On Thursday, February 6, 2020, the Public Health and Health Planning Council (“PHHPC”) voted to adopt the Department of Health’s (“DOH”) final amendments to the licensure requirements for Licensed Home Care Services Agencies (“LHCSA”) operating in New York State (the “Adopted Regulations”). These regulations will replace prior regulations and end the LHCSA application moratorium (the “Moratorium”) that went into effect on April 1, 2018 and is set to expire on March 31, 2020.
Under the Adopted Regulations, in addition to the existing requirement of undergoing a character and competence review, a LHCSA applicant will now be required to include in its application: (i) a demonstration of public need for additional LHCSA providers or services in a given planning area, i.e., county; and (ii) provide proof of financial resources and feasibility to operate the entity. Failure on either one of these grounds will result in a denial of the application. Furthermore, the Adopted Regulations provide that DOH’s determination to approve or deny an application may be made solely on the threshold matter of establishing a public need. If DOH determines that such a need does exist, the application will then be subjected to financial feasibility and character and competence reviews.
Applicants Are Now Required to Demonstrate Public Need
The demonstrated public need requirement is a holdover from the Moratorium, which required proof that a need existed that was not being addressed by currently registered LHCSAs operating within a county. However, while the Moratorium established a rebuttable presumption that adequate access to care existed if there are two or more LHCSAs already approved in the applicant’s proposed county, the Adopted Regulations expand that rebuttable presumption to five or more LHCSAs actively operating in a county as of April 1, 2020.
Under the Adopted Regulations, DOH will consider the following factors when determining whether there is a need for additional LHCSA services in a given area:
- demographics and/or health status of the residents in the planning area;
- documented evidence of patients who experience a long waiting time for placement;
- number and capacity of currently operating LHCSAs;
- quality of services provided by existing agencies;
- availability and accessibility of the workforce;
- personnel and resources dedicated to adding and training additional members of the workforce;
- cultural competency of existing agencies; and
- subpopulations requiring specialty services.
The Adopted Regulations explicitly state that LHCSAs seeking initial certification will only be approved as meeting a demonstrated public need if the LHCSA agrees to serve population groups in a county that has difficulty gaining access to appropriate LHCSA care due to minority status, age, medical history, case complexity, payment source, or geographic location.
LHCSAs affiliated with an Assisted Living Program (ALP), Program of All-Inclusive Care for the Elderly (PACE), Nurse Family Partnership (NFP), or Continuing Care Retirement Community (CCRC) are not required to submit to a public need review unless that agency intends to serve patients outside its licensed program. Additionally, an application based on a change of ownership in an actively licensed LHCSA with at least 25 patients will not be subject to the public need requirement.
LHCSA Applicants Must Demonstrate Financial Feasibility
DOH’s review of a LHCSA applicant’s financial feasibility will be based upon (i) an examination of the sources of available working capital, with a minimum requirement of at least two months estimated operating expenses; (ii) the application passing a reasonableness test with respect to the financial capability of the LHCSA for start-up funding; and (iii) projections indicating that the LHCSA’s revenues, including but not limited to operating revenue, will be equal to or greater than projected expenditures over time.
New Circumstances Added Impacting The Need to Amend a LHCSA Application.
The Adopted Regulations expand the definition of what would be considered a circumstance requiring an amendment to an application prior to approval. Previously, a LHCSA applicant would need to amend its application if there was a change in the types of services the applicant would provide or if there was a change in the individuals being considered by PHHPC as part of the LHCSA applicant’s character and competence review. Now, under the Adopted Regulations, an application is required to be amended when there has been (i) a significant change in the individuals being considered by PHHPC; (ii) any significant change in the LHCSA’s proposed patient capacity; (iii) any change in the LHCSA’s proposed service area; and/or (iv) any significant change to the LHCSA’s proposed annual operating budget. Failure on the part of a LHCSA to disclose any of these circumstances prior to DOH issuing a license will be considered sufficient grounds for the revocation, limitation or annulment of DOH’s approval.
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