2012 -- S 2180

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LC00664

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO HEALTH AND SAFETY - HOSPITAL CONVERSIONS ACT

     Introduced By: Senators Picard, Ruggerio, and Cote

     Date Introduced: January 24, 2012

     Referred To: Senate Health & Human Services

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 23-17.14-19 of the General Laws in Chapter 23-17.14 entitled "The

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Hospital Conversions Act" is hereby amended to read as follows:

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     23-17.14-19. Limits to acquisitions -- Community benefits requirements -- Filings

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prohibited. Approval of Conversion of for-profit hospital. (a) In effectuating the purposes of

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this chapter to evaluate, review and monitor the new phenomenon of for-profit corporations

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gaining an interest in hospitals and the resulting impact on the delivery of healthcare in the state,

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limitations on for-profit corporations involved in hospital conversions are necessary.

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      (b) No for-profit corporation, or its subsidiaries or affiliates, which applies for and

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receives approval of a conversion of a hospital in accordance with the provisions of this chapter

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shall be permitted to apply for approval of a conversion of a second hospital in this state for a

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period of at least three (3) years after the initial conversion is finalized and implemented. This

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subsection shall not be deemed to prohibit a for-profit corporation, together with its subsidiaries

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and affiliates, from applying for or receiving approval of a conversion of two (2) affiliated

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hospitals in this state provided that: (1) one of the two (2) hospital licenses involved in the

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conversion was issued prior to July 22, 1997; and (2) this license involves a specialty

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rehabilitation hospital that has a maximum of ninety (90) beds. A conversion undertaken pursuant

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to this provision shall be considered one conversion and a for-profit corporation which receives

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approval for the conversion shall be subject to the three (3) year period between the finalization

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and implementation of a first conversion and the application for a second conversion as set forth

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in this subsection.

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      (c) In the event that a for-profit corporation applies to hold, own, or acquire an

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ownership or controlling interest greater than twenty percent (20%) in more than one hospital one

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year subsequent to the finalization and implementation of a prior license, all provisions of this

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chapter must be met and, in addition to the review process and criteria set forth in this chapter, the

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department shall have the sole authority and discretion to determine:

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      (1) Whether the for-profit corporation provided community benefits as required or

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promised in connection with obtaining and holding a license or interest therein during the

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previous license period;

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      (2) Whether all terms and conditions of the prior license have been met;

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      (3) Whether all federal, state and local laws, ordinances and regulations have been

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complied with relative to any prior license;

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      (4) Whether the for-profit corporation planned, implemented, monitored and reviewed a

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community benefit program during the prior license period;

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      (5) Whether the for-profit corporation maintained, enhanced or disrupted the essential

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medical services in the affected community or the state;

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      (6) Whether the for-profit corporation provided an appropriate amount of charity care

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necessary to maintain or enhance a safe and accessible healthcare delivery system in the affected

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community and the state; and

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      (7) Whether the for-profit corporation demonstrated a substantial linkage between the

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hospital and the affected community by providing one or more of the following benefits;

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uncompensated care, charity care, cash or in kind donations to community programs, education

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and training of professionals in community health issues, relevant research initiatives or essential

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but unprofitable medical services if needed in the affected community.

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      (d) The director may hold a public hearing to solicit input to assess the performance of a

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for-profit corporation or its affiliates or subsidiaries in providing community benefits in the

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affected community or the state.

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      (e) The director shall have the sole authority to deny a for-profit corporation, its affiliates

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or subsidiaries, or successors, permission for one or more than one license and, for good cause,

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may prohibit a for-profit corporation or its affiliates or subsidiaries from filing an application

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pursuant to this chapter for a period not to exceed ten (10) years.

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     Notwithstanding any other provision in this chapter, nothing herein shall be construed to

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prohibit a for-profit hospital, its subsidiaries or affiliates, from applying for, and receiving

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approval of a conversion of more than one hospital in the same year, or any subsequent year, and

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each such application shall require review and approval from the department of attorney general,

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and from the department of health in accordance with the provisions of this chapter.

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     SECTION 2. This act shall take effect upon passage.

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LC00664

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO HEALTH AND SAFETY - HOSPITAL CONVERSIONS ACT

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     This act would eliminate certain requirements imposed on for-profit corporations seeking

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to gain an interest in hospitals and would permit a for-profit hospital, its subsidiaries or affiliates,

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to apply for and receive approval of a conversion of more than one hospital in the same or any

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subsequent year, suspect to approval from the attorney general and the department of health.

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     This act would take effect upon passage.

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LC00664

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