New York PHHPC Advances Recommendations for Enhanced Oversight of Nursing Home Owners and Operators through Certificate of Need Reviews
September 21, 2026
By: Kaydeen M. Maitland Courtney Ryan
On Sept. 17, 2026, the New York State Public Health and Health Planning Council (PHHPC) received a final report from its Nursing Home Certificate of Need Ad Hoc Committee (the Committee) recommending enhanced oversight of nursing home ownership changes and operations statewide. The Committee was formed after PHHPC declined to approve three proposed nursing home ownership transactions involving conversions from not-for-profit to for-profit operators, where Council members questioned whether the proposed operators had sufficient experience and resources to ensure continued quality resident care and financial sustainability. In response, the Committee developed recommendations organized around three principal "pillars": (1) operator qualifications and experience, (2) financial sustainability and resource adequacy, and (3) related party and administrative oversight.
Pillar 1: Operator Qualifications and Experience
One the Committee's central recommendations is the adoption of a minimum leadership experience threshold for applicants seeking to operate a nursing home. Under the proposal, operators would generally be expected to have at least five years of leadership experience in a health care setting. Relevant experience includes serving as a licensed nursing home administrator, director of nursing, owner/operator or holding another leadership position with responsibility for daily facility operations. Importantly, the proposal does not create an absolute bar for applicants who lack the full five years of qualifying experience. Such applicants would be required to submit a detailed narrative with the initial application demonstrating equivalent qualifications, and PHHPC would retain discretion to evaluate those applications on a case-by-case basis.
The Committee also supports continued use of Independent Quality Monitors where an operator’s performance or quality of care raises sufficient concern to warrant additional oversight by the Department of Health.
Pillar 2: Financial Sustainability and Resource Adequacy
First, the Committee recommends that applicants obtain an independent certification from a third-party auditing firm for all 3-year financial projections and budgets. The purpose of this certification is to affirm that revenue assumptions and profitability projections are reasonable and adequately supported.
In addition, applicants would be required to submit independent professional appraisals addressing property values and fair market rental rates to verify that the financial information submitted is grounded in objective, third-party valuations.
The final recommendation under this pillar addresses real estate transactions involving related parties. The Committee recommends limiting related-party rent arrangements to a maximum of 1.10 debt service coverage, unless a bona fide lender requires a different ratio and that requirement is documented as part of the application. The 1.10 debt service cap would apply only to real estate transactions without a bona fide lender; conventional lenders may require higher debt service coverage ratios. This limitation is intended to reduce the risk that equity will be inappropriately removed from nursing home operations over time, thereby undermining operator liquidity and the quality of resident care.
Pillar 3: Related Party and Administrative Oversight
Under Pillar 3, the Committee recommends that any individual or entity exercising management control or operational influence through a consulting agreement be subject to the same Character and Competence review process as the operator applicant. This approach is intended to prevent individuals from effectively directing operational or financial decisions while avoiding the scrutiny applied to approved operators.
To advance those same goals, the Committee also recommends requiring every natural person owner to sign a notarized certification, under penalty of perjury, affirming that they will exercise independent judgment and retain ultimate authority over all fiscal and operational decisions.
Finally, the Committee recommends consultation between the Department of Health and the New York Attorney General's Medicaid Fraud Control Unit when ownership groups associated with pending applications have previously been the subject of allegations, enforcement actions or settlements, to ensure that prior enforcement history is incorporated into the review process.
Potential Impacts of These Recommendations
If adopted, these recommendations could significantly affect nursing home ownership transfers, acquisitions, management structures and financing arrangements across New York State. Prospective operators may face heightened scrutiny regarding their leadership qualifications, financial projections, related-party transactions, and real estate arrangements. Owners, operators and lenders involved in nursing home transactions should monitor PHHPC’s evaluation of the Committee’s recommendations closely and consider how these requirements may affect transaction planning, deal structures and regulatory approvals going forward.
Bond, Schoeneck & King PLLC provides a full range of legal services for businesses across all sectors, including health care and long-term care providers. If you have questions about how the Committee’s recommendations or PHHPC’s actions may affect your organization, please contact Kaydeen M. Maitland, Courtney Ryan or the Bond attorney with whom you regularly work. Our attorneys will continue to monitor developments and provide further updates as they become available.
