NEW: Assembly approves changes to Hospital Conversion Act
Tuesday, June 12, 2012
The General Assembly on Monday passed changes to the Hospital Conversion Act to eliminate a prohibition on for-profit companies acquiring more than one hospital in the state in a three-year period, but would require other provisions aimed at maintaining the hospital’s ties and contributions to the local community. The legislation now heads to the governor’s desk.
The legislation (2012-H 7283A, 2012-S 2180B), sponsored by House Majority Leader Nicholas A. Mattiello (D-Dist. 15, Cranston) and Sen. Roger A. Picard (D-Dist. 20, Woonsocket, Cumberland), relates to the proposed purchase of Landmark Medical Center in Woonsocket by Massachusetts for-profit hospital operator Steward Health Care Services and subsequent hospital conversions in Rhode Island.
“We’re looking at creating a climate where, if there’s an entity, be it public or private, that is able and willing to keep our community hospitals open and serving the community, we will work with them. This legislation makes it possible to talk to whomever is interested and place whatever restrictions are necessary on an agreement with them if they are willing to run a community hospital,” said Leader Mattiello.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe legislation removes a ban on a single entity or its subsidiaries or partners from converting more than one Rhode Island nonprofit hospital to for-profit in the course of three years, and it would allow the Health Department and the Attorney General to impose any or all of a number of conditions on any hospital conversion. Those conditions include keeping the hospital open for at least a specified length of time, committing to a minimum investment to protect the assets and financial health of the hospital, maintaining a local governing board, contributing financially to state health planning and to primary care in community the hospital serves, and restrictions on financial incentives for patients to receive hospital care outside the state. They can also include requirements that the hospital enter into only those contracts with affiliated entities that are reasonably necessary, that it report the amount of profit generated for the owners and that corporate allocations be consistent with fair-market value for services.
“The goal here is to be flexible, since every hospital’s situation is different, but to do what is in the interest of the public, public health and the strength of the community,” said Senator Picard. “Ultimately, regardless of whether they are for-profit or nonprofit, we want hospitals and to provide high-quality health care to the public and to employ local people.”
The legislation also makes changes aimed at streamlining the process of changing hospital ownership, such as reducing paperwork and shortening the application and review process from 180 days to 120 days. It also creates a new expedited review process limited to 90 days for distressed hospitals when the proposed applicants are nonprofit entities.
The bill also requires the existing Health Care Planning and Accountability Advisory Council to issue a report to the governor and General Assembly by March 2014 on Rhode Island’s hospital service needs and whether any further changes to the Hospital Conversion Act are necessary.
