2018 -- H 8245

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LC005790

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO HEALTH AND SAFETY -- HOSPITAL CLOSURE TRANSITION ACT

     Introduced By: Representatives Messier, Johnston, Tobon, and Coughlin

     Date Introduced: May 25, 2018

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby

amended by adding thereto the following chapter:

CHAPTER 17.28

HOSPITAL CLOSURE TRANSITION ACT

     23-17.28-1. Short title.

     This chapter shall be known and may be cited as the "Hospital Closure Transition Act".

     23-17.28-2. Findings.

     The general assembly finds and declares that:

     (1) Hospital closures, while rare, are most likely to occur when the cost of care

perennially outpaces reimbursement for that care, such as in communities with large uninsured or

governmentally insured populations;

     (2) Hospital closures reduce access to health care, particularly for uninsured and

underinsured populations;

     (3) Hospital closures disrupt the local workforce and significantly strain local economies;

     (4) Existing hospitals have the potential to reduce the negative effects of hospital closures

by redesigning their models of care to serve the affected communities directly in lower cost

settings.

     23-17.28-3. Legislative purpose.

     The purpose of this chapter is to:

     (1) Promote access to affordable health care in affected communities;

     (2) Ameliorate the social and economic impact that hospital closures have upon affected

communities;

     (3) Reduce job losses resulting from hospital closures; and

     (4) Encourage investment in alternative health care models.

     23-17.28-4. Definitions.

     As used in this chapter:

     (1) "Affected community" means any city or town within the state wherein a closed

hospital is physically located and/or those cities and towns whose inhabitants are regularly served

by the existing hospital;

     (2) "Closed hospital" means a hospital that has applied to the department to eliminate all

or significantly all of its hospital-based emergency department or primary care services, pursuant

to chapter 17.14 of title 23, has received the department's approval to eliminate all or significantly

all of its hospital-based emergency department or primary care services, and has, in fact,

eliminated all or significantly all of its hospital-based emergency department or primary care

services;

     (3) "Department" means the department of health.

     (4) "Hospital" means a person or governmental entity licensed in accordance with chapter

17 of this title to establish, maintain and operate a hospital;

     23-17.28-5. Acquisition of assets of a closed hospital by an existing hospital --

Transactions exempt from review.

     (a) The transactions related to the acquisition of assets of a closed hospital shall not be

subject to review by the department under the "hospital conversions act"; provided, that such

acquisition of assets is finalized within twenty-four (24) months of the department's approval to

close all or significantly all of the hospital-based emergency department or primary care services

of the closed hospital.

     (b) The transactions related to the acquisition of assets of a closed hospital shall not be

subject to review by the department as a change of owner, operator, or lessee under chapter 17 of

this title; provided, that the acquisition of assets is finalized within twenty-four (24) months of the

department's approval to close all or significantly all of the hospital-based emergency department

or primary care services of the closed hospital.

     (c) The transactions related to the acquisition of assets of a closed hospital shall not be

subject to a determination of need review by the department under chapter 17 of this title;

provided, that the acquisition of assets is finalized within twenty-four (24) months of the

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department's approval to close all or significantly all of the hospital-based emergency department

or primary care services of the closed hospital.

     23-17.28-6. Hospital license extended.

     A hospital acquiring the assets of a closed hospital may expand the provision of health

care services, such as provider-based emergency department services as defined by Medicare,

intensive care services, cardiac care services, including diagnostic cardiac catheterization

services, and any other hospital-based services provided by the closed hospital at any time during

the immediate sixty (60) months prior to its closure, for the benefit of the affected community

using the closed hospital as a satellite service location under the acquiring hospital's existing

license, subject to the department's inspection of the premises. The expansion shall not be subject

to a determination of need review by the department under chapter 17 of this title.

     23-17.28-7. Sales and use tax exemption.

     Notwithstanding any provision of title 44 of the general or public law to the contrary, no

hospital acquiring the assets of a closed hospital for the purpose of maintaining a satellite service

location shall be required to pay or otherwise be financially responsible for any Rhode Island

sales and use taxes that might otherwise be due in connection with any purchases, capital

improvements, or any other activities conducted by the hospital in the city or town in which the

closed hospital is located.

     23-17.28-8. Severability.

     If any provision of this chapter or its application to any person or circumstance is held

invalid, the invalidity shall not affect other provisions or applications of this chapter which can be

given effect without the invalid provision or application, and for this purpose the provisions of

this chapter are severable.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HEALTH AND SAFETY -- HOSPITAL CLOSURE TRANSITION ACT

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     This act would facilitate the acquisition of a closed hospital's assets by an existing

hospital by exempting acquisition of the assets from the requirements of the "hospital conversions

act" and the "health care facilities licensing act" if the acquisition of assets is finalized within

twenty-four (24) months of the department of health's approval to close all or significantly all of

the hospital-based emergency department or primary care services.

     The act would also permit a hospital acquiring the assets of a closed hospital to expand

the health care services provided by the closed hospital during the sixty (60) months prior to its

closure by using the closed hospital as a satellite service location. Finally, this act would provide

that a hospital acquiring the assets of a closed hospital for the purpose of maintaining a satellite

service location would not be required to pay Rhode Island sales and use taxes associated with

purchase, capital improvements and any other activities conducted in the city or town in which

the closed hospital is located.

     This act would take effect upon passage.

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