TITLE 23
Health and Safety

CHAPTER 23-17.14
The Hospital Conversions Act

SECTION 23-17.14-28


§ 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, 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 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 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 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 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 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 condition(s) in any approval.

(d) For a period of three (3) years following the effective date of the conversion, when approval of a conversion involves 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 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 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 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.

History of Section.
(P.L. 1997, ch. 372, § 1; P.L. 2012, ch. 258, § 1; P.L. 2012, ch. 259, § 1.)