(a) The governing authority of the agency shall be responsible for the management, operation and evaluation of the agency and shall:

1. (1) ensure compliance of the agency with the applicable Federal, State and local statutes, rules and regulations;

2. (2) ensure adequate personnel resources to:

   1. (i) effectively conduct administrative functions of the agency; and
   2. (ii) provide care in the home, based on the needs of the persons served as specified in the plan of care;
3. (3) adopt the agency's budget, control assets and funds, and provide for annual fiscal audits;
4. (4) prohibit personnel paid directly by the agency from being reimbursed by any party other than the agency for services provided by the agency;
5. (5) prohibit the splitting or sharing of fees between a referral agency, facility, individual or other home care services agency and the agency;
6. (6) adopt and amend policies regarding management and operation of the agency and the provision of patient care services;
7. (7) enter into agreements and contracts, where applicable, to provide agency services or to assure services needed by the agency;

8. (8) ensure the development and implementation of a patient complaint procedure to include:

   1. (i) documentation of receipt, investigation and resolution of any complaint, including maintenance of a complaint log indicating the dates of receipt and resolution of all complaints received by the agency;

   2. (ii) review of each complaint, with a written response to all written complaints or oral complaints, if requested by the individual making the oral complaint, to be provided within 15 days of receipt of such complaint:

      1. (a) describing the complaint investigation findings and the decisions rendered to date by the agency; and
      2. (b) advising the complainant of the right to appeal the outcome of the agency's complaint investigation and the appeal procedure to be followed;
   3. (iii) an appeals process with review by a member or committee of the governing authority within 30 days of receipt of the appeal; and
   4. (iv) notification to the patient or his or her designee that if the patient is not satisfied by the agency's response, the patient may complain to the Department of Health's Office of Health Systems Management;
9. (9) provide an office facility or facilities equipped and sufficient in size to permit efficient conduct of business, including access to patient records by all personnel providing care and prompt telephone contact to and from patients, referral agencies or facilities, and other home care services agencies;
10. (10) ensure the development of a written emergency plan which is current and includes procedures to be followed to assure health care needs of patients continue to be met in emergencies which interfere with delivery of services and orientation of all employees to their responsibilities in carrying out such a plan;
11. (11) for certified home health agencies only, ensure the provision of charity care in each fiscal year of the agency in an amount no less than two percent of the total operating costs of the agency in that fiscal year for not-for-profit and for-profit agencies and agencies operated by public benefit corporations and three and one-third percent of total operating costs of the agency for public agencies. Charity care is care provided at no charge or reduced charge for the services the agency is certified to provide to patients who are unable to pay full charges, are not eligible for covered benefits under title XVIII or XIX of the Social Security Act, are not covered by private insurance, and whose household income is less than 200 percent of the Federal poverty level. Adjustments to the required percentages of charity care may be made by the department upon recommendation of the appropriate health systems agency to reflect significant county variations from the state average with respect to the proportion of indigent and medically uninsured persons to the total population;
12. (12) ensure continuous quality improvement initiatives, by establishing and maintaining a coordinated quality assessment and assurance program which integrates the review activities of all home care services provided by the agency to enhance the quality of care and treatment. Quality improvement shall be the responsibility of all personnel, at every level, at all times. Supervisory personnel alone cannot ensure quality of care and services. Such quality must be part of each individual's approach to his or her daily responsibilities; and

13. (13) appoint a group of professional personnel, which includes one or more physicians, registered professional nurses, and representatives of the professional therapeutic services provided by the agency to perform the activities required in subparagraph (ii) of this paragraph. The findings and recommendations of this group shall be integrated into the agency's quality assessment and assurance program described in paragraph (12) of this subdivision:

    1. (i) at least one member of the group shall be neither an owner nor an employee compensated by the agency;

    2. (ii) the group of professional personnel shall participate in the annual evaluation of the agency's program and shall meet at least quarterly to:

       1. (a) review policies pertaining to the delivery of the health care and services provided by the agency and, when revisions are indicated, recommend such policies to the governing authority for adoption;
       2. (b) make recommendations to the governing authority on professional issues, including the adequacy and appropriateness of services based on an assessment of health care resources in the community, patients' needs, available reimbursement mechanisms and availability of qualified personnel;
       3. (c) assist the agency in maintaining liaison with other health care providers in the community; and
       4. (d) review a sample of both active and closed clinical records to determine whether established policies are followed in furnishing services directly or under arrangement; and

14. (14) ensure that, at least annually, an overall evaluation of the agency's program is conducted;

    1. (i) such evaluation shall be conducted by all of the following:

       1. (a) the group of professional personnel (or a committee thereof) as described in paragraph (13) of this subdivision;
       2. (b) agency personnel; and
       3. (c) consumers or other professional persons outside the agency working in conjunction with consumers;

    2. (ii) such evaluation shall include but not be limited to:

       1. (a) an overall policy and administrative review to include the extent to which the agency:

          1. (1) meets service area needs, including underserved geographic areas;
          2. (2) meets the needs of special populations, including persons with intense service needs; mentally, cognitively or physically disabled persons, and financially indigent persons; and
          3. (3) coordinates patient care services with services provided by other community agencies and organizations; and
       2. (b) a review of the results and outcomes of the clinical record review as specified in clause (13)(ii)(d) of this subdivision.

(b) To assist the governing authority with executing the responsibilities specified in subdivision (a) of this section, the governing authority shall:

1. (1) appoint an administrator responsible for the day-to-day management of the agency;

   1. (i) the administrator, who may also be the supervising physician or registered nurse, as specified in paragraph (2) of this subdivision, shall be responsible for the organization and direction of the agency's ongoing functions through, but not limited to:

      1. (a) implementation of an effective budgeting and accounting system;
      2. (b) determination of the number and types of personnel needed to meet the agency's responsibilities and recruitment of qualified personnel;
      3. (c) ensuring a planned orientation of new personnel and provision for appropriate, regularly scheduled in-service education related to personnel responsibilities;
      4. (d) ensuring an annual evaluation of personnel performance;
      5. (e) maintenance of ongoing liaison among the governing authority, the group of professional personnel appointed as specified in paragraph (a)(13) of this section, and agency personnel; and
      6. (f) ensuring availability of public information concerning the health care services which the agency provides, the geographic area in which these services are made available, the charges for the various types of services and the payment sources which may be available to pay for such services;
   2. (ii) for long term home health care programs or AIDS home care programs, administrative responsibilities may be assumed by the administrator of the sponsoring certified home health agency, hospital or nursing home;
2. (2) employ a director of patient services on a full-time or part-time basis who is responsible for clinical direction and supervision of patient care services. This person, or a qualified alternate, shall be available at all times during operating hours and shall participate in all activities relevant to the professional services furnished, including development of qualifications and the assignment of personnel; and
3. (3) delineate in writing the organizational lines of responsibility and accountability of the administrator, the supervising community health nurse or physician, the group of professional personnel appointed as specified in paragraph (a)(13) of this section, other committees and agency personnel.

(c) Except when a management contract has been approved pursuant to this section, the governing authority may not delegate its responsibility for the operation of the agency to another organization, a parent or subsidiary corporation or through a managing authority contract. An improper delegation may be found to exist where the governing authority no longer retains authority over the operation and management of the agency, including but not limited to such areas as:

1. (1) authority to hire or fire the administrator;
2. (2) authority for the maintenance and control of the books and records;
3. (3) authority over the disposition of assets and the incurring of liabilities on behalf of the agency; or
4. (4) authority over the adoption and enforcement of policies regarding the operation of the agency.

(d) If the governing authority enters into a management contract, the requirements of this subdivision shall be met.

1. (1) For the purpose of this section, a management contract is an agreement between an agency's governing authority and a managing authority for the purpose of managing the day-to-day operation of the agency of any portion thereof.

2. (2) Management contracts shall be effective only with the prior written consent of the commissioner, and shall include the following:

   1. (i) a description of the proposed roles of the governing authority and managing authority during the period of the proposed management contract. The description shall clearly reflect retention by the governing authority of ongoing responsibility for statutory and regulatory compliance;
   2. (ii) a provision that clearly recognizes that the responsibilities of the agency's governing authority are in no way obviated by entering into the management contract, and that any powers not specifically delegated to the managing authority through the provisions of the contract remain with the governing authority;
   3. (iii) a clear acknowledgement of the authority of the commissioner to void the contract pursuant to paragraph (9) of this subdivision;
   4. (iv) a plan for assuring maintenance of the fiscal stability, the level of service provided and the quality of care rendered by the agency during the term of the management contract;
   5. (v) an acknowledgement that the costs of the contract are subject to all applicable provisions of Part 86 of this Title;
   6. (vi) a requirement that the reports described in paragraph (10) of this subdivision will be provided to the department and to the governing authority annually for the term of the management contract;
   7. (vii) an express representation that any management contract approved by the commissioner is the sole agreement between the managing authority and the governing authority for the purpose of managing the day-to-day operation of the agency or any portion thereof, and that any amendments or revisions to the management contract shall be effective only with the prior written consent of the commissioner; and
   8. (viii) a provision that includes the terms of paragraph (8) of this subdivision.

3. (3) No management contract shall be approved if the governing authority does not retain sufficient authority and control to discharge its responsibility as the certified operator. The following elements of control shall not be delegated to a managing authority:

   1. (i) direct independent authority to hire or fire the administrator;
   2. (ii) independent control of the books and records;
   3. (iii) authority over the disposition of assets and the authority to incur on behalf of the agency liabilities not normally associated with the day-to-day operation of an agency; and
   4. (iv) independent adoption of policies affecting the deliyery of health care services.

4. (4) In addition to a proposed written contract complying with the provisions of paragraph (2) of this subdivision, a governing authority seeking to enter into a management contract shall submit to the department, at least 60 days prior to the intended effective date, unless a shorter period is approved by the commissioner due to extraordinary circumstances, the following:

   1. (i) documentation indicating that the proposed managing authority holds all necessary approvals to do business in New York State;
   2. (ii) documentation of the goals and objectives of the management contract, including a mechanism for periodic evaluation of the effectiveness of the arrangement in meeting these goals and objectives;
   3. (iii) evidence of the managing authority's financial stability;
   4. (iv) information necessary to determine that the character and competence of the proposed managing authority, and its principals, officers and directors, are satisfactory, including evidence that all agencies or health care facilities managed or operated, in or outside of New York State, have provided a high level of care; and
   5. (v) evidence that it is financially feasible for the agency to enter into the proposed management contract, recognizing that the costs of the contract are subject to all applicable provisions of Part 86 of this Title.
5. (5) During the period between an agency's submission of a request for approval of a management contract and disposition of that request, an agency may not enter into any arrangement for management contract services other than a written interim consultative agreement with the proposed managing authority. Any interim agreement shall reflect consistency with the provisions of this section, and shall be submitted to the department no later than five days after its effective date.

6. (6) The term of a management contract shall be limited to three years and may be renewed only when authorized by the commissioner, provided compliance with this section and the following provisions can be demonstrated:

   1. (i) that the goals and objectives of the contract have been met within specified timeframes;
   2. (ii) that the quality of care provided by the agency during the term of the contract has been maintained or has improved; and
   3. (iii) that the reporting requirements contained in paragraph (10) of this subdivision have been met.
7. (7) Any application for renewal shall be submitted at least 90 days prior to the expiration of the existing contract.
8. (8) An agency's governing authority shall, within the terms of the contract, retain the authority to discharge the managing authority and its employees from their positions at the agency with or without cause on not more than 90 days' notice. In such event, the agency shall notify the department in writing at the time the managing authority is notified. The agency's governing authority shall provide a plan for the operation of the agency subsequent to the discharge, to be submitted with the notification to the department.
9. (9) A management contract shall terminate and be deemed cancelled, without financial penalty to the governing authority, not more than 60 days after notification to the parties by the department of a determination that the management of the agency is so deficient that the health and safety of patients would be threatened by continuation of the contract.

10. (10) Each managing authority shall submit annual reports to the department and the governing authority providing measurements of agency performance in the following areas:

    1. (i) financial operations, including a balance sheet, any change in financial position, and a statement of revenues and expenses sufficient to determine liquidity, working capital, net operating margin and age, extent and type of payables and receivables;
    2. (ii) personnel; and

    3. (iii) services delivered.

       (e) Franchise agreements.

11. (1) For purposes of this subdivision, a franchise agreement means a contract or agreement between an agency's governing authority (franchisee) and a franchisor by which:

    1. (i) the governing authority is granted the right to engage in the business of offering home care services under a marketing plan or system developed in substantial part by a franchisor, and the governing authority is required to pay, directly or indirectly, a franchise fee; or
    2. (ii) the governing authority is granted the right to engage in the business of offering home care services associated substantially with the franchisor's trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate, and the governing authority is required to pay, directly or indirectly, a franchise fee.

12. (2) A governing authority may enter into a franchise agreement if the requirements of this subdivision are met. A franchise agreement which has been approved by the department prior to the effective date of this subdivision need not be amended further in order to meet the specific requirements of this subdivision. A franchise agreement entered into on or after the effective date of this subdivision shall be effective only with the prior written consent of the commissioner. A governing authority seeking to enter into a franchise agreement shall submit to the department a copy of the proposed agreement complying with the provisions of this section at least 60 days prior to the intended effective date, unless a shorter period is approved by the commissioner due to extraordinary circumstances. The department shall review proposals expeditiously and shall notify the governing authority of any changes that must be made. Such agreements shall include the following:

    1. (i) a description of the proposed roles of the governing authority and franchisor during the period of the proposed agreement. The description shall reflect clearly the governing authority's ongoing responsibility for the operation and management of the agency and for compliance with all statutory and regulatory requirements;
    2. (ii) a provision which recognizes clearly that the responsibilities of the agency's governing authority are in no way lessened by entering into the agreement and that the governing authority has full legal authority over the operation and management of the agency, and that the governing authority retains the right and authority to independently adopt, amend and implement policies and procedures regarding the operation of the agency in order to ensure the provision of quality home care services and that the agency is operated in compliance with all applicable statutes and regulations;
    3. (iii) a provision which recognizes that the policies, standards, procedures, manuals and other documents developed by the franchisor which relate to the operating standards, policies and procedures for the agency shall be available for inspection and copying by the department in accordance with the department's statutory and regulatory authority. Such documents, when received by the department, shall be subject to the relevant provisions of the Freedom of Information Law including, if applicable, provisions relating to excepting from disclosure documents which are trade secrets or are maintained for the regulation of commercial enterprise which if disclosed would cause substantial injury to the competitive position of the subject enterprise; and
    4. (iv) an express representation that any franchise agreement approved by the commissioner is the sole franchise agreement between the franchisor and the governing authority for the agency, or any portion thereof, relating to the geographic service area that is covered by the franchise agreement.

13. (3) A franchise agreement shall not be approved if the governing authority does not retain sufficient authority and control to discharge its responsibilities as the agency operator. The following elements of control shall not be delegated to a franchisor:

    1. (i) authority to hire or fire agency personnel;
    2. (ii) control of the agency's books and records;
    3. (iii) authority over the disposition of assets or the authority to incur liabilities on behalf of the agency; and
    4. (iv) sole authority for the independent adoption of policies and procedures affecting the delivery of health care services. Although the governing authority may agree to adopt and utilize policies and procedures developed by the franchisor, the governing authority must retain authority to independently adopt, amend and implement policies and procedures regarding the operation of the agency in order to ensure the provision of quality home care services and that the agency is operated in compliance with all applicable statutes and regulations.

14. (4) An agreement which contains elements of both a franchise agreement and a management contract shall be subject to the applicable provisions of this subdivision and subdivisions (c) and (d) of this section.

    (f) Health provider network access and reporting requirements.

    The governing authority of an agency shall obtain from the department's health provider network (HPN), HPN accounts for each agency it operates and ensure that sufficient, knowledgeable staff will be available to and shall maintain and keep current such accounts. At a minimum, 24-hour, seven-day-a-week contacts for emergency communication and alerts, must be designated by each agency in the HPN communications directory. A policy defining the agency's HPN coverage consistent with the agency's hours of operation shall be created and reviewed by the agency no less than annually. Maintenance of each agency's HPN accounts shall consist of, at a minimum, the following:

15. (1) sufficient designation of the facility's HPN coordinator(s) to allow for HPN individual user application;
16. (2) designation by the governing authority of an agency of sufficient staff users of the HPN accounts to ensure rapid response to requests for information by the State and/or local Department of Health;
17. (3) adherence to the requirements of the HPN user contract; and
18. (4) current and complete updates to the communications directory reflecting changes that include, but are not limited to, general information and personnel role changes as soon as they occur, and at a minimum, on a monthly basis.