General Assembly passes changes to strengthen Hospital Conversion Act

THE GENERAL ASSEMBLY passed a bill that alters the Hospital Conversions Act to extend review of hospital acquisitions. / PBN FILE PHOTO/NICOLE DOTZENROD
THE GENERAL ASSEMBLY passed a bill that alters the Hospital Conversions Act to extend review of hospital acquisitions. / PBN FILE PHOTO/NICOLE DOTZENROD

PROVIDENCE – A bill passed by the General Assembly over the weekend amends the Hospital Conversions Act to increase oversight time for hospital conversions undertaken by both nonprofit and for-profit entities.

Previously, for-profits that acquired Rhode Island hospitals were subject to oversight for three years and faced fines of up to $1 million for failure to comply with that scrutiny. Nonprofit combinations were not subject to those conditions.

Under the legislation, nonprofit conversions are subject to the same rules as those involving for-profit entities, but the scrutiny and fines have been increased. Going forward, any conversion will be subject to monitoring for five years, with failure to comply punishable by fines of up to $2 million.

The bill was a response to the St. Joseph pension crisis following the acquisition of Roger Williams Hospital and Fatima Hospital by Prospect Medical Holdings Inc., the assembly said, and was requested by R.I. Attorney General Peter F. Neronha.

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“This legislation will help prevent what happened with the St. Joseph’s Health Services pension plan from ever happening again in Rhode Island,” said Senate President Dominick J. Ruggerio. “Extended monitoring will provide the necessary increased oversight, while stiffer penalties will work to ensure those who don’t comply with the law are held accountable.”

The extended review requires acquirers to pay for monitoring and to submit reports to the attorney general, and be subject to R.I. Department of Health monitoring, which checks for compliance of an acquirer’s conditions for approval.

“The passage of these amendments to the Hospital Conversion Act ensures that the Office of the Attorney General, as well as the Department of Health, have the legal and financial tools necessary to adequately monitor and enforce our conditions in future transactions,” said Neronha in prepared remarks.

RIDOH said that the bill will simplify judicial provisions of hospital conversions.

“We supported it because it would strengthen RIDOH’s ability to monitor and enforce compliance with respect to conditions of approval,” said RIDOH spokesman Joseph Wendelken.