(a) The department may deny the issuance of a registration, revoke or suspend the registration of a shared health facility upon one or more of the following grounds:

1. (1) a finding by the department that false information was submitted as part of the application;
2. (2) a finding of fraudulent practices on the part of any of the facility's providers or purveyors;
3. (3) a finding by the department that the facility is not in substantial compliance with the minimum physical or environmental standards for shared health facilities as set forth in this Part, provided, however, that a provisional registration may be issued to a facility operating prior to September 1, 1977, which is not in substantial compliance with these regulations when the condition of the premises does not constitute an immediate danger to the public health; the physical deficiencies are capable of correction within a set period of time; and the applicant or applicants warrant that the specified deficiencies will be corrected within that period;
4. (4) a finding by the department that the facility has failed to comply with the rules and regulations set forth in this Part;

5. (5) a finding by the department that any individual having a direct or indirect interest in the facility operation or business, or the manager or administrator of such facility is not of the requisite good moral character:

   1. (i) no application for registration shall be denied solely on the basis that an individual has been convicted of a crime without consideration having been given to:

      1. (a) the public policy of the State to encourage the licensure and employment of persons previously convicted of one or more criminal offenses;
      2. (b) the specific duties and responsibilities necessarily related to the operation of a shared health facility;
      3. (c) the bearing, if any, the criminal offense or offenses for which the person was previously convicted will have on his fitness or ability to perform one or more of such duties and responsibilities;
      4. (d) the time which has elapsed since the occurrence of the criminal offense or offenses;
      5. (e) the age of the person at the time of occurrence of the criminal offense or offenses;
      6. (f) the seriousness of the offense or offenses;
      7. (g) any information produced by the person, or produced on his behalf, in regard to his rehabilitation and good conduct; and
      8. (h) the legitimate interest of the department in preventing abuses in shared health facilities and in ensuring the quality, continuity and coordination of medical care provided in such facilities.
   2. (ii) In making a determination as to the moral character of any such person, the department shall also give consideration to a certificate of relief from disabilities or a certificate of good conduct issued to such person, which certificate shall create a presumption of rehabilitation in regard to the offense or offenses specified therein.

(b) Upon denial of an application for registration, the applicant will be notified by the department of the denial, the basis for the denial, and will be afforded an opportunity for a hearing. A request for a hearing must be made within 15 days of the notice of denial. All hearings under this section will be conducted in accordance with the procedures set forth in paragraphs (2) and (3) of this subdivision:

1. (1) The registration of a shared health facility shall be suspended or revoked, pursuant to a hearing as further described in paragraphs (2) and (3) of this subdivision; provided, however, that a registration may be suspended or limited for a period not in excess of 30 days upon written notice to the shared health facility operator following a determination by the commissioner that the public health or safety is in imminent danger.
2. (2) A notice of hearing which sets forth the time, place and nature of the hearing; the legal authority and jurisdiction under which the hearing is to be held; a reference to the particular sections of the statutes and rules involved; and a short and plain statement of the matters asserted shall be served in person or mailed by certified mail to the facility at least 21 days before the date fixed for the hearing. The shared health facility shall file with the department, not less than eight days prior to the hearing, a written answer to the charges.
3. (3) Hearings shall be conducted in accordance with section 12-a of the Public Health Law and pursuant to the provisions of the State Administrative Procedure Act by the commissioner or by a hearing officer appointed by the commissioner. The hearing officer shall not determine, but shall submit his report to the commissioner setting forth his findings of facts, his conclusions and his recommendations.
4. (4) Final appropriate action shall be taken upon waiver of the right to a hearing by the shared health facility operator or upon failure by the operator of a shared health facility to appear at a hearing
5. (5) All orders or determinations hereunder shall be subject to review as provided in article 78 of the Civil Practice Law and Rules. Application for such review must be made within 60 days after service in person or by certified mail of a copy of the order or determination upon the applicant.
6. (6) Any shared health facility provider or purveyor who violates any provision of article 47 of the Public Health Law pertaining to shared health facilities or of this Part may, subject to the review and hearing procedures specified in 18 NYCRR Part 515, be barred from collecting any payments under the program from the date such violation occurs.