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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 Section 19a-493 of the general statutes is repealed and the 1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 5
inspection and investigation, the department finds that the applicant 6
and facilities meet the requirements established under section 19a-495, 7
provided a license shall be issued to or renewed for an institution, as 8
defined in section 19a-490, only if such institution is not otherwise 9
required to be licensed by the state. If an institution, as defined in 10
subsections (b), (d), (e) and (f) of section 19a-490, applies for license 11
renewal and has been certified as a provider of services by the United 12
States Department of Health and Human Services under Medicare or 13
Medicaid programs within the immediately preceding twelve-month 14
period, or if an institution, as defined in subsection (b) of section 19a-15 Bill No. 6731
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490, is currently certified, the commissioner or the commissioner's 16
designee may waive on renewal the inspection and investigation of 17
such facility required by this section and, in such event, any such 18
facility shall be deemed to have satisfied the requirements of section 19
19a-495 for the purposes of licensure. Such license shall be valid for 20
two years or a fraction thereof and shall terminate on March thirty-21
first, June thirtieth, September thirtieth or December thirty-first of the 22
appropriate year. A license issued pursuant to this chapter, unless 23
sooner suspended or revoked, shall be renewable biennially (1) after 24
an unscheduled inspection is conducted by the department, and (2) 25
upon the filing by the licensee, and approval by the department, of a 26
report upon such date and containing such information in such form 27
as the department prescribes and satisfactory evidence of continuing 28
compliance with requirements established under section 19a-495. In 29
the case of an institution, as defined in subsection (d) of section 19a-30
490, that is also certified as a provider under the Medicare program, 31
the license shall be issued for a period not to exceed three years, to run 32
concurrently with the certification period. In the case of an institution, 33
as defined in subsection (m) of section 19a-490, that is applying for 34
renewal, the license shall be issued pursuant to section 19a-491. Except 35
in the case of a multicare institution, each license shall be issued only 36
for the premises and persons named in the application. Such license 37
shall not be transferable or assignable. Licenses shall be posted in a 38
conspicuous place in the licensed premises. 39
(b) [(1)] A nursing home license may be renewed biennially after 40
[(A)] (1) an unscheduled inspection conducted by the department, [(B)] 41
(2) submission of the information required by section 19a-491a, and 42
[(C)] (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 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 51
legal entity, (iii) "facility" means any facility licensed by the 52
Department of Public Health pursuant to chapter 368v, (iv) 53
"institution" has the same meaning as provided in section 19a-490, and 54
(v) "organizational chart" means a graphical representation of an 55
organization, including, but not limited to, the relationships between 56
such organization's ownership interests, employees, departments and 57
the jobs within such 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 63
beneficial ownership remains unchanged and the owner provides such 64
information regarding the change to the department as may be 65
required by the commissioner to properly identify the current status of 66
ownership and beneficial ownership of the facility or institution, and 67
(ii) a public offering of the stock of any corporation that owns, 68
conducts, operates or maintains any facility or institution shall not be 69
considered a change in ownership or beneficial ownership of such 70
facility or institution if the licensee and the officers and directors of 71
such corporation remain unchanged, such public offering cannot result 72
in an individual or entity owning ten per cent or more of the stock of 73
such corporation, and the owner provides such information to the 74
department as may be required by the department in order to properly 75
identify the current status of ownership and beneficial ownership of 76
the facility or institution. 77
(C) For the purposes of this subsection, "serious risk to the life, 78
safety, or quality of care of patients or residents" includes, but is not 79
limited to, any deficiency in state licensure or federal certification 80
requirements, including the provisions of 42 CFR 488.400 et seq., 81 Bill No. 6731
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resulting in: 82
(i) An action by a state or federal agency to ban, curtail or 83
temporarily suspend admissions to a facility or to suspend or revoke a 84
facility's license; 85
(ii) A decertification, termination or exclusion from Medicaid or 86
Medicare participation, including denial of payment for new 87
admissions, imposed by the Department of Public Health or by the 88
Centers for Medicare and Medicaid Services, as a result of 89
noncompliance with Medicaid or Medicare conditions of participation; 90
(iii) A citation of any deficiency that constitutes a pattern or 91
widespread scope of harm or immediate jeopardy, or any deficiency 92
causing widespread actual harm, as described in 42 CFR 488; 93
(iv) A determination that the provider is a "poor performer" on the 94
basis of a finding of substandard quality of care or immediate 95
jeopardy, as described in 42 CFR 488, on the current survey and on a 96
survey during one of the two preceding years. For the purposes of this 97
subparagraph, "substandard quality of care" means the failure to meet 98
one or more requirements of 42 CFR 483.13, 42 CFR 483.15 or 42 CFR 99
483.25, that constitute either immediate jeopardy to resident health or 100
safety, a pattern of or widespread actual harm that is not immediate 101
jeopardy or a widespread potential for more than minimal harm, but 102
less than immediate jeopardy, with no actual harm; or 103
(v) A determination that the facility has failed to correct deficiencies 104
that have been cited, and that has resulted in a denial by the Centers 105
for Medicare and Medicaid Services of payment for new admissions or 106
a requirement by the department to curtail admission. 107
(2) Any change in the ownership or beneficial ownership of a facility 108
or institution [, as defined in section 19a-490,] owned by an individual 109
[, partnership or association or the change in ownership or beneficial 110
ownership of ten per cent or more of the stock of a corporation which] 111
or a business entity that owns, conducts, operates or maintains such 112 Bill No. 6731
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facility or institution, including a change in ownership or beneficial 113
ownership resulting in a transfer to a person related by blood or 114
marriage to an owner or a beneficial owner, shall be subject to prior 115
approval of the department. [after a scheduled inspection of such 116
facility or institution is conducted by the department, provided such 117
approval shall be conditioned upon a showing by such facility or 118
institution to the commissioner that it has complied with all 119
requirements of this chapter, the regulations relating to licensure and 120
all applicable requirements of the regulations of Connecticut state 121
agencies. Any such change in ownership or beneficial ownership 122
resulting in a transfer to a person related by blood or marriage to such 123
an owner or beneficial owner shall not be subject to prior approval of 124
the department unless: (A) Ownership or beneficial ownership of ten 125
per cent or more of the stock of a corporation, limited liability 126
company, partnership or association which owns, conducts, operates 127
or maintains more than one facility or institution is transferred; (B) 128
ownership or beneficial ownership is transferred in more than one 129
facility or institution; or (C) the facility or institution is the subject of a 130
pending complaint, investigation or licensure action. If the facility or 131
institution is not in compliance, the commissioner may require the new 132
owner to sign a consent order providing reasonable assurances that the 133
violations shall be corrected within a specified period of time. Notice 134
of any such proposed change of ownership shall be given to the 135
department at least one hundred twenty days prior to the effective 136
date of such proposed change. For the purposes of this subdivision, "a 137
person related by blood or marriage" means a parent, spouse, child, 138
brother, sister, aunt, uncle, niece or nephew. For the purposes of this 139
subdivision, a change in the legal form of the ownership entity, 140
including, but not limited to, changes from a corporation to a limited 141
liability company, a partnership to a limited liability partnership, a 142
sole proprietorship to a corporation and similar changes, shall not be 143
considered a change of ownership if the beneficial ownership remains 144
unchanged and the owner provides such information regarding the 145
change to the department as may be required by the department in 146
order to properly identify the current status of ownership and 147 Bill No. 6731
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beneficial ownership of the facility or institution. For the purposes of 148
this subdivision, a public offering of the stock of any corporation that 149
owns, conducts, operates or maintains any such facility or institution 150
shall not be considered a change in ownership or beneficial ownership 151
of such facility or institution if the licensee and the officers and 152
directors of such corporation remain unchanged, such public offering 153
cannot result in an individual or entity owning ten per cent or more of 154
the stock of such corporation, and the owner provides such 155
information to the department as may be required by the department 156
in order to properly identify the current status of ownership and 157
beneficial ownership of the facility or institution.] 158
(3) Not later than one hundred twenty days before the proposed 159
date of a change in ownership or beneficial ownership of a facility or 160
institution, the proposed new owner, or in the case of a change in 161
beneficial ownership, the current owner, of such facility or institution 162
shall submit an application for approval to the department. Such 163
application shall be in a form and manner prescribed by the 164
commissioner and shall include, but need not be limited to, the 165
following: 166
(A) A cover letter identifying the facility or institution subject to 167
such change by name, address, county and number and type of beds 168
licensed by the department; 169
(B) A description of the proposed transaction resulting in such 170
change, including the name of each current owner of the facility or 171
institution; 172
(C) The name of each proposed new owner or beneficial owner; 173
(D) The name of each owner of any nonpublicly traded parent 174
corporation of each proposed new owner and beneficial owner; 175
(E) If applicable, (i) the proposed new owner's organizational chart, 176
(ii) the proposed new owner's parent business entity's organizational 177
chart, (iii) the organizational chart of each wholly-owned subsidiary of 178 Bill No. 6731
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such proposed new owner, and (iv) the current owner's organizational 179
chart showing the changes in beneficial ownership; 180
(F) A copy of the agreement of sale or other transfer of ownership 181
interests and, if applicable, a copy of any lease or management 182
agreements that will be in effect after the transaction; 183
(G) The name and address of any licensed health care facility 184
owned, operated or managed by each proposed new owner and 185
beneficial owner in the United States or any territory of the United 186
States during the five years preceding the date on which such 187
application is submitted, and information relating to any such facility, 188
including: 189
(i) Disclosure of any direct or indirect interests, including such 190
interests in intermediate entities and parent, management and 191
property companies and other related entities arising from such 192
ownership, operation or management; 193
(ii) Disclosure of whether each such facility or institution is the 194
subject of a pending complaint, investigation or licensure action; 195
(iii) Disclosure of whether each such facility or institution has been 196
subject to: 197
(I) Three or more civil penalties imposed through final order of the 198
commissioner in accordance with the provisions of sections 19a-524 to 199
19a-528, inclusive, or civil penalties imposed pursuant to the laws or 200
regulations of another state during the two-year period preceding the 201
date on which such application is submitted; 202
(II) Sanctions, other than civil penalties less than or equal to twenty 203
thousand dollars, imposed in any state through final adjudication 204
under the Medicare or Medicaid program pursuant to Title XVIII or 205
XIX of the federal Social Security Act, 42 USC 301, as amended from 206
time to time; 207 Bill No. 6731
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(III) Termination or nonrenewal of a Medicare or Medicaid provider 208
agreement; 209
(IV) Any state licensing or federal certification deficiency during the 210
five-year period prior to the submission of the application that 211
presented a serious risk to the life, safety or quality of care of the 212
facility's patients or residents; and 213
(V) Any violation of any state licensing or federal certification 214
standard in connection with an inappropriate discharge or denial of 215
admission; and 216
(H) Disclosure of whether each proposed new owner has ever been 217
convicted or pleaded guilty to a charge of fraud, patient or resident 218
abuse or neglect or a crime of violence or moral turpitude. 219
(4) After receiving an application for change in ownership, the 220
commissioner shall schedule an inspection of such facility or 221
institution to determine if the facility or institution has complied with 222
the requirements of this chapter and the regulations of Connecticut 223
state agencies relating to licensure of such facility or institution. 224
(5) When evaluating an application for a change in ownership, the 225
commissioner shall consider whether each proposed new owner and 226
beneficial owner demonstrates character and competence, quality of 227
care and whether an acceptable history of past and current compliance 228
with state licensure requirements, applicable federal requirements and 229
state regulatory requirements exists for each licensed health care 230
facility owned, operated or managed by each proposed new owner 231
and beneficial owner in the United States or any territory of the United 232
States during the five years preceding the date on which such 233
application is submitted. The commissioner may deny an application 234
for change in ownership if such qualities are not demonstrated, as 235
evidenced by: 236
(A) Any such licensed health care facility being subject to any 237
adverse action described in subparagraph (G)(iii) of subdivision (3) of 238 Bill No. 6731
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subsection (c) of this section; 239
(B) Any such licensed health care facility exhibiting continuing 240
violations or a pattern of violations of state licensure standards or 241
federal certification standards; or 242
(C) An applicant's criminal conviction of, or guilty plea to, any of 243
the crimes described in subparagraph (H) of subdivision (3) of 244
subsection (c) of this section. 245
(6) Notwithstanding the provisions of subdivision (5) of this 246
subsection, the commissioner may deny an application if the 247
commissioner determines that there is a pending investigation of 248
actions of the applicant at any facility operated or managed by the 249
applicant that, if substantiated, would constitute a threat to the life, 250
safety or quality of care of the patients or residents until such time as 251
there is a final determination of the allegations underlying the 252
investigation. 253
(7) If the commissioner denies an application for change in 254
ownership, a person related by blood or marriage to the applicant may 255
not apply to acquire ownership interest in the facility or institution. 256
[(c)] (d) (1) A multicare institution may, under the terms of its 257
existing license, provide behavioral health services or substance use 258
disorder treatment services on the premises of more than one facility, 259
at a satellite unit or at another location outside of its facilities or 260
satellite units that is acceptable to the patient receiving services and is 261
consistent with the patient's assessment and treatment plan. Such 262
behavioral health services or substance use disorder treatment services 263
may include methadone delivery and related substance use treatment 264
services to persons in a nursing home facility pursuant to the 265
provisions of section 19a-495c or in a mobile narcotic treatment 266
program, as defined in 21 CFR 1300. 267
(2) Any multicare institution that intends to offer services at a 268
satellite unit or other location outside of its facilities or satellite units 269 Bill No. 6731
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shall submit an application for approval to offer services at such 270
location to the Department of Public Health. Such application shall be 271
submitted on a form and in the manner prescribed by the 272
Commissioner of Public Health. Not later than forty-five days after 273
receipt of such application, the commissioner shall notify the multicare 274
institution of the approval or denial of such application. If the satellite 275
unit or other location is approved, that satellite unit or location shall be 276
deemed to be licensed in accordance with this section and shall comply 277
with the applicable requirements of this chapter and regulations 278
adopted under this chapter. 279
(3) A multicare institution that is a hospital providing outpatient 280
behavioral health services or other health care services shall provide 281
the Department of Public Health with a list of satellite units or 282
locations when completing the initial or renewal licensure application. 283
(4) The Commissioner of Public Health may adopt regulations, in 284
accordance with the provisions of chapter 54, to carry out the 285
provisions of this subsection. The Commissioner of Public Health may 286
implement policies and procedures necessary to administer the 287
provisions of this subsection while in the process of adopting such 288
policies and procedures as regulation, provided the commissioner 289
prints notice of intent to adopt regulations in the Connecticut Law 290
Journal not later than twenty days after the date of implementation. 291
Policies and procedures implemented pursuant to this section shall be 292
valid until the time final regulations are adopted. 293
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2023 19a-493
PH Joint Favorable