902 KAR 20:014. Effect of previous denial or revocation on applications for a license to operate a health facility.

 

      RELATES TO: KRS 216.2925, 216B.010, 216B.015, 216B.040, 216B.042, 216B.045, 216B.050, 216B.055, 216B.105, 216B.115, 216B.120, 216B.125

      STATUTORY AUTHORITY: KRS 216B.042(1)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 216B.042(1) requires the Cabinet for Health Services to regulate the licensure of health facilities. This administrative regulation establishes a prohibition on the licensing of health facilities that are owned, all or in part, by entities that have held a significant financial interest in a health facility that has had its license to operate revoked or denied within the previous five (5) years.

 

      Section 1. Definitions. (1) "Applicant" is defined by KRS 216B.015.

      (2) "Cabinet" is defined by KRS 216B.015.

      (3) "Good standing" means a health care facility that is in substantial compliance with applicable administrative regulations and which is otherwise eligible for relicensure.

      (4) "Significant financial interest" means lawful ownership of a health care facility, whether by share, contribution, or otherwise, in an amount equal to or greater than twenty-five (25) percent of total ownership of the health care facility.

 

      Section 2. Requirement to Disclose Ownership of a Health Facility. (1) Each applicant for a license or relicensure shall disclose the name, address, and telephone number of each individual, shareholder, or legal entity, including but not limited to, corporation, limited liability company, limited partnership, or partnership having a significant financial interest in the health care facility.

      (2) The licensee of a Kentucky health care facility shall immediately inform the Cabinet for Health Services, in writing, of the name, address, and telephone number of any individual, shareholder, or legal entity, including but not limited to corporation, limited liability company, limited partnership, or partnership that acquires a significant financial interest in the health care facility.

 

      Section 3. Effect of Previous License Revocation or Denial on the Issuance of a License to Operate a Health Facility. (1) The Cabinet for Health Services shall not issue a new health facility license to any individual, partnership, corporation, or legal entity, however named, that holds or previously held a significant financial interest in a Kentucky licensed health care facility that had its license denied or revoked within the five (5) year period preceding the filing of the application. This section shall not prohibit annual relicensure of any other existing facility owned or operated by the individual, partnership, corporation, or legal entity that was in operation and in good standing on the date of the final administrative order denying or revoking the license.

      (2) An individual, shareholder, or legal entity shall not acquire a significant financial interest in any licensed health care facility if that individual, shareholder, or legal entity previously held a significant financial interest in a Kentucky licensed health care facility that had its license denied or revoked within the preceding five (5) year period.

      (3) Failure of the facility or any individual or legal entity operating the facility to comply with any provision in this section or Sections 1 or 2 of this administrative regulation may result in denial or revocation of existing Kentucky health facility licenses owned or operated by the individual or legal entity.

 

      Section 4. Hearings. A health care facility or applicant dissatisfied with a decision to deny or revoke a license under Section 3 of this administrative regulation may file a written request for a hearing with the Secretary of the Cabinet for Health Services. The request shall be received by the secretary of the cabinet within twenty (20) days of the date the health care facility or applicant receives notice of the decision to deny or revoke the license. Hearings under this section shall be conducted in accordance with KRS 216B.040 and 900 KAR 6:040. (30 Ky.R. 180; Am. 612; eff. 8-20-2003.)