Last updated: November 2026
New York Article 28 establishment application readiness is the preparation a sponsor completes before asking the Public Health and Health Planning Council (the council) to approve a new hospital, a term the Public Health Law defines to include a diagnostic center and a treatment center. Section 2801-a bars establishing a hospital without the council's written approval.
Integral Healthcare Solutions (IHS) drafts the work plan, disclosure checklist, financial worksheets and operating policies for the sponsor and counsel to review.
What is New York Article 28 establishment approval?
It is the council's written approval, which section 2801-a of the Public Health Law requires before a hospital is established; the statute's definition of hospital names diagnostic centers and treatment centers. Sources: New York Public Health Law 2801-a, Establishment or incorporation of hospitals (revision December 26, 2025); 2801, Definitions (revision June 12, 2026); and 2802-b, Health equity impact assessments (revision December 15, 2023); each page opened November 5, 2026. This is a statutory overview; counsel must also check current regulations and application forms. Nursing-home-specific requirements in 2801-a(2-b), (3-b) and residential-facility disclosures in (11) are outside this overview.
Which facilities count as hospitals?
Section 2801 includes diagnostic and treatment centers within its hospital definition, subject to its clinical-supervision conditions and exclusions. These include a mental-disability facility subject to Department of Mental Hygiene oversight, except its distinct hospital-service parts. Article 28 also excludes facilities principally providing services by or under bona fide adherents of a recognized religion relying on prayer alone for healing, when services follow those teachings. The Senate publishes two versions of subdivision 1 keyed to approval and certification of integrated behavioral health reimbursement rates under chapter 60 of 2026, section 8; counsel must determine the applicable version and integrated-services provisions.
What must the council be satisfied about?
Subdivision 3 says the council may not approve an application for establishment unless it is satisfied, insofar as applicable, as to:
- (a) Public need for the existence of the institution at the time and place and under the circumstances proposed. For institutions established or operated by organizations described in Executive Law 172-a(1), the proviso treats members' needs for care consistent with their religious or ethical convictions as public need.
- (b) Character, competence and standing in the community of the proposed incorporators, directors, sponsors, stockholders, members or operators. The ten-year affiliation review in subdivision 3(b) applies to specified roles and facility types, with social-services certification or mental-hygiene approval conditions for the listed residential facilities. Counsel should map each proposed person to that provision, including its precise finding requirements and the hearing opportunity for geographically relevant health systems agency members. Violations bar a high-care finding when they threatened patient or resident health, safety or welfare directly and were recurrent or not promptly corrected.
- (c) Financial resources of the proposed institution and its sources of future revenues.
- (d) Other matters the council deems pertinent.
How does the application move?
Under subdivision 2, the applicant files the prescribed or acceptable forms and information with the council. That subdivision addresses health systems agency recommendations, applicant presentations, hearing rights and presentation deadlines. Those deadlines concern council consideration, not guaranteed approval dates; counsel should check the full procedure for the project.
Subdivision 13 sets a civil penalty for operating without approval (see the FAQ).
Who needs it and what triggers it?
Sponsors may use IHS readiness support for establishment or operator changes. The law requires approval or notice for specified transactions; it does not require hiring IHS. Examples include:
- A new facility or entity. No hospital may be established without the council's written approval, and articles of organization of a limited liability company with that purpose are filed with the Department of State only upon that approval (subdivision 1).
- A transfer of ten percent or more of an interest or voting rights in a partnership or limited liability company operator, to a new partner or member. The council approves it, with character review only for the new partner or member and any remaining partners or members not previously approved for that facility under the character criterion, and without the public need criterion (4(b)(i)).
- A transfer below ten percent to a new partner or member. For a partnership or LLC hospital operator, no prior approval is required under 4(b)(ii), but a fully completed council notice must be filed at least ninety days before the intended effective date. The council may bar it on that provision's grounds within ninety days after receipt.
- Health equity assessment applicability. Counsel checks section 2802-b's application definition and exceptions before commissioning an assessment; see the FAQ.
How IHS helps
Integral Healthcare Solutions (IHS) offers accreditation consulting, compliance services and program development; this page sits in compliance services. IHS turns the subdivision 3 matters and the section 2802-b inputs into a work plan the sponsor can run:
- Coverage and structure check. IHS lists the services and ownership chart so counsel can decide whether the project is a hospital and whether the structure fits subdivisions 4 and 9.
- Gap assessment and evidence map. IHS compares available documents with the applicable statutory criteria and records missing evidence, owners and next steps.
- Disclosure checklist. For each person in the character criterion, the past ten years of affiliations and the records to gather.
- Financial worksheets that the sponsor and its accountant complete.
- Drafting and mock review. IHS drafts operating policies for clinician approval, checks the draft package for gaps and helps the sponsor prepare its presentation.
The sponsor supplies the facts, every disclosure, counsel's review, the filing and all dealings with the Department of Health and the council. The real limits: IHS excludes health equity impact assessment preparation from this service. Section 2802-b requires an independent preparer; counsel checks independence. IHS does not file with, call or correspond with the Department or the council, and it does not predict approval.
What to have ready
IHS recommends these preparation materials; they are not a statutory checklist. Linked pages opened November 5, 2026:
- Counsel's coverage analysis: PHL 2801 (June 12, 2026 revision), subdivision 1.
- Ownership chart and counsel's analysis of permitted structures and exceptions: PHL 2801-a (December 26, 2025 revision), subdivisions 4, 9 and 15.
- Public-need narrative: PHL 2801-a (December 26, 2025 revision), subdivision 3(a).
- Proposed-person disclosures, relevant affiliations and care records, scoped by counsel: PHL 2801-a (December 26, 2025 revision), subdivision 3(b).
- Resources and future-revenue plan: PHL 2801-a (December 26, 2025 revision), subdivision 3(c).
- Assessment or counsel's applicability analysis, addressing both the application definition and the diagnostic-and-treatment-center exception: PHL 2802-b (December 15, 2023 revision), subdivisions 1(a), 2(a) and 4.
- Fee category and any establishment-plus-construction carve-out: PHL 2801-a (December 26, 2025 revision), subdivision 16.
If the public need and financial pieces are still unwritten, schedule the free introductory call before a filing date is set.
How it compares
Council approval under section 2801-a is one authorization among several.
- New York PBM license. Different law and a different kind of business; see the New York PBM license page.
- Certificate of need elsewhere. For IHS's broader service scope, see the state licensing and certificate of need page.
What it costs
Under subdivision 16 of section 2801-a (page opened November 5, 2026), the commissioner charges 3,000 dollars for general hospitals and nursing homes, 1,000 dollars for safety net diagnostic and treatment centers and 2,000 dollars for all other diagnostic and treatment centers. An applicant for both establishment and construction is not subject to that subdivision and is subject to the fees in section 2802, which we did not open. The commissioner may designate safety net centers under subdivision 16(c). Verify current fees with the New York State Department of Health.
Scope turns on how many people need a character and competence file and how much of the public need and financial analysis already exists. IHS scopes each engagement after a free introductory call.
What this is not
This is not legal advice. IHS is a consulting firm, not a law firm, and counsel decides how the statute applies to the sponsor.
It is not a prediction of approval or a health equity impact assessment.
It is not IHS acting for you with the state. IHS does not contact the Department of Health or the council; the sponsor files and answers.
Frequently asked questions
Who must get approval before establishing a hospital or clinic in New York?
Section 2801-a says no hospital, as defined in the article, may be established except with the written approval of the Public Health and Health Planning Council. Whether a clinic is a hospital depends on section 2801, and counsel confirms coverage first.
Is a diagnostic and treatment center a hospital under Article 28?
Section 2801 defines a hospital to include a diagnostic center and a treatment center. The definition has exclusions, so counsel confirms each project against the current text.
What does the council weigh?
Subdivision 3 says the council may not approve unless it is satisfied, insofar as applicable, as to public need, the character, competence and standing of the people involved, the institution's financial resources and sources of future revenues, and such other matters as it deems pertinent. Counsel reads it in full.
What does the character and competence review cover?
Subdivision 3(b) ties the review to specified proposed roles and current or past-ten-year affiliations with listed facilities, including their certification or approval conditions. It requires the stated substantial-evidence care finding after the relevant health systems agency members have an opportunity to be heard; violations bar that finding when they directly threatened patient or resident health, safety or welfare and were recurrent or not promptly corrected.
Does a change of owner or operator need approval?
Section 2801-a(4) governs operator and ownership changes, with different routes by transaction and entity type. For partnership or LLC transfers to a new partner or member, interest or voting rights of ten percent or more require approval; character review covers the new person and remaining persons not previously approved for that facility, without public-need review. Below ten percent, a fully completed notice must be filed at least ninety days before effectiveness, and the council may bar the transaction within ninety days of receipt on statutory grounds. Counsel also checks the business-form-change route in subdivision 2-a and the separate corporate rules in 4(c).
Is a health equity impact assessment required, and who prepares it?
For applications within section 2802-b(1)(a), an assessment must accompany the filing for completeness, subject to exceptions. A change in establishment, merger or acquisition falls outside that definition if it does not eliminate, substantially reduce, expand, add or relocate hospital or health-related services. A diagnostic and treatment center with over fifty percent combined Medicaid-enrolled or uninsured patients is exempt unless its application changes a controlling person, principal stockholder or principal member as defined in 2801-a. An independent entity prepares the assessment with meaningful engagement of public health experts, organizations representing the applicant's employees, stakeholders, and community leaders and residents of the applicant's service area.
What is the penalty for operating without approval?
Anyone who operates a hospital without the council's written approval is liable to the people of the state for a civil penalty not to exceed ten thousand dollars for every such violation. Counsel advises on exposure.
What does IHS prepare and what does the sponsor file?
IHS prepares the work plan, disclosure checklist, financial worksheets and operating policies. The sponsor supplies the facts, counsel reviews, and the sponsor files and answers the Department and the council. IHS does not contact either.