On June 9, 2021 Mayor Jim Kenney signed municipal legislation amending the Philadelphia Health Code to add a section establishing reporting and employment requirements related to changes in ownership or of the license holder of long-term care facilities and hospitals. Proposed in April by the Committee on Public Health and Human Services, Bill No. 210331 (the “Ordinance”) was passed by the Philadelphia City Council on May 27, 2021. The Ordinance imposes certain notification requirements for hospitals and long-term care facilities pursuant to a 5% or more change in ownership of the owner or operator of such institutions. The City of Philadelphia Ordinance requires hospitals and long-term care facilities to provide notices to the City of Philadelphia, as well as to facility employees prior to the effective date of a sale or other change in ownership interest. The ordinance also requires that certain documentary evidence of the transaction be posted the institution’s website. Following the initial posting of such notices, there are ongoing requirements for the owner or operator of a facility to update the information made available to its employees and the public on a weekly basis as well as additional notice requirements upon the effective date of the change.

In addition to the reporting requirements, the Ordinance also imposes certain employment obligations following the change. During the three-month transition period after the change, the new owner or operator of a hospital or long-term care facility is required to retain all individuals either employed or otherwise contracted by the prior owner. Not only are new owners and operators required to retain all individuals employed by their predecessors, they must do so at the same pay and benefits for the duration of the transition period, with limited exceptions.

Organizations and institutions contemplating the benefits of new investors or otherwise considering any transactions that might constitute a change in ownership should take care to ensure compliance with these new obligations imposed by the City of Philadelphia in addition to any other requirements imposed by the Commonwealth of Pennsylvania.