House Bill No. 6731
Public Act No. 23-122
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 Section 19a-493 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2023):
(a) Upon receipt of an application for an initial license, the
Department of Public Health, subject to the provisions of section 19a-
491a, shall issue such license if, upon conducting a scheduled inspection
and investigation, the department finds that the applicant and facilities
meet the requirements established under section 19a-495, provided a
license shall be issued to or renewed for an institution, as defined in
section 19a-490, only if such institution is not otherwise required to be
licensed by the state. If an institution, as defined in subsections (b), (d),
(e) and (f) of section 19a-490, applies for license renewal and has been
certified as a provider of services by the United States Department of
Health and Human Services under Medicare or Medicaid programs
within the immediately preceding twelve-month period, or if an
institution, as defined in subsection (b) of section 19a-490, is currently
certified, the commissioner or the commissioner's designee may waive
on renewal the inspection and investigation of such facility required by House Bill No. 6731
Public Act No. 23-122 2 of 14
this section and, in such event, any such facility shall be deemed to have
satisfied the requirements of section 19a-495 for the purposes of
licensure. Such license shall be valid for two years or a fraction thereof
and shall terminate on March thirty-first, June thirtieth, September
thirtieth or December thirty-first of the appropriate year. A license
issued pursuant to this chapter, unless sooner suspended or revoked,
shall be renewable biennially (1) after an unscheduled inspection is
conducted by the department, and (2) upon the filing by the licensee,
and approval by the department, of a report upon such date and
containing such information in such form as the department prescribes
and satisfactory evidence of continuing compliance with requirements
established under section 19a-495. In the case of an institution, as
defined in subsection (d) of section 19a-490, that is also certified as a
provider under the Medicare program, the license shall be issued for a
period not to exceed three years, to run concurrently with the
certification period. In the case of an institution, as defined in subsection
(m) of section 19a-490, that is applying for renewal, the license shall be
issued pursuant to section 19a-491. Except in the case of a multicare
institution, each license shall be issued only for the premises and
persons named in the application. Such license shall not be transferable
or assignable. Licenses shall be posted in a conspicuous place in the
licensed premises.
(b) [(1)] A nursing home license may be renewed biennially after [(A)]
(1) an unscheduled inspection conducted by the department, [(B)] (2)
submission of the information required by section 19a-491a, and [(C)]
(3) submission of evidence satisfactory to the department that the
nursing home is in compliance with the provisions of this chapter, the
regulations of Connecticut state agencies and licensing regulations.
(c) (1) (A) For the purposes of this subsection, (i) "a person related by
blood or marriage" means a parent, spouse, child, brother, sister, aunt,
uncle, niece or nephew, (ii) "business entity" means a corporation, House Bill No. 6731
Public Act No. 23-122 3 of 14
association, trust, estate, partnership, limited partnership, limited
liability partnership, limited liability company, sole proprietorship, joint
stock company, nonstock corporation or other legal entity, (iii)
"institution" has the same meaning as provided in section 19a-490, and
(iv) "organizational chart" means a graphical representation of an
organization, including, but not limited to, the relationships between
such organization's ownership interests.
(B) For the purposes of this subsection, (i) a change in the legal form
of the licensee, including, but not limited to, changes from a corporation
to a limited liability company, a partnership to a limited liability
partnership, a sole proprietorship to a corporation and similar changes,
shall not be considered a change in ownership if the beneficial
ownership remains unchanged and the owner provides such
information regarding the change to the department as may be required
by the commissioner to properly identify the current status of
ownership and beneficial ownership of the facility or institution, (ii) a
public offering of the stock of any corporation that owns, conducts,
operates or maintains any facility or institution shall not be considered
a change in ownership or beneficial ownership of such facility or
institution if the licensee and the officers and directors of such
corporation remain unchanged, such public offering cannot result in an
individual or entity owning ten per cent or more of the stock of such
corporation, and the owner provides such information to the
department as may be required by the department in order to properly
identify the current status of ownership and beneficial ownership of the
facility or institution, and (iii) a change of ownership of, or to, a business
entity recognized as a nonprofit organization under Section 501(c)(3) of
the Internal Revenue Code of 1986, or any subsequent corresponding
internal revenue code of the United States, as amended from time to
time, that is licensed as a hospital pursuant to this chapter resulting in
the transfer of ownership which is exempt from review required under
subsection (a) of section 19a-486a shall not be considered a change in House Bill No. 6731
Public Act No. 23-122 4 of 14
ownership provided the owner provides such information regarding
the change to the department as may be required by the commissioner
to properly identify the current status of ownership.
(C) For the purposes of this subsection, "serious risk to the life, safety
or quality of care of patients or residents" includes, but is not limited to,
any deficiency in state licensure or federal certification requirements,
including the provisions of 42 CFR 488.400 et seq., resulting in:
(i) An action by a state or federal agency to ban, curtail or temporarily
suspend admissions to a facility or to suspend or revoke a facility's
license;
(ii) A decertification, termination or exclusion from Medicaid or
Medicare participation, including denial of payment for new
admissions resulting solely due to the provider's failure to correct
deficiencies or noncompliance with regulatory requirements, imposed
by the Department of Public Health or by the Centers for Medicare and
Medicaid Services, as a result of noncompliance with Medicaid or
Medicare conditions of participation;
(iii) A citation of any deficiency that constitutes a pattern or
widespread scope of actual harm or immediate jeopardy, or any
deficiency causing widespread actual harm, as described in 42 CFR 488;
(iv) A determination that the provider is a "poor performer" as
defined by the Centers for Medicare and Medicaid Services on the basis
of a finding of substandard quality of care or immediate jeopardy, as
described in 42 CFR 488, on the current survey and on a survey during
one of the two preceding years. For the purposes of this subparagraph,
"substandard quality of care" means the failure to meet one or more
requirements of 42 CFR 483.13, 42 CFR 483.15 or 42 CFR 483.25, that
constitute either immediate jeopardy to resident health or safety, a
pattern of or widespread actual harm that is not immediate jeopardy or House Bill No. 6731
Public Act No. 23-122 5 of 14
a widespread potential for more than minimal harm, but less than
immediate jeopardy, with no actual harm; or
(v) A determination that the facility has failed to correct, on a second
revisit, deficiencies that have been cited during a prior survey, and that
has resulted in a denial by the Centers for Medicare and Medicaid
Services of payment for new admissions or a requirement by the
department to curtail admission.
(2) Any change in the ownership or beneficial ownership of a facility
or institution [, as defined in section 19a-490,] owned by an individual [,
partnership or association or the change in ownership or beneficial
ownership of ten per cent or more of the stock of a corporation which]
or a business entity that owns, conducts, operates or maintains such
facility or institution, including a change in ownership or beneficial
ownership resulting in a transfer to a person related by blood or
marriage to an owner or a beneficial owner, shall be subject to prior
approval of the department, [after a scheduled inspection of such facility
or institution is conducted by the department,] provided such approval
shall be conditioned upon a showing by such facility or institution to the
commissioner that it has complied with all requirements of this chapter,
the regulations relating to licensure and all applicable requirements of
the regulations of Connecticut state agencies [. Any such change in
ownership or beneficial ownership resulting in a transfer to a person
related by blood or marriage to such an owner or beneficial owner shall
not be subject to prior approval of the department unless: (A)
Ownership or beneficial ownership of ten per cent or more of the stock
of a corporation, limited liability company, partnership or association
which owns, conducts, operates or maintains more than one facility or
institution is transferred; (B) ownership or beneficial ownership is
transferred in more than one facility or institution; or (C) the facility or
institution is the subject of a pending complaint, investigation or
licensure action. If the facility or institution is not in compliance, the House Bill No. 6731
Public Act No. 23-122 6 of 14
commissioner may require the new owner to sign a consent order
providing reasonable assurances that the violations shall be corrected
within a specified period of time. Notice of any such proposed change
of ownership shall be given to the department at least one hundred
twenty days prior to the effective date of such proposed change. For the
purposes of this subdivision, "a person related by blood or marriage"
means a parent, spouse, child, brother, sister, aunt, uncle, niece or
nephew. For the purposes of this subdivision, a change in the legal form
of the ownership entity, including, but not limited to, changes from a
corporation to a limited liability company, a partnership to a limited
liability partnership, a sole proprietorship to a corporation and similar
changes, shall not be considered a change of ownership if the beneficial
ownership remains unchanged and the owner provid es such
information regarding the change to the department as may be required
by the department in order to properly identify the current status of
ownership and beneficial ownership of the facility or institution. For the
purposes of this subdivision, a public offering of the stock of any
corporation that owns, conducts, operates or maintains any such facility
or institution shall not be considered a change in ownership or beneficial
ownership of such facility or institution if the licensee and the officers
and directors of such corporation remain unchanged, such public
offering cannot result in an individual or entity owning ten per cent or
more of the stock of such corporation, and the owner provides such
information to the department as may be required by the department in
order to properly identify the current status of ownership and beneficial
ownership of the facility or institution.] and the change of ownership or
beneficial ownership meets the requirements of subdivision (5) of
subsection (c) of this section.
(3) Not later than one hundred twenty days before the proposed date
of a change in ownership or beneficial ownership of a facility or
institution, the proposed new owner, or in the case of a change in
beneficial ownership, the current owner, of such facility or institution House Bill No. 6731
Public Act No. 23-122 7 of 14
shall submit an application for approval to the department. Such
application shall be in a form and manner prescribed by the
commissioner and shall include, but need not be limited to, the
following:
(A) A cover letter identifying the facility or institution subject to such
change by name, address, county and number and type of beds licensed
by the department;
(B) A description of the proposed transaction resulting in such
change, including the name of each current owner of the facility or
institution;
(C) The name of each proposed new owner or beneficial owner;
(D) The name of each owner of any nonpublicly traded parent
corporation of each proposed new owner and beneficial owner;
(E) If applicable, (i) the proposed new owner's organizational chart,
(ii) the proposed new owner's parent business entity's organizational
chart, (iii) the organizational chart of each wholly-owned subsidiary of
such proposed new owner, and (iv) the current owner's organizational
chart showing the changes in beneficial ownership;
(F) A copy of the agreement of sale or other transfer of ownership
interests and, if applicable, a copy of any lease or management
agreements that will be in effect after the transaction;
(G) The name and address of any licensed health care facility owned,
operated or managed by each proposed new owner and beneficial
owner in the United States or any territory of the United States during
the five years preceding the date on which such application is
submitted, and information relating to any such facility, including:
(i) Disclosure of any direct or indirect interests, including such House Bill No. 6731
Public Act No. 23-122 8 of 14
interests in intermediate entities and parent, management and property
companies and other related entities arising from such ownership,
operation or management;
(ii) Disclosure of whether each such facility or institution is the
subject of a pending complaint, investigation or licensure action by a
governmental authority;
(iii) Disclosure of whether each such facility or institution has been
subject to:
(I) Three or more civil penalties imposed through final order of the
commissioner in accordance with the provisions of sections 19a-524 to
19a-528, inclusive, or civil penalties imposed pursuant to the laws or
regulations of another state during the two-year period preceding the
date on which such application is submitted;
(II) Sanctions, other than civil penalties less than or equal to twenty
thousand dollars, imposed in any state through final adjudication under
the Medicare or Medicaid program pursuant to Title XVIII or XIX of the
federal Social Security Act, 42 USC 301, as amended from time to time;
(III) Termination or nonrenewal of a Medicare or Medicaid provider
agreement;
(IV) Any state licensing or federal certification deficiency during the
five-year period prior to the submission of the application that
presented a serious risk to the life, safety or quality of care of the
facility's patients or residents; and
(V) Any violation of any state licensing or federal certification
standard in connection with an inappropriate discharge or denial of
admission; and
(H) Disclosure of whether each proposed new owner has ever been House Bill No. 6731
Public Act No. 23-122 9 of 14
convicted or pleaded guilty to a charge of fraud, patient or resident
abuse or neglect or a crime of violence or moral turpitude.
(4) After receiving an application for change in ownership, the
commissioner may schedule an inspection of such facility or institution
to determine if the facility or institution has complied with the
requirements of this chapter and the regulations of Connecticut state
agencies relating to licensure of such facility or institution.
(5) When evaluating an application for a change in ownership, the
commissioner shall consider whether each proposed new owner and
beneficial owner demonstrates character and competence, quality of
care and whether an acceptable history of past and current compliance
with state licensure requirements, applicable federal requirements and
state regulatory requirements exists for each licensed health care facility
owned, operated or managed by each proposed new owner and
beneficial owner in the United States or any territory of the United States
during the five years preceding the date on which such application is
submitted. The commissioner may deny an application for change in
ownership if such qualities are not demonstrated, as evidenced by:
(A) Any such licensed health care facility being subject to any adverse
action described in subparagraph (G)(iii) of subdivision (3) of this
subsection;
(B) Any such licensed health care facility exhibiting continuing
violations or a pattern of violations of state licensure standards or
federal certification standards; or
(C) An applicant's criminal conviction of, or guilty plea to, any of the
crimes described in subparagraph (H) of subdivision (3) of this
subsection.
(6) Notwithstanding the provisions of subdivision (5) of this
subsection, the commissioner may stay the determination of an House Bill No. 6731
Public Act No. 23-122 10 of 14
application if the commissioner determines that there is a pending
investigation of actions of the applicant at any facility operated or
managed by the applicant that, if substantiated, would constitute a
threat to the life, safety or quality of care of the patients or residents until
such time as there is a final determination of the allegations underlying
the investigation.
(7) If the commissioner denies an application for change in
ownership, a person related by blood or marriage to the applicant may
not apply to acquire ownership interest in the facility or institution.
(8) In the event of a change in ownership or beneficial ownership
resulting in a transfer to a person related by blood or marriage to an
owner or beneficial owner, the commissioner may waive the submission
of information required pursuant to the provisions of subparagraph (G)
of subdivision (3) of this subsection. In the event of a change in
ownership or beneficial ownership of five per cent or less of the
ownership of a business entity that is a licensed institution, the
commissioner may waive the submission of some or all of the
information required pursuant to the provisions of subdivision (3) of
this subsection or the determination required pursuant to subdivision
(5) of this subsection. The commissioner shall develop an application
process through which a person may request a waiver described in this
subdivision and criteria to be used by the commissioner when
evaluating such a request. The commissioner shall consult with
representatives of the long-term care industry when developing such
application process and criteria.
(9) The provisions of this subsection shall not apply the event of a
change of ownership or beneficial ownership of ten per cent or less of
the ownership of a licensed outpatient surgical facility, as defined in
section 19a-493b, resulting in a transfer to a physician licensed under
chapter 370 if such facility provides information, in a form and manner
prescribed by the commissioner, to update such facility's licensing House Bill No. 6731
Public Act No. 23-122 11 of 14
information.
[(c)] (d) (1) A multicare institution may, under the terms of its existing
license, provide behavioral health services or substance use disorder
treatment services on the premises of more than one facility, at a satellite
unit or at another location outside of its facilities or satellite units that is
acceptable to the patient receiving services and is consistent with the
patient's assessment and treatment plan. Such behavioral health
services or substance use disorder treatment services may include
methadone delivery and related substance use treatment services to
persons in a nursing home facility pursuant to the provisions of section
19a-495c or in a mobile narcotic treatment program, as defined in 21 CFR
1300.
(2) Any multicare institution that intends to offer services at a satellite
unit or other location outside of its facilities or satellite units shall submit
an application for approval to offer services at such location to the
Department of Public Health. Such application shall be submitted on a
form and in the manner prescribed by the Commissioner of Public
Health. Not later than forty-five days after receipt of such application,
the commissioner shall notify the multicare institution of the approval
or denial of such application. If the satellite unit or other location is
approved, that satellite unit or location shall be deemed to be licensed
in accordance with this section and shall comply with the applicable
requirements of this chapter and regulations adopted under this
chapter.
(3) A multicare institution that is a hospital providing outpatient
behavioral health services or other health care services shall provide the
Department of Public Health with a list of satellite units or locations
when completing the initial or renewal licensure application.
(4) The Commissioner of Public Health may adopt regulations, in
accordance with the provisions of chapter 54, to carry out the provisions House Bill No. 6731
Public Act No. 23-122 12 of 14
of this subsection. The Commissioner of Public Health may implement
policies and procedures necessary to administer the provisions of this
subsection while in the process of adopting such policies and
procedures as regulation, provided the commissioner prints notice of
intent to adopt regulations in the Connecticut Law Journal not later than
twenty days after the date of implementation. Policies and procedures
implemented pursuant to this section shall be valid until the time final
regulations are adopted.
Sec. 2. Subsection (a) of section 19a-491a of the general statutes is
repealed and the following is substituted in lieu thereof (Effective October
1, 2023):
(a) A person seeking a license to establish, conduct, operate or
maintain a nursing home shall provide the Department of Public Health
with the following information:
(1) (A) The name and business address of the owner and a statement
of whether the owner is an individual, partnership, corporation or other
legal entity; (B) the names of the officers, directors, trustees, or
managing and general partners of the owner, the names of persons
having a [ten] five per cent or greater ownership interest in the owner,
and a description of each such person's occupation with the owner; and
(C) if the owner is a corporation which is incorporated in another state,
a certificate of good standing from the secretary of state of the state of
incorporation;
(2) A description of the relevant business experience of the owner and
of the administrator of the nursing home and evidence that the
administrator has a license issued pursuant to section 19a-514;
(3) Affidavits signed by the owner, any of the persons described in
subdivision (1) of this subsection, the administrator, assistant
administrator, the medical director, the director of nursing and assistant House Bill No. 6731
Public Act No. 23-122 13 of 14
director of nursing disclosing any matter in which such person has been
convicted of a felony, as defined in section 53a-25, or has pleaded nolo
contendere to a felony charge, or has been held liable or enjoined in a
civil action by final judgment, if the felony or civil action involved fraud,
embezzlement, fraudulent conversion or misappropriation of property;
or is subject to an injunction or restrictive or remedial order of a court of
record at the time of application, within the past five years has had any
state or federal license or permit suspended or revoked as a result of an
action brought by a governmental agency or department, arising out of
or relating to health care business activity, including, but not limited to,
actions affecting the operation of a nursing home, retirement home,
residential care home or any facility subject to sections 17b-520 to 17b-
535, inclusive, or a similar statute in another state or country;
(4) (A) A statement as to whether or not the owner is, or is affiliated
with, a religious, charitable or other nonprofit organization; (B) the
extent of the affiliation, if any; (C) the extent to which the affiliate
organization will be responsible for the financial obligations of the
owner; and (D) the provision of the Internal Revenue Code of 1986, or
any subsequent corresponding internal revenue code of the United
States, as from time to time amended, if any, under which the owner or
affiliate is exempt from the payment of income tax;
(5) The location and a description of other health care facilities of the
owner, existing or proposed, and, if proposed, the estimated completion
date or dates and whether or not construction has begun; and
(6) If the operation of the nursing home has not yet commenced, a
statement of the anticipated source and application of the funds used or
to be used in the purchase or construction of the home, including:
(A) An estimate of such costs as financing expense, legal expense,
land costs, marketing costs and other similar costs which the owner
expects to incur or become obligated for prior to the commencement of House Bill No. 6731
Public Act No. 23-122 14 of 14
operations; and
(B) A description of any mortgage loan or any other financing
intended to be used for the financing of the nursing home, including the
anticipated terms and costs of such financing.
Sec. 3. Subsection (a) of section 19a-528a of the general statutes is
repealed and the following is substituted in lieu thereof (Effective October
1, 2023):
(a) For any application of licensure for the acquisition of a nursing
home, any potential nursing home licensee or owner shall submit in
writing, a change in ownership application with respect to the facility
for which the change in ownership is sought. The application shall be
submitted in the form and manner prescribed by the Commissioner of
Public Health. The commissioner shall include on the first page of the
application the following statement: "NOTICE: The State of Connecticut
values the quality of care provided to all nursing home residents. Please
know that any nursing home licensee, owner or officer, including, but
not limited to, a director, trustee, limited partner, managing partner,
general partner or any person having at least a [ten] five per cent
ownership interest in the nursing home or the entity that owns the
nursing home, and any administrator, assistant administrator, medical
director, director of nursing or assistant director of nursing may be
subject to civil and criminal liability, as well as administrative sanctions
under applicable federal and state law, for the abuse or neglect of a
resident of the nursing home perpetrated by an employee of the nursing
home.".