§ 4604 — Certificate of authority required; application and approval

§ 4604. Certificate of authority required; application and approval.\n1. No person shall construct, expand, acquire, maintain, or operate a\ncontinuing care retirement community, or enter into a contract as an\noperator, or solicit the execution of any contract for continuing care\nretirement community services to be provided within the state or\nadvertise itself or otherwise hold itself as a "continuing care\nretirement community", without obtaining a certificate of authority\npursuant to this article; provided, however, nothing in this subdivision\nshall prohibit a person, authorized pursuant to section forty-six\nhundred twenty-one or forty-six hundred twenty-two of this article, from\nentering into priority reservation agreements, soliciting, collecting or\nreceiving priority reservation fees, or constructing and maintaining\nsales offices and model units with respect to a proposed continuing care\nretirement community.\n 2. In order to receive a certificate of authority to enter into\ncontracts with respect to a particular community, a person or persons,\nhereinafter designated as the applicant, shall apply for a certificate\nof authority on forms prescribed by the commissioner and, in addition,\nshall submit the following:\n a. a feasibility study, including a market analysis describing the\ncharacteristics of the population to be served;\n b. an actuarial study;\n c. an initial disclosure statement as provided pursuant to section\nforty-six hundred six of this title;\n d. a copy of the proposed forms of contracts to be entered into with\nresidents;\n e. complete details of any agreements with a licensed insurer,\nincluding copies of proposed contracts, requiring the insurer to assume,\nwholly or in part, the cost of medical or health related services to be\nprovided to a resident pursuant to a continuing care retirement contract\nor continuing care at home contract;\n f. a copy of each of the basic organizational documents and agreements\nof the applicant of all participating entities;\n g. a copy of the bylaws, rules and regulations and internal governing\ndocuments of the applicant;\n h. architectural program and sketches for the community;\n i. the proposed community plan, including the number of independent\nliving units, skilled nursing facility beds, adult care facility beds,\nif any, and a description of other social and health services provided\nby the community;\n j. copies of financial and personal disclosure information as required\nby the council for the applicant and members of the board, officers, and\ncontrolling persons of the proposed continuing care retirement\ncommunity, including:\n (i) information necessary for the determination by the council of\ncharacter, competence, and experience, where information adequate to\nmake such determinations is not otherwise available to the council,\n (ii) a list of continuing care retirement communities, adult care\nfacilities and health care facilities owned or operated by the\napplicant, by any controlling persons of the applicant, or by entities\nwith which the members of the applicant's board are affiliated; the\naddress of each such facility; and the dates of ownership or operation\nof each such facility,\n (iii) in the event that any such community or facility specified in\nthis subdivision while under the control or operation of the applicant,\nor any controlling person has been subjected to a limitation,\nwithdrawal, or refusal to grant accreditation by a recognized\naccreditation organization, because of failure to comply with standards\ngoverning the conduct and operation of the facility, information that\ndescribes the nature of the violation, the agency or body enforcing the\nstandard (including its name and address), the steps taken by the\nfacility to remedy the violation, and an indication of whether any\naccreditation has since been restored, and\n (iv) a statement as to whether the applicant or any of its officers,\ndirectors, partners, managers or a principal, parent or subsidiary\ncorporation:\n (A) has been convicted of a crime or pleaded nolo contendere to a\nfelony charge, or been held liable or enjoined in a civil action by\nfinal judgment if the criminal or civil action involved fraud,\nembezzlement, fraudulent conversion, or misappropriation of property,\n (B) had a prior discharge in bankruptcy or was found insolvent in any\ncourt action,\n (C) is or was subject to a currently effective injunctive or\nrestrictive order or federal or state administrative order relating to\nbusiness activity or health care as a result of an action brought by a\npublic agency or department, including, without limitation, actions\naffecting a license to operate a hospital as defined by section\ntwenty-eight hundred one of this chapter, or a facility required to be\nlicensed or certified by the department. The statement shall set forth\nthe court or agency, date of conviction or judgment, the penalty imposed\nor damages assessed, or the date, nature and issuer of the order;\n k. information which describes the populations to be served; and\n l. any other information as may be required by regulations adopted\npursuant to this article.\n 3. Nothing in this article shall be construed to enlarge, diminish or\nmodify: a social services district's otherwise valid recovery under\nsection three hundred sixty-nine of the social services law, nor medical\nassistance eligibility under title eleven of article five of the social\nservices law nor applicable provisions of the estates, powers and trusts\nlaw. Except as otherwise provided in this article, the activities of\ncontinuing care retirement communities shall be subject to any other law\ngoverning such activities including but not limited to article\ntwenty-eight of this chapter and article seven of the social services\nlaw and regulations promulgated thereunder; provided, however, that the\nprovisions of paragraphs (d) and (e) of subdivision four of section\ntwenty-eight hundred one-a and section twenty-eight hundred two of this\nchapter shall not apply, and provided that the provisions of paragraph\n(a) of subdivision one and the provisions of subdivision two of section\nfour hundred sixty-one-b of the social services law with respect to\npublic need and the provisions of subdivision one of section four\nhundred sixty-one-c of the social services law shall not apply to\nresidents who have been admitted in accordance with a contract provided\nthat, upon admission to the adult care facility, such residents shall be\ngiven a notice which shall include, at a minimum, information regarding\nfacility services, resident responsibilities, supplemental services,\nresident rights and protections and circumstances that warrant transfer.\nThe number of residential health care facility beds available pursuant\nto subdivision five of this section, without proof of public need\ntherefor, shall be reduced by the number of residential health care\ndemonstration facility beds that are approved pursuant to this article.\n * 4. No certificate of authority shall be issued unless an application\nmeeting the requirements of this section and all other requirements\nestablished by law has been approved by:\n a. (i) the superintendent of financial services as to the actuarial\nprinciples involved, the financial feasibility of the facility, the form\nand content of the proposed contracts to be entered into with residents\nand insurance contracts between an operator and an insurer requiring the\ninsurer to assume, wholly or in part, the cost of medical or health\nrelated services to be provided to a resident;\n (ii) the superintendent of financial services as to the rates and\nrating methodology, if any, to be used by the operator to determine any\nentrance fee, monthly care fee and/or any separate charges for the\nhousing component of the continuing care contract including but not\nlimited to a cooperative or condominium fee charged to the resident as\nproposed in said operator's application for certificate of authority.\nSubsequent increases in any entrance or monthly care fee in excess of\nfees calculated pursuant to the approved rating methodology shall\nrequire approval of the superintendent. The term "rating methodology" as\nused herein shall incorporate a combination of variables including but\nnot limited to a pricing structure for comparable services, projected\noperating and health care costs and the applicable inflationary impact\nthereon, projected income and occupancy rates and the refundability\ncomponent of the continuing care retirement contract.\n (iii) the superintendent of financial services as to any monthly care\nfee charged to a resident which may be increased or decreased subject to\napproval by the superintendent of financial services, provided, that\nmonthly care fees may be increased or decreased without specific\napproval as long as such increase or decrease does not exceed a relevant\ncost index or indices which reflect all components of continuing care\nincluding the costs associated with provision of health care as\ndetermined and promulgated at least annually by the superintendent, and\nprovided further that the superintendent is notified of any such\nincrease or decrease prior to its taking effect.\n (iv) An individual resident's monthly care fee shall not be modified\nbecause of the increased need for services of that resident;\n b. the commissioner as to those aspects of the application relating to\nadult care facility beds, if any;\n c. the public health and health planning council as to the\nestablishment of a skilled nursing facility by the applicant and as to\nsuch other facilities and services as may require the public health and\nhealth planning council's approval of the application; provided,\nhowever, that the recommendations of the health systems agency having\ngeographical jurisdiction of the area where the continuing care\nretirement community is located shall not be required with respect to\nthe establishment of an on-site or affiliated residential health care\nfacility to serve residents as part of the continuing care retirement\ncommunity, for up to the total number of residential health care\nfacility beds provided for in subdivision five of this section in\ncommunities statewide;\n d. the commissioner under section twenty-eight hundred two of this\nchapter; provided, however, that, the recommendations of the public\nhealth and health planning council and the health systems agency having\ngeographical jurisdiction of the area where the continuing care\nretirement community is located shall not be required with respect to\nthe construction of an on-site or affiliated residential health care\nfacility to serve residents as part of the continuing care retirement\ncommunity, for up to the total number of residential health care\nfacility beds provided for in subdivision five of this section in\ncommunities statewide; and\n e. the attorney general as to those aspects of the application\nrelating to a cooperative, condominium or other equity arrangement for\nthe independent living unit, if any.\n * NB Effective until June 1, 2026\n * 4. No certificate of authority shall be issued unless the\ncommissioner has approved an application meeting the requirements of\nthis section and all other requirements established by law including:\n a. the actuarial principles involved, the financial feasibility of the\nfacility, the form and content of the proposed contracts to be entered\ninto with residents and insurance contracts between an operator and an\ninsurer requiring the insurer to assume, wholly or in part, the cost of\nmedical or health related services to be provided to a resident,\nprovided that the review may be conducted by the commissioner or the\ndesignee of such commissioner, including any necessary independent\nactuarial review;\n b. the rates and rating methodology, if any, to be used by the\noperator to determine any entrance fee, monthly care fee and/or any\nseparate charges for the housing component of the continuing care\ncontract including but not limited to a cooperative or condominium fee\ncharged to the resident as proposed in said operator's application for\ncertificate of authority. Subsequent increases in any entrance or\nmonthly care fee in excess of fees calculated pursuant to the approved\nrating methodology shall require approval of the commissioner. The term\n"rating methodology" as used herein shall incorporate a combination of\nvariables including but not limited to a pricing structure for\ncomparable services, projected operating and health care costs and the\napplicable inflationary impact thereon, projected income and occupancy\nrates and the refundability component of the continuing care retirement\ncontract;\n c. any monthly care fee charged to a resident which may be increased\nor decreased subject to approval by the commissioner, provided, that\nmonthly care fees may be increased or decreased without specific\napproval as long as such increase or decrease does not exceed a relevant\ncost index or indices which reflect all components of continuing care\nincluding the costs associated with provision of health care as\ndetermined and promulgated at least annually by the commissioner or the\ndesignee of such commissioner, including any necessary independent\nactuarial review, and provided further that the commissioner is notified\nof any such increase or decrease prior to its taking effect;\n d. the requirement that an individual resident's monthly care fee\nshall not be modified because of the increased need for services of that\nresident;\n e. aspects of the application relating to adult care facility beds, if\nany;\n f. review by the public health and health planning council as to the\nestablishment of a skilled nursing facility by the applicant and as to\nsuch other facilities and services as may require the public health and\nhealth planning council's approval of the application; provided,\nhowever, that the recommendations of the health systems agency having\ngeographical jurisdiction of the area where the continuing care\nretirement community is located shall not be required with respect to\nthe establishment of an on-site or affiliated residential health care\nfacility to serve residents as part of the continuing care retirement\ncommunity, for up to the total number of residential health care\nfacility beds provided for in subdivision five of this section in\ncommunities statewide;\n provided, further, that, the recommendations of the public health and\nhealth planning council and the health systems agency having\ngeographical jurisdiction of the area where the continuing care\nretirement community is located shall not be required with respect to\nthe construction of an on-site or affiliated residential health care\nfacility to serve residents as part of the continuing care retirement\ncommunity, for up to the total number of residential health care\nfacility beds provided for in subdivision five of this section in\ncommunities statewide; and\n g. upon consultation with the attorney general, as to those aspects of\nthe application relating to a cooperative, condominium or other equity\narrangement for the independent living unit, if any.\n * NB Effective June 1, 2026\n 5. Up to two thousand residential health care facility beds, as\nauthorized herein, that may be approved as components of continuing care\nretirement communities shall not be considered by the department and the\nhealth systems agencies in the determination of public need for\nresidential health care facility services; provided, however, that if\nthe community seeking to construct such beds does not provide life care\nto all residents, it must adequately make the assurances required by\nsubdivision two of section forty-six hundred twenty-four of this\narticle.\n 6. If the applicant has satisfied the criteria required by subdivision\nfour of this section, the commissioner shall either approve or reject\nthe application. In order to approve the application, the commissioner\nshall have determined that:\n a. the proposed community will meet a need and will fulfill the\npurposes of this article;\n b. the applicant has satisfied the requirements of this article;\n c. the applicant has demonstrated to the satisfaction of the council\nthat the applicant and members of the board, officers, and controlling\npersons of the applicant, are of such character, experience, competence\nand standing in the community as to give reasonable assurance of their\nability to conduct the affairs of the proposed continuing care\nretirement community in the best interest of the community and in the\npublic interest, and to provide proper care to residents. In the case of\nan applicant that is controlled, the council must be satisfied that the\ncontrolling person has also acted in a manner that is consistent with\nthe public interest;\n d. the applicant has otherwise demonstrated the capability to\norganize, market, manage, promote and operate the community and can be\nexpected to meet its obligations in accordance with this article and in\naccordance with its contracts with residents;\n e. the applicant has demonstrated that the total number of beds for\nthe nursing facility component and the adult care facility bears a\nreasonable relation to the number of independent living units proposed\nfor such community; and\n f. with respect to communities which include a residential health care\nfacility which does not require establishment approval under section\ntwenty-eight hundred one-a of this chapter, the applicant has sufficient\nfinancial resources and sources of future revenues for the operation of\nthe residential health care facility component.\n 7. Any change in the legal entity operating the continuing care\nretirement community, or in a controlling person of the community shall\nrequire approval in the same manner as an original application;\nprovided, however, that the commissioner may waive any requirement to\nprovide information that is not relevant to such change and provided,\nfurther, that the continued public need for the community shall be\npresumed.\n 8. The operator shall designate and make knowledgeable personnel\navailable to prospective residents to answer questions about any\ninformation contained in the disclosure statement or contract. The\ndisclosure statement and the contract shall each state on the cover or\ntop of the first page in bold twelve point print the following "This\nmatter involves a substantial financial investment and a legally binding\ncontract. In evaluating the disclosure statement and the contract prior\nto any commitment, it is recommended that you consult with an attorney\nand financial advisor of your choice, if you so elect, who can review\nthese documents with you."\n 9. The commissioner shall issue the certificate of authority to the\napplicant upon approval of the application.\n