
and directors of such corporation remain unchanged, such public 151
offering cannot result in an individual or entity owning ten per cent or 152
more of the stock of such corporation, and the owner provides such 153
information to the department as may be required by the department in 154
order to properly identify the current status of ownership and beneficial 155
ownership of the facility or institution.] 156
(3) Not later than one hundred twenty days before the proposed date 157
of a change in ownership or beneficial ownership of a facility or 158
institution, the proposed new owner, or in the case of a change in 159
beneficial ownership, the current owner, of such facility or institution 160
shall submit an application for approval to the department. Such 161
application shall be in a form and manner prescribed by the 162
commissioner and shall include, but need not be limited to, the 163
following: 164
(A) A cover letter identifying the facility or institution subject to such 165
change by name, address, county and number and type of beds licensed 166
by the department; 167
(B) A description of the proposed transaction resulting in such 168
change, including the name of each current owner of the facility or 169
institution; 170
(C) The name of each proposed new owner or beneficial owner; 171
(D) The name of each owner of any nonpublicly traded parent 172
corporation of each proposed new owner and beneficial owner; 173
(E) If applicable, (i) the proposed new owner's organizational chart, 174
(ii) the proposed new owner's parent business entity's organizational 175
chart, (iii) the organizational chart of each wholly-owned subsidiary of 176
such proposed new owner, and (iv) the current owner's organizational 177
chart showing the changes in beneficial ownership; 178 Raised Bill No. 6731
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(F) A copy of the agreement of sale or other transfer of ownership 179
interests and, if applicable, a copy of any lease or management 180
agreements that will be in effect after the transaction; 181
(G) The name and address of any licensed health care facility owned, 182
operated or managed by each proposed new owner and beneficial 183
owner in the United States or any territory of the United States during 184
the five years preceding the date on which such application is 185
submitted, and information relating to any such facility, including: 186
(i) Disclosure of any direct or indirect interests, including such 187
interests in intermediate entities and parent, management and property 188
companies and other related entities arising from such ownership, 189
operation or management; 190
(ii) Disclosure of whether each such facility or institution is the 191
subject of a pending complaint, investigation or licensure action; 192
(iii) Disclosure of whether each such facility or institution has been 193
subject to: 194
(I) Three or more civil penalties imposed through final order of the 195
commissioner in accordance with the provisions of sections 19a-524 to 196
19a-528, inclusive, or civil penalties imposed pursuant to the laws or 197
regulations of another state during the two-year period preceding the 198
date on which such application is submitted; 199
(II) Sanctions, other than civil penalties less than or equal to twenty 200
thousand dollars, imposed in any state through final adjudication under 201
the Medicare or Medicaid program pursuant to Title XVIII or XIX of the 202
federal Social Security Act, 42 USC 301, as amended from time to time; 203
(III) Termination or nonrenewal of a Medicare or Medicaid provider 204
agreement; 205
(IV) Any state licensing or federal certification deficiency during the 206
five-year period prior to the submission of the application that 207
presented a serious risk to the life, safety or quality of care of the 208 Raised Bill No. 6731
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facility's patients or residents; and 209
(V) Any violation of any state licensing or federal certification 210
standard in connection with an inappropriate discharge or denial of 211
admission; and 212
(H) Disclosure of whether each proposed new owner has ever been 213
convicted or pleaded guilty to a charge of fraud, patient or resident 214
abuse or neglect or a crime of violence or moral turpitude. 215
(4) After receiving an application for change in ownership, the 216
commissioner shall schedule an inspection of such facility or institution 217
to determine if the facility or institution has complied with the 218
requirements of this chapter and the regulations of Connecticut state 219
agencies relating to licensure of such facility or institution. 220
(5) When evaluating an application for a change in ownership, the 221
commissioner shall consider whether each proposed new owner and 222
beneficial owner demonstrates character and competence, quality of 223
care and whether an acceptable history of past and current compliance 224
with state licensure requirements, applicable federal requirements and 225
state regulatory requirements exists for each licensed health care facility 226
owned, operated or managed by each proposed new owner and 227
beneficial owner in the United States or any territory of the United States 228
during the five years preceding the date on which such application is 229
submitted. The commissioner may deny an application for change in 230
ownership if such qualities are not demonstrated, as evidenced by: 231
(A) Any such licensed health care facility being subject to any adverse 232
action described in subparagraph (G)(iii) of subdivision (3) of subsection 233
(c) of this section; 234
(B) Any such licensed health care facility exhibiting continuing 235
violations or a pattern of violations of state licensure standards or 236
federal certification standards; or 237
(C) An applicant's criminal conviction of, or guilty plea to, any of the 238 Raised Bill No. 6731
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crimes described in subparagraph (H) of subdivision (3) of subsection 239
(c) of this section. 240
(6) Notwithstanding the provisions of subdivision (5) of this 241
subsection, the commissioner may deny an application if the 242
commissioner determines that there is a pending investigation of actions 243
of the applicant at any facility operated or managed by the applicant 244
that, if substantiated, would constitute a threat to the life, safety or 245
quality of care of the patients or residents until such time as there is a 246
final determination of the allegations underlying the investigation. 247
(7) If the commissioner denies an application for change in 248
ownership, a person related by blood or marriage to the applicant may 249
not apply to acquire ownership interest in the facility or institution. 250
[(c)] (d) (1) A multicare institution may, under the terms of its existing 251
license, provide behavioral health services or substance use disorder 252
treatment services on the premises of more than one facility, at a satellite 253
unit or at another location outside of its facilities or satellite units that is 254
acceptable to the patient receiving services and is consistent with the 255
patient's assessment and treatment plan. Such behavioral health 256
services or substance use disorder treatment services may include 257
methadone delivery and related substance use treatment services to 258
persons in a nursing home facility pursuant to the provisions of section 259
19a-495c or in a mobile narcotic treatment program, as defined in 21 CFR 260
1300. 261
(2) Any multicare institution that intends to offer services at a satellite 262
unit or other location outside of its facilities or satellite units shall submit 263
an application for approval to offer services at such location to the 264
Department of Public Health. Such application shall be submitted on a 265
form and in the manner prescribed by the Commissioner of Public 266
Health. Not later than forty-five days after receipt of such application, 267
the commissioner shall notify the multicare institution of the approval 268
or denial of such application. If the satellite unit or other location is 269
approved, that satellite unit or location shall be deemed to be licensed 270 Raised Bill No. 6731
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in accordance with this section and shall comply with the applicable 271
requirements of this chapter and regulations adopted under this 272
chapter. 273
(3) A multicare institution that is a hospital providing outpatient 274
behavioral health services or other health care services shall provide the 275
Department of Public Health with a list of satellite units or locations 276
when completing the initial or renewal licensure application. 277
(4) The Commissioner of Public Health may adopt regulations, in 278
accordance with the provisions of chapter 54, to carry out the provisions 279
of this subsection. The Commissioner of Public Health may implement 280
policies and procedures necessary to administer the provisions of this 281
subsection while in the process of adopting such policies and 282
procedures as regulation, provided the commissioner prints notice of 283
intent to adopt regulations in the Connecticut Law Journal not later than 284
twenty days after the date of implementation. Policies and procedures 285
implemented pursuant to this section shall be valid until the time final 286
regulations are adopted. 287
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2023 19a-493
Statement of Purpose:
To (1) expand the circumstances in which a change in ownership of a
health care facility or institution requires approval by the Department
of Public Health; and (2) establish an application process for the
approval of changes in ownership of health care facilities and
institutions.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]