Chapter 275 |
2019 -- H 5695 SUBSTITUTE A Enacted 07/16/2019 |
A N A C T |
RELATING TO HEALTH AND SAFETY - THE HOSPITAL CONVERSIONS ACT |
Introduced By: Representative Raymond H. Johnston |
Date Introduced: February 27, 2019 |
It is enacted by the General Assembly as follows: |
SECTION 1. Sections 23-17.14-28, 23-17.14-30 and 23-17.14-34 of the General Laws in |
Chapter 23-17.14 entitled "The Hospital Conversions Act" are hereby amended to read as |
follows: |
23-17.14-28. Concurrent approval -- License. |
(a) The director may consider the requirement of this chapter and the requirements of §§ |
23-17-1 -- 23-17-45 together upon completion of the initial application. The director may |
approve, approve with conditions, or disapprove one or both requests filed pursuant to this |
chapter, including expedited review under section 12.1 § 23-17.14-12.1, and §§ 23-17-1 -- 23-17- |
45. The approvals of the director required by this chapter shall be subject to chapter 35 of title 42. |
For any conversion subject to this chapter, the director may combine any hearings required by |
this chapter with any hearings on similar or related matters required by §§ 23-17-1 -- 23-17-45 |
and shall consider issues of market share especially as they affect quality, access, and |
affordability of services. |
(b) Any approval of a conversion involving a for-profit corporation as an acquiror shall |
be subject to any conditions as determined by the director of health, provided those conditions |
relate to the purpose of this chapter. Said The conditions may include, but not be limited to, the |
conditions contained in this subsection. In the event the director determines that one or more of |
the conditions contained in this subsection are not appropriate or desirable in a particular |
conversion, the director shall include the rationale for not including such the condition(s) in any |
approval. |
(1) Maintain a governing body for each converted hospital whose membership shall |
include uncompensated, independent individuals who reside in Rhode Island; |
(2) Make a financially reasonable contribution to support the state's coordinated health |
planning process; |
(3) Adhere to reasonable restrictions on financial incentives to patient or health plan |
enrollees to receive hospital services outside of the state of Rhode Island; |
(4) Keep the new hospital open and operational for a reasonable minimum period of time; |
(5) Make a reasonable minimum investment to support primary care in the Rhode Island |
communities served by the new hospital; |
(6) Not enter into any contract or other service or purchasing arrangements with an |
affiliated legal entity except for contracts or arrangements to provide services or products that are |
reasonably necessary to accomplish the health care healthcare purposes of the relevant hospital |
and for compensation that is consistent with fair-market value for the services actually rendered, |
or the products actually provided; |
(7) Report to the director on annual distributions of profit to owners; and |
(8) Require that any corporate allocation, or equivalent charge, to any affiliated |
organization(s) in any hospital fiscal year not exceed reasonable fair-market value for the services |
rendered or the assets purchased or leased from such the affiliate. |
(c) Any approval of a conversion involving a for-profit corporation as an acquiror shall |
be subject to any conditions as determined by the attorney general, provided those conditions |
relate to the purpose of this chapter. Said The conditions may include, but not be limited to, the |
acquiror's adherence to a minimum investment to protect the assets, financial health, and well- |
being of the new hospital and for community benefit. In the event the attorney general determines |
that the conditions contained in this subsection are not appropriate or desirable in a particular |
conversion, the attorney general shall include the rationale for not including such the condition(s) |
in any approval. |
(d) For a period of three (3) five (5) years following the effective date of the conversion, |
when approval of a conversion involves either a not-for-profit or a for-profit corporation as an |
acquiror: |
(1) The acquiror shall file reports with the department and the attorney general on or |
before March 1st of each calendar year detailing compliance with the conditions in subsection (b) |
and any other conditions on the conversion approval or license of the new hospital. Failure to |
comply with any of such the conditions or the charity care requirements contained in § 23-17.14- |
15 shall be cause for penalties to be applied in accordance with § 23-17.14-30; |
(2) The department of health and the department of attorney general shall monitor, assess, |
and evaluate the acquiror's compliance with all of the conditions of approval, as well as annually |
review the impact of the conversion on health care healthcare costs and services within the |
communities served; and |
(3) The acquiror shall pay for the costs of the department of health and the department of |
attorney general in performing such the monitoring, evaluation, and assessment in an amount to |
be determined by the attorney general or the director as they deem appropriate, which should be |
placed in escrow during the term of the monitoring period. No application for a conversion made |
pursuant to the requirements of this chapter shall be approved unless an agreement has been |
executed with the attorney general and the director for the payment of reasonable costs in |
accordance with this section.; and |
(4) The department and/or the attorney general may seek immediate relief in the superior |
court to enforce any conditions of approval of a conversion, and may impose penalties for |
noncompliance pursuant to § 23-17.14-30. |
23-17.14-30. Failure to comply -- Penalties. |
If any person knowingly violates or fails to comply with any provision of this chapter or |
willingly or knowingly gives false or incorrect information: |
(1) The director or attorney general may, after notice and opportunity for a prompt and |
fair hearing to the applicant or licensee one or more transacting parties, deny, suspend, or revoke |
a license, or in lieu of suspension or revocation of the license, may order the licensee to admit no |
additional persons to the facility, to provide health services to no additional persons through the |
facility, or to take any corrective action necessary to secure compliance under this chapter, and |
impose a fine of not more than two million dollars ($2,000,000); or and |
(2) The superior court may, after notice and opportunity for a prompt and fair hearing, |
may impose a fine of not more than one million dollars ($1,000,000) or impose a prison term of |
not more than five (5) years. The attorney general may, after notice and opportunity for a prompt |
and fair hearing to one or more transacting parties, take any corrective action necessary to secure |
compliance under this chapter, and impose a fine of not more than two million dollars |
($2,000,000). |
23-17.14-34. Judicial review. |
(a) Notwithstanding any other provision of the general laws, any Any transacting party |
aggrieved by a final order of the department of health or the attorney general under this chapter |
may seek judicial review by original action filed in the superior court in accordance with § 42-35- |
15. Any preliminary, procedural, or intermediate agency act or ruling with respect to the filing of |
an application for conversion, including the completeness of the application, confidentiality of |
any information or documents produced in connection with a conversion, approval or disapproval |
of a conversion and conditions or restrictions proposed or determined with the respect to the |
approval of a proposed conversion, is immediately reviewable. |
(b) Any action brought under this section shall be given priority by the superior court. |
(c) In performing such review the superior court shall consider and balance the |
reasonable interests of the transacting parties and the reasonable interest of the citizens of the |
state in a safe, accessible, and affordable healthcare system. |
(d) The court may affirm the decision of the agency or remand the case for further |
proceedings, or it may reverse or modify the decision if substantial rights of the appellant have |
been prejudiced because the administrative findings, inferences, conclusions, or decisions are: |
(1) Unreasonable; |
(2) In violation of constitutional or statutory provisions; |
(3) In excess of the statutory authority of the agency; |
(4) Made upon unlawful procedure; |
(5) Affected by other error or law; |
(6) Clearly erroneous in view of the reliable, probative, and substantial evidence on the |
whole record; or |
(7) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted |
exercise of discretion. |
SECTION 2. This act shall take effect upon passage. |
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LC001571/SUB A |
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