In late 2023, the New York State Office of Mental Health (OMH) began the process of amending 14 NYCRR Part 551, the set of regulations governing the licensing or certification process for OMH providers. One requirement prior to the promulgation of new or amended regulations is review and approval by the Behavioral Health Services Advisory Council (BHSAC), and on December 6, 2023, staff from OMH presented the amendments to the council’s Regulations Committee.
The draft regulation was submitted to the council in the form of a markup of the current regulation. A brief presentation by OMH staff touched on the major changes to the regulation that were being proposed, and the committee appeared to vote to approve moving the amended regulation forward to consideration by the full council.
On April 10, 2024, the OMH posted a proposed action in the State Register1 related to Part 551—but something had changed. Instead of promulgating the proposed amendment discussed above, the agency moved to repeal the current regulation and replace it with an entirely new regulation. A side-by-side comparison of the original regulation and proposed one revealed not a wholesale revision but specific language changes seeking to eliminate ambiguous or outdated wording and more clearly align with current practices. While there remains some uncertainty with respect to what will ultimately be promulgated as the new regulations, providers are reasonably concerned about program impact. A general understanding of the OMH’s intentions in updating the regulations can be gained by viewing the archived video of the BHSAC Regulations Committee meeting where the changes were discussed.2,3 The following is a summary of the changes addressed by OMH staff at that meeting:
- Language will be amended to allow the OMH to assign an application a lower level of review than what might otherwise be required by the regulations. It is unclear what standard will be applied when the agency is determining whether this lower level of review will be assigned, whether there will be public notice components to that action, whether a provider can request the lower level of review, etc. Moreover, this type of change would obviate the review and approval function the local government as well as the BHSAC in some cases.
- Changes are made to the process applicable to capital projects, and the proposal is that all of these projects require the medium level of review. While this does promise clarity and a more uniform process for providers, there are some potential consequences. It would eliminate the BHSAC’s opportunity to review certain proposed projects. It may also conflict with the provisions of Section 5.06 of New York’s Mental Hygiene Law that require BHSAC review of certain construction projects and the establishment of every new provider. These obligations are statutory and cannot be eliminated by regulatory amendment.
- The language was changed to clarify approval requirements for corporate governance changes, largely bringing the regulation in line with current practice.
- Language was added to clarify the process for programs that are closing, largely bringing the regulation in line with current practice.
- Language was added to simplify the process for initiating the application process.
- Language was added stating that OMH “may” require an applicant to submit a memorandum of understanding (MOU) in situations where the program will be “hosted” by a different program. This language leaves many questions unanswered, regarding the MOU process, and we suspect further guidance would need to be provided.
- The language was amended to give the agency the authority to “withdraw” an application in certain circumstances. Similar language can be found in the current regulations related to timeframes for submission of application-related materials and information. In this context “withdrawal” is a synonym for “denial,” but without the otherwise guaranteed due process rights. The regulations limit the OMH to approving, conditionally approving, or denying an application. More importantly, the underlying statute, Section 31.05(b) of the New York Mental Hygiene Law states:
The commissioner may disapprove an application for an operating certificate, may authorize fewer services than applied for, and may place such limitations and conditions on the operating certificate as he deems desirable. In such case he shall afford the applicant an opportunity to be heard and such hearing shall be public, if so requested by the applicant.
Since the OMH is moving to repeal and replace rather than amend the current regulations, the BHSAC’s review and approval process must begin again. The public comment period for the new regulations ended in June 2024, and may result in additional changes to the proposed language.
Barclay Damon’s Health & Human Services Team will monitor any changes and provide further updates. A webinar about the OMH licensing process is scheduled for Wednesday, October 23, 2024, at 10:00 a.m. For more information and to register, click here.
If you have any questions regarding the content of this alert, please contact Keith Brennan, of counsel, at kbrennan@barclaydamon.com, or another member of the firm’s Health & Human Services Providers or Health Care Controversies Teams.
1New York State Register, Volume XLVI, Issue 15, page 16. The State Register is available at State Register | Department of State (ny.gov).
2Typically, repeal-and-replace efforts signal an agency’s reimagining of the scope or objectives of a regulation, and often indicate changes at the structural level.
3The meetings are hosted jointly by the New York State Office for Addiction Services and Supports (OASAS) and OMH, and the OMH portion of the video begins at about the 1:10 mark. The video is a good example of the council’s deliberative process, and the genuine commitment to quality improvement on the part of council members and OMH staff. The video also contains a discussion of proposed inpatient regulatory changes and is a rare occasion on which the council failed to approve the proposed changes but provided feedback regarding what were considered additional necessary changes.