TITLE XI
HOSPITALS AND SANITARIA

Chapter 151-H
RECEIVERSHIP OF NURSING HOMES AND OTHER RESIDENTIAL CARE FACILITIES

Section 151-H:1

    151-H:1 Definitions. –
In this chapter:
I. "Administrator" means any individual who is charged with the general administration of a facility, as defined in RSA 151-H:1, V, whether or not such individual has an ownership interest in such facility and whether or not such individual's functions and duties are shared with one or more other individuals.
II. "Commissioner" means the commissioner of the department of health and human services.
III. "Department" means the department of health and human services.
IV. "Emergency" means a situation or condition which presents imminent danger of death or serious physical harm to residents, including but not limited to, imminent or actual abandonment of an occupied facility, and excluding a crisis due solely to a natural disaster beyond the control of the licensee where the licensee is taking appropriate remedial steps. An organized labor activity conducted for union recognition or as a tactic in contract negotiations shall not, of itself, constitute an emergency. Voluntary withdrawal from participation as a provider of services under the Medicaid program, established under Title XIX of the Social Security Act, or under the Medicare program established under Title XVIII of the Social Security Act where such withdrawal was not occasioned by the denial of certification to the facility, shall not, of itself, constitute an "emergency."
V. "Facility" means any nursing home or other residential care facility subject to licensing under RSA 151:2.
VI. "Licensee" means any person or entity issued a license by the department to establish, conduct, or maintain a facility under RSA 151:2.
VII. "Owner" means any person or entity that has a direct and tangible ownership interest in the facility or the real property that the facility is located upon or any other proprietary interest recognized under law.
VIII. "Resident" means an individual who resides in a facility as defined in RSA 151-H:1, V.

Source. 2012, 162:1, eff. June 7, 2012.

Section 151-H:2

    151-H:2 Appointment of Receiver. – The superior court, upon petition of the department, as hereinafter provided, may appoint a receiver for any facility; provided, that the court finds upon clear and convincing evidence that the health, safety, or welfare of the residents cannot be adequately assured without the appointment of a receiver and either that an emergency exists that the licensee is either unwilling or unable to remedy, or that the facility is operating without a valid license.

Source. 2012, 162:1, eff. June 7, 2012.

Section 151-H:3

    151-H:3 Action to Appoint Receiver; Hearing; Purpose of Receivership. –
I. The department may petition the court for the appointment of a receiver, after notification to the governor and the attorney general, requesting the appointment of a receiver to operate a facility. Before the department files such a petition, the commissioner shall consult with a facility administrator. The administrator shall have appropriate experience as a nursing home or other residential care facility administrator and shall have no financial ties or affiliation with the facility that is the subject of the proposed receivership. When the petition concerns a nursing home, the administrator shall be chosen from a list provided by the New Hampshire Health Care Association. The administrator may submit his or her recommendations concerning the facility proposed for receivership within 2 business days after receiving all relevant information from the commissioner. The consulting administrator shall be immune from any damages action arising out of these recommendations. After the 2-day period, the department, in its sole discretion may file a petition with the court. Nothing in this chapter shall be construed as abrogating or superseding any common law or statutory right of any person to bring an action requesting appointment of a receiver to operate a facility.
II. The court shall immediately issue a summons and set the matter for hearing not less than 5 days and not more than 14 days after filing of the action. The petition and notice of the hearing shall be served on the licensee, the owner or owners, and the administrator not less than 3 days before the date of the hearing, unless a different period is specified by the court. A receiver may be appointed immediately, on an ex parte basis, if the court renders written findings of fact and conclusions of law that clear and convincing evidence exists, based upon a petition filed by the department with supporting affidavit, that there are legally sufficient grounds for the appointment of a receiver in that an immediate appointment is necessary to prevent immediate, irreparable harm to the residents, and that there are no adequate remedies available at law. The licensee, the owner or owners, and the administrator shall be given prior notice of the ex parte hearing unless such notice is impossible given exigent circumstances for the health, safety, or welfare of the residents or if, after exercising all reasonable means, the department is unable to locate the licensee, the owner or owners, and or the administrator. If a receiver is appointed on an ex parte basis, service shall be made on the responding parties and a hearing held within 5 days of the date the order was issued.
III. The court shall appoint as a receiver any person appearing on a list of names maintained by the commissioner. The list for purposes of receiverships involving nursing homes shall be established by the New Hampshire Health Care Association and provided to the commissioner. If those persons are unwilling or unable to serve, the commissioner may provide other appropriate candidates' names to the court. Persons appearing on any such list shall have experience in the delivery of health care services, and, if feasible, shall have experience with the operation of long-term care facilities. A receiver shall not have a financial interest in or any affiliation with the facility that is the subject of the receivership.
IV. The purpose of a receivership created under this section shall be to safeguard the health, safety, and continuity of care to residents and to protect them from the adverse health effects and increased risk of death caused by abrupt or unsuitable transfer of residents. A receiver appointed under this section shall not take any actions or assume any responsibilities inconsistent with this purpose.
V. No person shall impede the operation of a receivership created under this section. There shall be an automatic stay for a 60-day period subsequent to the appointment of a receiver, of any action that would interfere with the functioning of the facility, including but not limited to cancellation of insurance policies executed by the licensee, termination of utility services, attachments or set-offs of resident trust funds and working capital accounts, and repossession of equipment used in the facility.

Source. 2012, 162:1, eff. June 7, 2012. 2014, 204:8, eff. July 11, 2014.

Section 151-H:4

    151-H:4 Authority of Receiver; Duties. –
I. When a receiver is appointed, the licensee shall be divested of possession and control of the facility in favor of the receiver. The receiver shall have the same rights to possession of the building in which the facility is located and to all goods and fixtures in the building at the time the petition for receivership is filed as the licensee would have had if the receiver had not been appointed. The receiver shall take such action as is reasonably necessary to preserve the property or assets of the residents, the owner or owners, and the licensee, and may use them only in the performance of the receiver's powers and duties set forth in this section and by order of the court.
II. With the approval of the court, the receiver shall have authority to remedy violations of federal and state law and regulations governing the operation of the facility; to hire, direct, manage, and discharge any consultant or employees, including the administrator of the facility; to receive and expend in a reasonable and prudent manner the revenues of the facility; to continue the business of the facility and the care of the residents; to perform those acts necessary or desirable to accomplish the purpose of the receivership; to perform regular accountings and make periodic reports to the court; and to exercise such additional powers and perform such additional duties, as the court may deem appropriate.
III. The receiver shall apply the current revenues of the facility to current operating expenses and, subject to the following provisions, to debts incurred by the licensee prior to the appointment of the receiver. The receiver shall motion the court for a ruling on the treatment of debts incurred prior to this appointment where such debts appear extraordinary, of questionable validity, or unrelated to the normal and expected maintenance and operation of the facility, or where payment of such debts will interfere with the purposes of the receivership. Priority shall be given by the receiver to expenditures for current, direct resident care, including nursing care, medications, social services, dietary services, and housekeeping.
IV. Revenues held by or owing to the receiver in connection with the operation of the facility shall be exempt from attachment and trustee process. Any retroactive payment that may be due or owing to the facility as the result of a retroactive rate adjustment shall be disposed of in accordance with the orders of the court as provided in paragraph III of this section, after consideration of competing claims to said payments.
V. The receiver may make repairs to the facility but only to the extent necessary to prevent or remove jeopardy to the health, safety, or welfare of the residents or to minimally qualify the facility for continuing participation in the Medicaid program, established under Title XIX of the Social Security Act, or in the Medicare program, under Title XVIII of the Social Security Act; provided that the total cost of repair does not exceed $3,000. Expenditures for this purpose in excess of $3,000 may be made by agreement of all parties or upon order of the court after motion by the receiver.
VI. In the event that the facility does not have sufficient capital for major repairs or improvements, the receiver may petition the court for permission to apply to the department for a loan through the department's civil monetary penalty fund. Notice shall be given to the licensee, the owner or owners, the administrator, the department, and to any mortgagee and other secured parties and lienholders of record. After a hearing on the merits, the court shall authorize the receiver to apply for such assistance if it determines by clear and convincing evidence, and after certification from the commissioner, that the repair or improvement is necessary to prevent or remove jeopardy to residents or to minimally qualify the facility for participation in the Medicaid or Medicare program; or it determines that the repair or improvement is necessary to prevent jeopardy to residents for the limited period of time that they are awaiting transfer of the residents. The purposes of this paragraph shall be to protect residents and to continue the viable operations of the facility. This paragraph shall not be used as a method of financing major repairs or capital improvements to facilities which have been abandoned because the licensee has been unable to secure financing by conventional means. Upon court approval, application for financial assistance shall be made to the department, which shall administer such funds as the legislature may appropriate for this purpose. The court may set a reasonable rate of interest to be paid by the receiver to the department. In no case shall funds advanced by the department under this paragraph exceed funds available in the department's civil monetary penalty fund.
VII. The licensee, the owner or owners, or the administrator may motion the court to determine the reasonableness of any expenditure by the receiver.
VIII. The receivership shall be reviewed after 30, 60, and 90 days by the court. The court shall schedule a status hearing at each of the aforementioned intervals unless waived in writing by all of the parties to the action. In any event, at each interval, the receiver shall make a written report to the court with a copy of the report to be provided to the licensee, owner or owners, administrator and the department. The report shall provide detailed information regarding the operational and financial status of the facility and a status report on the projection for termination of the receivership on or before 90 days from the initial appointment of the receiver as set forth in RSA 151-H:8.

Source. 2012, 162:1, eff. June 7, 2012.

Section 151-H:5

    151-H:5 Leases, Mortgages or Secured Transactions. –
I. During the period of receivership, a receiver shall honor any lease, mortgage, or agreement granting security interests entered into by the licensee, owner or owners, or administrator, unless the court:
(a) Makes a determination in writing, upon the filing of a motion by the receiver to avoid any such lease, mortgage or security agreement and a hearing at which interested persons are allowed to participate, that based on clear and convincing evidence presented by the receiver that the lessor, lender, or secured party entered into such agreement with the licensee, the owner or owners, or the administrator for a fraudulent purpose or to hinder or delay creditors or the agreement is unrelated to the operation of the facility; and
(b) Orders the receiver to avoid such agreement. The court shall hold a hearing on any such motion within 15 days of the date of filing. At least 10 days prior to the hearing, the receiver shall provide a copy of the motion to the licensee, owner or owners, administrator, lessees, mortgagees, secured parties, and lienholder of record of the property.
II. If the receiver is in possession of real or personal property subject to a lease which the receiver is permitted to avoid, as provided in paragraph I of this section, and if the possession of such property is necessary for the continued operation of the facility, the receiver shall motion the court to set a reasonable rent to be paid by the receiver to the person entitled thereto during the duration of the receivership. The court shall hold a hearing on the motion within 15 days of the date of filing. The receiver shall send notice of the application to any owners of record and to mortgagees and other secured parties and lienholders of record of the property involved at least 10 days prior to the hearing. In no event shall the amount set by the court exceed what is reasonable for the facility. Payment by the receiver of the amount determined by the court to be reasonable shall be a defense to any action against the receiver for payment or for the possession of said property subject to the lease involved by any person who received such notice, but the payment shall not relieve the owner or operator of the facility of any liability following the termination of the receivership for the difference between the amount paid by the receiver and the amount due under the original lease.
III. Notwithstanding paragraphs I and II of this section, or any other federal or state law to the contrary, there shall be no foreclosure or eviction of the facility by the property owner during the receivership period.
IV. Nothing in this section shall be deemed to relieve any licensee, owner or owners, administrator, or employee of a facility placed in receivership of any civil or criminal liability incurred, or any duty imposed by law, by reason of acts or omissions of the licensee, owner or owners, administrator, or employee prior to the appointment of a receiver; nor shall anything contained in this section be construed to suspend during the receivership any obligation of the licensee, owner or owners, administrator, or employee for payment of taxes or other operating and maintenance expenses of the facility nor of the licensee, owner or owners, administrator, employee or any other person for the payment of mortgages or liens. The owner or owners shall retain the right to sell or mortgage any facility under receivership, subject to approval of the court.

Source. 2012, 162:1, eff. June 7, 2012.

Section 151-H:6

    151-H:6 Compensation of Receiver. – The court shall set a reasonable compensation for the receiver, and may require the receiver to furnish a bond. Such expenses shall be paid from the revenues of the facility.

Source. 2012, 162:1, eff. June 7, 2012.

Section 151-H:7

    151-H:7 Recoupment of State Expenditures. – Upon court approval, the state may, pursuant to a petition filed by the department, have a lien for any loan under RSA 151-H:4, VI upon the following property: the building in which the facility is located; the land on which the facility is located; and any fixtures, equipment, or goods used in the operation of the facility. However, the department shall have the burden of proving by clear and convincing evidence that the owner or owners of the property directly benefited from the loan and that the court determines that approval of such lien is fair and equitable considering all of the factual circumstances in a light most favorable to the owner or owners. Such lien shall be prior to any mortgage or lien which the court orders to be avoided by the receiver because it has been obtained for a fraudulent purpose, hinders or delays creditors, or is unrelated to the operation of the facility, as provided in RSA 151-H:5, I. Such lien shall also be prior to a mortgage or lien held by any person with an ownership interest in the facility; or any person which controls or has the ability to directly or indirectly control to any significant degree the management of policies of the licensee or the facility; or any person related to the licensee or to the facility by any significant degree of common ownership or common control. The receiver shall cause notice of any lien created hereunder to be duly filed in accordance with New Hampshire law.

Source. 2012, 162:1, eff. June 7, 2012.

Section 151-H:8

    151-H:8 Termination of Receivership. –
I. After a hearing on the merits, the court may terminate a receivership under the following conditions:
(a) The department grants a license to operate the facility to the licensee divested of possession and control by the receiver;
(b) There is a transfer of ownership or management of the facility to a transferee approved for licensure by the department; or
(c) All residents of the facility have been provided appropriate alternative placements.
II. Notwithstanding the provisions of paragraph I of this section, a receivership shall not be terminated in favor of the former licensee, unless such person assumes all obligations incurred by the receiver and provides collateral or other assurance of payment.
III. If the receivership has not been terminated within 90 days of the appointment of the receiver, the court shall, after a hearing on the merits, order either the orderly transfer of the residents to appropriate alternative placements; or the facility shall be transferred, under reasonable terms approved by the court, to a new owner or operator approved for licensure by the department. The receivership period may be extended by the court following the 90-day review only with the agreement of all of the parties involved or, upon a showing by clear and convincing evidence, that such action is necessary to protect the health and safety of the residents.
IV. Within 30 days after termination of the receivership, or such time as the court may allow, the receiver shall submit to the court a final accounting of all property of which the receiver has taken possession, of all funds collected under this section and all expenses of the receivership. The court shall fix the fees and expenses of the receiver and issue orders for the disposition of funds held by the receiver following a hearing, at which time the following parties may appear and be heard: the licensee at the time the receivership was established, the current licensee, the owner or owners, the administrator, the department, and any mortgagee or lienholder whose interests could be impacted by the court's order. Following the court's determination of the receiver's fees and expenses, and the disposition of funds held by the receiver, control of the facility shall be relinquished by the receiver to the current licensee or owner subject to the rights of any third parties.

Source. 2012, 162:1, eff. June 7, 2012.

Section 151-H:9

    151-H:9 Actions Against Receiver; Liability. – No person shall bring an action against a receiver appointed under RSA 151-H:3 without prior approval of the court. The receiver shall not be personally liable unless he or she commits acts or omissions amounting to gross negligence, intentional tortious conduct, or breach of fiduciary duties. In all other cases, the receiver shall be liable in his or her official capacity only, and any judgment rendered shall be satisfied out of the receivership assets.

Source. 2012, 162:1, eff. June 7, 2012.

Section 151-H:10

    151-H:10 Effect of Appointment; Violation of Regulations. – An order appointing a receiver under RSA 151-H:3 shall have the effect of a license for the duration of the receivership. The receiver shall comply with all state and federal laws and regulations governing the rights of residents and provision of health care services. The receiver shall be responsible to the court for the conduct of the facility during the receivership, and any violation of regulations governing the conduct of the facility, if not promptly corrected, shall be reported by the receiver to the court and the department.

Source. 2012, 162:1, eff. June 7, 2012.