N.Y. Mental Hyg. Law § 31.20

* § 31.20 Temporary operator.\n (a) For the purposes of this section:\n (1) "Established operator" shall mean the operator of a mental health\nprogram that has been established and issued an operating certificate\npursuant to this article.\n (2) "Extraordinary financial assistance" shall mean state funds\nprovided to, or requested by, a program for the express purpose of\npreventing the closure of the program that the commissioner finds\nprovides essential and necessary services within the community.\n (3) "Mental health program" shall mean a provider of services for\npersons with serious mental illness, as such terms are defined in\nsection 1.03 of this chapter, which is licensed or operated by the\noffice.\n (4) "Office" shall mean the office of mental health.\n (5) "Serious financial instability" shall include but not be limited\nto defaulting or violating material covenants of bond issues, missed\nmortgage payments, a pattern of untimely payment of debts, failure to\npay its employees or vendors, insufficient funds to meet the general\noperating expenses of the program, failure to maintain required debt\nservice coverage ratios and/or, as applicable, factors that have\ntriggered a written event of default notice to the office by the\ndormitory authority of the state of New York.\n (6) "Temporary operator" shall mean any operator of a mental health\nprogram that has been established and issued an operating certificate\npursuant to this article or which is directly operated by the office of\nmental health, that:\n a. agrees to operate a mental health program on a temporary basis in\nthe best interests of its patients served by the program; and\n b. has a history of compliance with applicable laws, rules, and\nregulations and a record of providing care of good quality, as\ndetermined by the commissioner; and\n c. prior to appointment as temporary operator, develops a plan\ndetermined to be satisfactory by the commissioner to address the\nprogram's deficiencies.\n (b) (1) In the event that: (i) the established operator is seeking\nextraordinary financial assistance; (ii) office collected data\ndemonstrates that the established operator is experiencing serious\nfinancial instability issues; (iii) office collected data demonstrates\nthat the established operator's board of directors or administration is\nunable or unwilling to ensure the proper operation of the program; or\n(iv) office collected data indicates there are conditions that seriously\nendanger or jeopardize continued access to necessary mental health\nservices within the community, the commissioner shall notify the\nestablished operator of his or her intention to appoint a temporary\noperator to assume sole responsibility for the program's treatment\noperations for a limited period of time. The appointment of a temporary\noperator shall be effectuated pursuant to this section, and shall be in\naddition to any other remedies provided by law.\n (2) The established operator may at any time request the commissioner\nto appoint a temporary operator. Upon receiving such a request, the\ncommissioner may, if he or she determines that such an action is\nnecessary, enter into an agreement with the established operator for the\nappointment of a temporary operator to restore or maintain the provision\nof quality care to the patients until the established operator can\nresume operations within the designated time period; the patients may be\ntransferred to other mental health programs operated or licensed by the\noffice; or the operations of the mental health program should be\ncompletely discontinued.\n (c) (1) A temporary operator appointed pursuant to this section shall\nuse his or her best efforts to implement the plan deemed satisfactory by\nthe commissioner to correct or eliminate any deficiencies in the mental\nhealth program and to promote the quality and accessibility of mental\nhealth services in the community served by the mental health program.\n (2) If the identified deficiencies cannot be addressed in the time\nperiod designated in the plan, the patients shall be transferred to\nother appropriate mental health programs licensed or operated by the\noffice.\n (3) During the term of appointment, the temporary operator shall have\nthe authority to direct the staff of the established operator as\nnecessary to appropriately treat and/or transfer the patients. The\ntemporary operator shall, during this period, operate the mental health\nprogram in such a manner as to promote safety and the quality and\naccessibility of mental health services in the community served by the\nestablished operator until either the established operator can resume\nprogram operations or until the patients are appropriately transferred\nto other programs licensed or operated by the office.\n (4) The established operator shall grant access to the temporary\noperator to the established operator's accounts and records in order to\naddress any deficiencies related to a mental health program experiencing\nserious financial instability or an established operator requesting\nfinancial assistance in accordance with this section. The temporary\noperator shall approve any financial decision related to a program's day\nto day operations or program's ability to provide mental health\nservices.\n (5) The temporary operator shall not be required to file any bond. No\nsecurity interest in any real or personal property comprising the\nestablished operator or contained within the established operator or in\nany fixture of the mental health program, shall be impaired or\ndiminished in priority by the temporary operator. Neither the temporary\noperator nor the office shall engage in any activity that constitutes a\nconfiscation of property.\n (d) The temporary operator shall be entitled to a reasonable fee, as\ndetermined by the commissioner and subject to the approval of the\ndirector of the division of the budget, and necessary expenses incurred\nwhile serving as a temporary operator. The temporary operator shall be\nliable only in its capacity as temporary operator of the mental health\nprogram for injury to person and property by reason of its operation of\nsuch program; no liability shall incur in the temporary operator's\npersonal capacity, except for gross negligence and intentional acts.\n (e) (1) The initial term of the appointment of the temporary operator\nshall not exceed ninety days. After ninety days, if the commissioner\ndetermines that termination of the temporary operator would cause\nsignificant deterioration of the quality of, or access to, mental health\ncare in the community or that reappointment is necessary to correct the\ndeficiencies that required the appointment of the temporary operator,\nthe commissioner may authorize an additional ninety-day term. However,\nsuch authorization shall include the commissioner's requirements for\nconclusion of the temporary operatorship to be satisfied within the\nadditional term.\n (2) Within fourteen days prior to the termination of each term of the\nappointment of the temporary operator, the temporary operator shall\nsubmit to the commissioner and to the established operator a report\ndescribing:\n a. the actions taken during the appointment to address the identified\nmental health program deficiencies, the resumption of mental health\nprogram operations by the established operator, or the transfer of the\npatients to other providers licensed or operated by the office;\n b. objectives for the continuation of the temporary operatorship if\nnecessary and a schedule for satisfaction of such objectives; and\n c. if applicable, the recommended actions for the ongoing operation of\nthe mental health program subsequent to the temporary operatorship.\n (3) The term of the initial appointment and of any subsequent\nreappointment may be terminated prior to the expiration of the\ndesignated term, if the established operator and the commissioner agree\non a plan of correction and the implementation of such plan.\n (f) (1) The commissioner shall, upon making a determination of an\nintention to appoint a temporary operator pursuant to paragraph one of\nsubdivision (b) of this section cause the established operator to be\nnotified of the intention by registered or certified mail addressed to\nthe principal office of the established operator. Such notification\nshall include a detailed description of the findings underlying the\nintention to appoint a temporary operator, and the date and time of a\nrequired meeting with the commissioner and/or his or her designee within\nten business days of the receipt of such notice. At such meeting, the\nestablished operator shall have the opportunity to review and discuss\nall relevant findings. At such meeting, the commissioner and the\nestablished operator shall attempt to develop a mutually satisfactory\nplan of correction and schedule for implementation. In such event, the\ncommissioner shall notify the established operator that the commissioner\nwill abstain from appointing a temporary operator contingent upon the\nestablished operator remediating the identified deficiencies within the\nagreed upon timeframe.\n (2) Should the commissioner and the established operator be unable to\nestablish a plan of correction pursuant to paragraph one of this\nsubdivision, or should the established operator fail to respond to the\ncommissioner's initial notification, there shall be an administrative\nhearing on the commissioner's determination to appoint a temporary\noperator to begin no later than thirty days from the date of the notice\nto the established operator. Any such hearing shall be strictly limited\nto the issue of whether the determination of the commissioner to appoint\na temporary operator is supported by substantial evidence. A copy of the\ndecision shall be sent to the established operator.\n (3) If the decision to appoint a temporary operator is upheld such\ntemporary operator shall be appointed as soon as is practicable and\nshall operate the mental health program pursuant to the provisions of\nthis section.\n (g) Notwithstanding the appointment of a temporary operator, the\nestablished operator shall remain obligated for the continued operation\nof the mental health program so that such program can function in a\nnormal manner. No provision contained in this section shall be deemed to\nrelieve the established operator or any other person of any civil or\ncriminal liability incurred, or any duty imposed by law, by reason of\nacts or omissions of the established operator or any other person prior\nto the appointment of any temporary operator of the program hereunder;\nnor shall anything contained in this section be construed to suspend\nduring the term of the appointment of the temporary operator of the\nprogram any obligation of the established operator or any other person\nfor the maintenance and repair of the facility, provision of utility\nservices, payment of taxes or other operating and maintenance expenses\nof the facility, nor of the established operator or any other person for\nthe payment of mortgages or liens.\n (h) Upon appointment of a temporary operator, the commissioner shall\ncause the temporary president of the senate, the speaker of the\nassembly, and the chairs of the senate mental health and developmental\ndisabilities committee and the assembly mental health committee to be\nnotified of such determination. Such notification shall include, but not\nbe limited to, the name of the established operator, the name of the\nappointed temporary operator and a description of the reasons for such\ndetermination to the extent practicable under the circumstances and in\nthe sole discretion of the commissioner.\n * NB Repealed March 31, 2028\n