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NEW YORK STATE DEPARTMENT OF HEALTH
TO: Members of the Public Health Council
FROM: Susan Regan Esq.
Thomas J. Sinatra, M. D.
SUBJECT: Representative Governance
DATE: March 7, 2001
This is to present the recommendations of the Workgroup on Representative Governance, a joint endeavor of the Establishment Committee of the Public Health Council and the Planning Committee of the State Hospital Review and Planing Council These recommendations are a product of the Workgroup's meetings, which began in April, 2000, and of background work by Department staff, especially in the area of renal dialysis. We present these recommendations for consideration as a policy to guide the councils and the Department in reviewing applications for representative governance for Article 28 providers.
Because of the significant decline in real terms of Medicare reimbursement for ESRD services since the inception of the program in 1973: the access to capital and the efficiencies offered by the national and international firms can provide a positive benefit to the provision of quality dialysis services. Therefore, the Workgroup recommends that the SHRPC and the PHC continue to Consider, and where appropriate approve, applications for representative governance arrangements between dialysis providers and outside entities not eligible for establishment under Article 28, provided that any such arrangements are consistent with the principles set forth in the memorandum Of DOH General Counsel to the SHRPC and the PHC of September 21, 1999:
Unlike providers of chronic renal dialysis, other Article 28 facilities---hospitals, nursing homes, general D & T centers and ambulatory surgery centers (ASCs)--- are not dependent on an exclusive funding source, nor do they offer a single, discrete service to a population with a common diagnosis. Therefore, they are viewed differently for representative governance purposes. For example, the status of the voluntary general hospital as a resource to the local community may make the preservation of local control of the institution advisable.
The workgroup recommends that, for the immediate future, the Public Health Council and the State Hospital Review and Planning Council consider, on a case-by-case basis, applications that involve representative governance arrangements for types of Article 28 providers other than renal dialysis facilities, provided that such proposals are not inconsistent with the general principles set forth in the cited September 21, 1999 memorandum and also maintain, at a minimum:
Local control and accountability of the provider shall mean:
Preservation of the use of the assets of the Article 28 provider for the community shall mean:
The Workgroup notes that non-dialysis Article 28 providers vary widely in their organization, financial needs, services offered and populations served. The approach we have recommended for review of local control, accountability and preservation of assets should therefore be applied on a case-by-case basis. We also suggest that the councils consider applying these criteria for an interim period. We further recommend that the councils appoint a new joint work group to evaluate whether to make the review criteria for local control, accountability and preservation of assets permanent, through regulation or legislation. The workgroup could also consider the question of whether representative governance should be restricted to certain categories of providers. At the end of the interim period, the full PHC and SHRPC could evaluate the impact of the recommended review criteria for local control, accountability and preservation of assets, in light of the types of representative governance applications brought before each council for consideration.
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