Ohio’s New Residential Care Facility Rules: Important Updates on Changes in Ownership and Control From a Licensure Perspective

Effective July 12, 2024, the Ohio Department of Health (“ODH”) promulgated new rules and regulations for residential care facilities (“RCFs”), also known as assisted living facilities. These rules, set forth in the Ohio Administrative Code (3701-16-01 to 3701-16-18), introduced significant changes aimed at improving the safety and quality of care for residents, as well as lengthened the time and broadened the scope of what constitutes a change in operator (“CHOP”).

Key Changes and Requirements

1. Changes in Licensing and Operations: Rule 3701-16-03, governing the licensure application and renewal procedures, was substantially changed. The revised rule provides clearer guidelines on the requirements for CHOP applications, financial solvency statements, and the notification process for facility closures.

2. Additional Provisions: Other significant updates included changes to water management plans, infection control requirements, personnel qualifications, dietary standards, disaster preparedness, and safety protocols.¹

Changes in Licensing and Operations

Under the new Ohio rules, an RCF must now submit a CHOP application at least 60 days before the proposed change takes effect. Previously, a CHOP application had to be submitted at least 30 days in advance of a proposed change. For providers, this means they need to plan and prepare further in advance when transitioning ownership, and a potentially longer timeframe to close a transaction.

Additionally, under the new Ohio rules, a change of the “majority ownership” of a licensed operator is now classified as a CHOP, requiring the submission of a CHOP application at least 60 days in advance of the change. The rules do not specifically define what comprises a change of the “majority ownership.” However, this language is broader than the previous rule, which only triggered the filing of a CHOP application upon a change in licensee (i.e., change in Tax ID). From a practical standpoint, this means providers must carefully assess whether a parent level or higher ownership change in the corporate structure of a licensed operator amounts to a CHOP. Consequently, providers must look to subregulatory guidance from ODH in the near future for further insight and interpretation of the meaning of “majority ownership” (including an updated CHOP application).

The author thanks AGG law clerk Matilde Fabris for her contributions to this article.

[1] See e.g., Rule 3701-16-12 and 3701-16-13.