Two more jurisdictions last week tightened their oversight of not-for-profit hospital sales, while a third appeared poised to pass a similar law.
At least seven states have already placed similar laws on the books.
Late last month, the Rhode Island House of Representatives passed a bill that makes for-profit companies wait three years before acquiring a second hospital in the state. The bill previously passed the Senate.
The bill is targeted at Columbia/HCA Healthcare Corp.'s proposed acquisition of Roger Williams Medical Center in Providence. The state has 11 acute-care hospitals.
Rhode Island Gov. Lincoln Almond has said he will veto the bill, but strong legislative support for it could lead to an override.
In New Hampshire, Gov. Jeanne Shaheen last week signed a law requiring trustees to certify that certain standards are met in deals involving the transfer of control of more than 25% of a charitable trust's assets. The new law applies to both for-profit and not-for-profit organizations.
Among other provisions, trustees must certify compliance with extensive due-diligence requirements, including use of outside experts in negotiating terms and an assessment of community needs. They also must certify that conflicts of interest were disclosed and a fair value was received for the assets.
Meanwhile, the District of Columbia Council last week passed legislation under which its corporation counsel, the equivalent of an attorney general, would review deals between for-profits and not-for-profits. The bill must be signed by district Mayor Marion Barry.
That proposal was prompted by the pending sale of 80% of 346-bed George Washington University Hospital to for-profit Universal Health Services, King of Prussia, Pa.
One last-minute amendment to the bill would extend to five years from two years the time a new hospital owner would have to maintain the same level of care to the poor as the previous owner provided.
Another provision would require not-for-profits, when sold, to pay 10% of what their property taxes would have been for the previous five years if they had been for-profits.
-With Jonathan Gardner
