The rush by states to keep tabs on not-for-profit hospital sales has hit such a pace that even Kentucky -- a birthplace of for-profit healthcare -- is considering a change in its laws.
At deadline, the Kentucky Legislature was considering a bill that could give the state attorney general veto power over deals when a for-profit company wants to acquire at least 20% of a not-for-profit healthcare facility, including hospitals, nursing homes and clinics.
The KHA, an association of Kentucky hospitals and health systems, opposes the measure.
The association is concerned about the attorney general's having sole discretion over the deals.
"We feel that really takes away the focus of local control," said Carol Ormay, vice president of membership services at the KHA.
But the bill has become such a hot potato that amendments to it are flying. One suggested change would restrict the approval process to only hospital transactions, and another would make all hospital deals subject to review whether they involve for-profit or not-for-profit companies. Yet another would remove the attorney general from the approval process.
There also have been attempts in committee to kill the bill because of behind-the-scenes lobbying by for-profit companies. About one-quarter of the state's acute-care hospitals are for-profit (See box). Kentucky is also home to Humana and once was the headquarters of Columbia/HCA Healthcare Corp.
"A lot of people wanted to kill (the legislation)," said Rep. Gross Lindsay, a Democrat from Henderson who sponsored it. The bill still has to survive a vote of the House and then go on to the state Senate.
Ormay said the KHA favors a bill that would put both for-profit and not-for-profit companies under scrutiny when making acquisitions. The association represents both forms of hospital ownership.
Under the proposed bill, the attorney general must hold a public hearing on the proposed transaction. The for-profit company also must submit a health services plan that details the level of indigent care and other services that will be provided by the facility for at least five years after the acquisition.
Attorney General Ben Chandler is pushing for the bill. "The number of conversions has increased nationally tremendously; that alone is what generated the attorney general's interest," said Jennifer Schaaf, Chandler's spokeswoman.
So far this year, more than 80 bills aimed at regulating the sales of not-for-profit facilities are pending in 31 state legislatures, according to the National Conference of State Legislatures (March 2, p. 37).