Fri, Feb 24, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Private Equity Strategies

Movers and Shakers: New York State contemplates laws to allow private equity and publicly traded investment in health care facilities

Friday, March 22, 2013

By: Michele Masucci & Barbara Asheld Nixon Peabody, LLP

The need for increased private capital investment in New York’s health care facilities is receiving serious attention during negotiation of the 2013–2014 New York State Budget. Governor Andrew M. Cuomo’s budget proposal contains language that authorizes two pilot programs, one in Brooklyn, allowing the Public Health and Health Planning Council to approve business corporations to own or operate hospitals.

Participating entities must affiliate with academic medical centers. These entities would also be permitted to own certified home health care agencies, licensed home care services agencies, and hospices. Specific existing requirements of the approval process relating to stock ownership would be waived.

The governor’s proposal would permit publicly traded companies to own and operate two hospitals in New York and permit for-profit investment in these entities. The New York State Senate proposal authorizes a maximum of ten entities to evaluate the establishment or restructuring of health care delivery systems through increased capital investment. The proposal requires one entity to be in Brooklyn. There would be two routes to approval under the Senate program. The first would build on the governor’s budget proposal but permit only “benefit corporations” to own and operate hospitals. It would continue the ban on investment by publicly traded corporations. The Senate bill would also authorize a second route to approval to test more flexible approaches under which hospitals would be permitted to access private capital. These vehicles would be designed to promote development of new sources of capital and to evaluate the impact private equity investment would have on quality of and access to care and its benefits to the hospital, its patients, and the community. Broader waiver of NYS Public Health Law Article 28 provisions addressing ownership structures would be authorized for the latter type of projects.

Although the bills appear to use the term “hospital” in the broad Public Health Law Article 28 sense and to permit nursing and other health care facilities to participate in the pilot program, they are not entirely clear. Those interested in establishing nursing facilities or diagnostic and treatment facilities under the pilot program may wish to confirm their eligibility by submitting comments. As of March 12, 2013, the NYS Assembly budget proposal contains no language addressing private investment.

Some observers are predicting early resolution of issues and “lock-down” of the budget before April 1, 2013, so time is of the essence for those wishing to submit comments to their legislators or to Governor Cuomo.

This article was contributed by Nixon Peabody, LLP. It does not constitute legal advice, and readers should not act upon the information in this publication without professional counsel. This may be considered advertising under some rules of professional conduct. The original brief can be found here.

 
This article was published in Opalesque's Private Equity Strategies our monthly research update on the global private equity landscape including all sectors and market caps.
Private Equity Strategies
Private Equity Strategies
Private Equity Strategies


Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. People - Kuwait wealth fund head Al Saad said to step down after 14 years[more]

    From Bloomberg.com: Kuwait Investment Authority is set to name Farouk Bastaki as managing director, replacing Bader Al Saad who ran the world's fifth-largest sovereign wealth fund for 14 years, a person familiar with the matter said. The KIA, as the fund is known, is finalizing the appointment, said

  2. Investing - Hedge funds loading up on this dividend stock, The biggest hedge funds have been piling into bank stocks[more]

    Hedge funds loading up on this dividend stock From Incomeinvestors.com: Hedge funds are backing up the truck on Cameco Corp stock. Billionaire Jim Simons owns 389,000 shares. Other Wall Street titans - including Ray Dalio, Ken Griffin, and Chuck Royce - have been quietly building positio

  3. Legal - Fannie, Freddie shares dive after U.S. appeals court ruling[more]

    From Reuters.com: Shares of Fannie Mae and Freddie Mac tumbled more than 30 percent on Tuesday after a U.S. appeals court shut down efforts by hedge funds and other investors to pursue numerous legal claims accusing the U.S. government of seizing their profits following taxpayer bailouts. By a

  4. Institutional investors plan to raise allocations to alternative assets in 2017[more]

    Komfie Manalo, Opalesque Asia: A survey by Context Summits Miami showed that nearly 72% of institutional investors and family offices plan to raise their allocations to alternative asset managers this year, suggesting continued strong demand for the industry. "As many large, brand name f

  5. Comment - Mortgages, mergers and hedge fund fees, Fairholme's Berkowitz responds to court ruling against hedge fund suits of Fannie Mae[more]

    Mortgages, mergers and hedge fund fees From Bloomberg.com: Yesterday the U.S. Court of Appeals for the D.C. Circuit handed down an odd decision in a lawsuit over the government's nationalization of Fannie Mae and Freddie Mac. The key issue is what's called the "Third Amendment," the 2012