(a) General hospitals, hereinafter referred to as hospitals, shall comply with all of the requirements of this Part:

1. (1) hospitals shall comply with construction standards contained in Article 2 of Subchapter C of this Chapter (Medical Facility Construction); and
2. (2) the commissioner may accept as evidence of compliance with the minimum operational standards of this Part, accreditation by an accreditation agency to which the Centers for Medicare and Medicaid Services has granted deeming status and which the commissioner has determined has accrediting standards sufficient to assure the commissioner that hospitals so accredited are in compliance with such operational standards. The commissioner can choose to enter into collaborative agreements with such accreditation agencies so that the accreditation agency’s accreditation survey can be used in lieu of a departmental survey. A list of accreditation agencies with which the department has a collaborative agreement will be posted on the department's website. Hospitals shall notify the commissioner in writing within seven days after receipt of notice of failure to be accredited, re-accredited or the loss of accreditation by the accreditation agency.

(c) Any person, partnership, stockholder, corporation or other entity with the authority to operate a hospital must be approved for establishment by the Public Health Council unless otherwise permitted to operate by the Public Health Law or as provided for by section 405.3 of this Part. For the purposes of this Part, a person, partnership, stockholder, corporation or other entity is an operator of a hospital if it has the decision-making authority over any of the following:

1. (1) appointment or dismissal of hospital management-level employees and medical staff, except the election or removal of corporate officers by the members of a not-for-profit corporation;
2. (2) approval of hospital operating and capital budgets;
3. (3) adoption or approval of hospital operating policies and procedures;
4. (4) approval of certificate of need applications filed by or on behalf of the hospital;
5. (5) approval of hospital debt necessary to finance the cost of compliance with operational or physical plant standards required by law;
6. (6) approval of hospital contracts for management or for clinical services; and
7. (7) approval of settlements of administrative proceedings or litigation to which the hospital is party, except approval by the members of a not-for-profit corporation of settlements of litigation that exceed insurance coverage or any applicable self-insurance fund.