Sale or Change of Legal Entity of Personal Care Homes

Commonwealth of Pennsylvania
Department of Human Services
Adult Residential Licensing

Personal Care Home Sale or Change of Legal Entity
Policy and Procedures
July 17, 2009

Purpose:

The following procedure is intended to provide continuity of licensing and operator accountability during the sale and transfer of a continuously operating personal care home (PCH) from one legal entity/operator to another, while providing assurance of licensing at the time of the legal transfer.

Procedure:

  1. In advance of the scheduled date of sale of an operating facility, the prospective buyer (applicant) completes a licensing application and submits the required application and accompanying documents and fees to the Department of Human Services (Department). This completed application must be submitted to the Department's Division of Human Service Licensing Management at least 60 days prior to the scheduled date of sale or change of legal entity.
  2. The completed application is assigned a license number by the Office of Administration, Human Services Licensing Management and Research and is forwarded to the Department's Adult Residential Licensing (ARL) Headquarters office.
  3. The ARL Headquarters office contacts the applicant to request a letter, signed by an officer of the applicant's legal entity or the legal entity's attorney, stating the applicant's intent to purchase the facility and the anticipated date of the sale. Documentation from the real estate broker, sales agent or existing licensee verifying this information must be submitted as well.
  4. The ARL Headquarters Policy Director reviews the completed application, which includes reviewing the following: (a) criminal history of applicant and administrator; (b) prior health and human service license history of applicant and legal entity; (c) prior license action/status of legal entity; (d) Certificate of Occupancy; (e) suitability of physical site location or premises; (f) any suspicion, falsification or fraud in application submission and (g) applicant and legal entity "Responsible person" status.
  5. If the application review does not result in concerns, the ARL Policy Director will request the following documentation from the home prior to scheduling an initial inspection of the home (as defined in Attachment C to be sent to the home): (a) education and training qualifications of the administrator (§ 2600.53, 64); (b) criminal history background checks in accordance with the OAPSA for the owner/operator (applicable if the owner/operator plans on going into the home; or send documentation stating that the owner/operator will never go into the home), administrator and each already hired/identified staff persons and the applicant’s policies and procedures for conducting criminal history clearances for all future staff to be hired. Verification of completion of the on-line OAPSA training by the administrator and all management staff person already hired (§ 2600.51, 52); (c) the planned staffing patterns/shifts/duties of staff hired/to be hired (§ 2600.56-61); (d) the educational and training qualifications of staff to be hired (§ 2600.54, 63, 65). e. A staff training planning plan for the first 12 months of operation (§ 2600.66); (f) the floor plan/layout of the building, including all floors/levels of the home and clearly indicating all internal and external exit paths and exits doors. The floor plan shall indicate the size of each resident bedroom and each living/activity room in the home. The floor plan shall indicate the location of each resident and staff bathroom including the number of sinks, toilets and showers/tubs. The floor plan shall indicate the location of kitchens and dining rooms (§ 2600.81, 97 if applicable, 98, 101, 102, 104, 121, 122, 123 and 231-239 if secure dementia care); (g) the home’s policies and procedures for the following: reporting and investigating incidents (§ 2600.16), confidentiality of records (§ 2600.17), quality management (§ 2600.26), resident rights and complaint procedures (§ 2600.42, 43, 44), emergency preparedness (§ 2600.107), assistance with health care (§ 2600.142), emergency medical care (§ 2600.143), smoking safety (§ 2600.144), medication administration (§ 2600.181-189), description of services (§223(a) and (b)), discharge/transfer (§ 2600.228), record security policies (§ 2600.254(b)); (h) the home’s forms for the following: resident-home contract (§ 2600.25), resident rights poster (§ 2600.41), fire drills (§ 2600.132), preadmission screening (§ 2600.224), assessments (§ 2600.225), support plans (§ 2600.227) and medication record (§ 2600.187); (i) compliance with fire retardant mattress requirement (§ 2600.101(j)(1)); (j) Civil Rights Compliance letter (from the Department’s Bureau of Equal Opportunity); (k) documentation showing the home’s water source. If the home uses public water, the home should submit a current water bill. If the home uses private water (well), the home should submit a permit from the Department of Environmental Protection (DEP) for their water source (§ 2600.18); (l) documentation showing the home's sewer source. If the home uses public sewer, the home should submit a current sewage bill. If the home is not connected to a public sewer system and serves 9 or more residents, the home should submit written sanitation approval for its sewage system from the local sewage enforcement official of the municipality in which the home is located (§ 2600.85f); (m) documentation showing building code authority to serve one or more persons with mobility needs. The certificate of occupancy must have a use and occupancy code of I-2 or C1 in order to serve one or more persons with mobility needs. (Attach copy of I-2 or C1 certificate of occupancy OR the attached affidavit agreeing to serve persons without mobility needs); (n) affidavit for the sale of a legal entity that is currently operating pending appeal of a Departmental enforcement action, or previous operator was deemed "not a responsible person" by the Department; (o) a statement from the home's legal entity listing all licensed personal care homes with which it is affiliated (including but not limited to parent companies, subsidiaries, partnerships, management agreements; etc.).
  6. Upon receipt and compliance verification of all of the documentation specified in #5, the ARL Policy Director will notify the appropriate ARL Regional Office (RO) to proceed and schedule an initial inspection. The timing of the inspection shall be scheduled in accordance with ARL Workload Priorities, but no later than 60 calendar days following submission of all documents required in #5.
  7. The ARL RO schedules and conducts a physical site inspection, measuring compliance with those sections of the regulations that can be measured in a new legal entity, including physical site and required policies and procedures of the applicant. Requirements related to the service of existing residents cannot be measured as the home is still under the operation of the current legal entity. The ARL RO will review 55 Pa.Code Ch 2600 regulations with the applicant.
  8. If one or more violations exist (if no violations exist, skip to step 10), the ARL RO completes a Violation Report (VR) and forwards the report to the applicant for completion of a plan of correction (POC).
  9. The applicant completes a POC within the time period specified in the letter from the Department (generally 7 calendar days) and submits the plan to the ARL RO.
  10. The ARL RO reviews and accepts the POC, or returns the VR to the applicant for revision.
  11. The applicant implements the POC.
  12. The ARL RO verifies (or preliminary verifies) compliance with the plan of correction and determines the status of the applicant’s compliance.
  13. If the ARL RO determines that the new legal entity is able and willing to comply with the regulations, the ARL RO completes a PW-68 (Recommendation for Certificate of Compliance Form) recommending a regular/first provisional license, appropriate transmittal letter, Violation Report/POC, if any.
  14. If the Department determines that the requirements in 62 P.S. § 1007 are met, the Department of Human Services issues a license to the applicant, effective the date of license issuance or the anticipated date of sale, whichever is later.
  15. The ARL RO processes a PW-68 for a voluntary closure of the selling legal entity effective on the actual sale date of the home. If the actual date of the purchase is delayed from the scheduled purchase date, some overlap may occur. The seller remains responsible for maintaining compliance with the applicable regulations until the actual sale date. 

As stated above, the new home/sale of legal entity application process takes 60 DAYS AT THE VERY MINIMUM. All applicants should consider this at the time they submit their application and plan accordingly. Applications received by the Department cannot be expedited; however, the length of the application process is contingent upon the applicant submitting correct documentation in compliance with the regulations in a timely manner.

NOTE: A new legal entity may NOT begin to operate a personal care home until it has in its possession a license issued by the Department of Human Services (see 62 P.S. § 1002). Issuance of a license in accordance with the anticipated sale date is dependent on the applicant's timely correction of violations. Any delay on the part of the applicant may necessitate the postponement of the sale date until the licensing process can be completed.

A facility may only serve up to 3 residents without needing a license from the Department. Serving 4 or more residents requires having a license issued by the Department to operate. Serving 4 or more residents without a license by the Department is considered an illegal operation, and may render enforcement action.