Regulations proposed by the Massachusetts Department of Public Health (“DPH”) may significantly change the procedure for state approval of nursing home sales and closures. Following public scrutiny around state inspection problems in some nursing facilities purchased by corporate chains, which have been expanding their presence in the Commonwealth, DPH expressed its intent to revise the process for sales and closures of long-term care facilities.

The FY2015 General Appropriations Act called for DPH to amend licensure procedure and suitability requirements in 105 CMR 153.000 by implementing a public hearing process on any application for a license or any notice of intent to transfer ownership or close any skilled nursing facility. The proposed changes include:

Licensure

• Any 10 Massachusetts residents may submit a petition for a public hearing prior to any issuance of a new license for a long-term care facility. DPH will take any written comments and comments presented at the hearing into consideration of the application for licensure.

Transfer of Ownership

• The definition of “transfer of ownership” would be expanded include any change in the ownership interest or the structure of the licensee or its parent organization that the commissioner determines effects a change of control in the facility’s operation.

• All transfer of ownership applicants must publish notice of the intent to acquire at least 45 days in advance of the proposed date of transfer.

• Any ten Massachusetts residents may submit a petition for a public hearing. DPH will similarly consider these comments during its review of the application. Previously, public hearings for a change of ownership were only available upon a petition by fifty residents for a facility located in Health Systems Area V.

Closure

• A long-term care facility seeking to voluntarily close must provide 120 days advance notice to DPH, rather than the prior 60 days.

• Upon receiving this notice, DPH will schedule a public hearing at least 90 days prior to the proposed closure.

DPH is holding a public hearing on the proposed amendments this Friday, September 4, 2015 at 10:00 AM in the Public Health Council Room. Interested stakeholders may submit electronic testimony and speak at the hearing or may mail submissions to the Office of the General Counsel. Investors, lenders, operators and sellers of nursing facilities are well advised to keep track of these proceedings which will entail possible delays in processing nursing facility change of ownership applications.