New York State Legislature Passes Act Enacting Moratorium on For-Profit Hospices
On June 2, 2022, the New York State Legislature passed A08472, “An Act to Amend the Public Health Law, in Relation to the Establishment, Incorporation, Construction, or Increase in Capacity of For-Profit Hospice” (“the Act”). The Act prohibits the Public Health and Health Planning Council (PHHPC) of the New York Department of Health (DOH) from approving any new applications for the establishment, incorporation, or construction of a for-profit hospice. Additionally, the bill prohibits PHHPC from approving any increases in capacity to existing for-profit hospices in the state. The two current for-profit hospices will remain approved but cannot expand capacity. The Act will now be presented to the Governor for signature. Once signed by the Governor, the Act will become effective immediately.
The justification provided by the New York State Legislature for enacting the Act refers to quality of care concerns at for-profit entities, particularly those owned by private equity firms or publicly traded companies. In May 2021, an article was published in the Journal of the American Medical Association analyzing hospice tax status and ownership and quality of care provided. The article is cited by the Legislature as justification that for-profit entities do not advance the care of patients as effectively as those hospices owned by not-for-profits and have higher rates of complaint allegations and deficiencies. The Act is aimed at ensuring the prioritization of safety and care of patients by controlling ownership.
 Melissa D. Aldridge, Hospice Tax Status and Ownership Matters for Patients and Families, JAMA Internal Med. (May 3, 2021).
*This post was co-authored by Erin Howard, legal intern at Robinson+Cole. Erin is not admitted to practice law.