General Assembly Raised Bill No. 5571
February Session, 2014 LCO No. 2576
*02576_______PH_*
Referred to Committee on PUBLIC HEALTH
Introduced by:
(PH)
General Assembly
Raised Bill No. 5571
February Session, 2014
LCO No. 2576
*02576_______PH_*
Referred to Committee on PUBLIC HEALTH
Introduced by:
(PH)
AN ACT CONCERNING CERTIFICATE OF NEED REQUIREMENTS, HOSPITAL CONVERSIONS AND MEDICAL FOUNDATIONS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subsection (a) of section 19a-638 of the 2014 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):
(a) A certificate of need issued by the office shall be required for:
(1) The establishment of a new health care facility;
(2) A transfer of ownership of a health care facility;
(3) The establishment of a freestanding emergency department;
(4) The termination of inpatient or outpatient services offered by a hospital, including, but not limited to, the termination by a short-term acute care general hospital or children's hospital of inpatient and outpatient mental health and substance abuse services;
(5) The establishment of an outpatient surgical facility, as defined in section 19a-493b, or as established by a short-term acute care general hospital;
(6) The termination of surgical services by an outpatient surgical facility, as defined in section 19a-493b, or a facility that provides outpatient surgical services as part of the outpatient surgery department of a short-term acute care general hospital, provided termination of outpatient surgical services due to (A) insufficient patient volume, or (B) the termination of any subspecialty surgical service, shall not require certificate of need approval;
(7) The termination of an emergency department by a short-term acute care general hospital;
(8) The establishment of cardiac services, including inpatient and outpatient cardiac catheterization, interventional cardiology and cardiovascular surgery;
(9) The acquisition of computed tomography scanners, magnetic resonance imaging scanners, positron emission tomography scanners or positron emission tomography-computed tomography scanners, by any person, physician, provider, short-term acute care general hospital or children's hospital, except as provided for in subdivision (22) of subsection (b) of this section;
(10) The acquisition of nonhospital based linear accelerators;
(11) An increase in the licensed bed capacity of a health care facility;
(12) The acquisition of equipment utilizing technology that has not previously been utilized in the state;
(13) An increase of two or more operating rooms within any three-year period, commencing on and after October 1, 2010, by an outpatient surgical facility, as defined in section 19a-493b, or by a short-term acute care general hospital; [and]
(14) The termination of inpatient or outpatient services offered by a hospital or other facility or institution operated by the state that provides services that are eligible for reimbursement under Title XVIII or XIX of the federal Social Security Act, 42 USC 301, as amended; and
(15) The termination of inpatient or outpatient reproductive services offered by a hospital or other facility or institution operated in the state.
Sec. 2. Subsection (a) of section 19a-486c of the 2014 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) The Attorney General shall deny an application as not in the public interest if the Attorney General determines that one or more of the following conditions exist: (1) The transaction is prohibited by Connecticut statutory or common law governing nonprofit entities, trusts or charities; (2) the nonprofit hospital failed to exercise due diligence in (A) deciding to transfer, (B) selecting the purchaser, (C) obtaining a fairness evaluation from an independent person expert in such agreements, or (D) negotiating the terms and conditions of the transfer; (3) the nonprofit hospital failed to disclose any conflict of interest, including, but not limited to, conflicts of interest pertaining to board members, officers, key employees and experts of the hospital, the purchaser or any other party to the transaction; (4) the nonprofit hospital will not receive fair market value for its assets, which, for purposes of this subsection, means the most likely price that the assets would bring in a sale in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably and in their own best interest, and with a reasonable time being allowed for exposure in the open market; (5) the fair market value of the assets has been manipulated by any person in a manner that causes the value of the assets to decrease; (6) the financing of the transaction by the nonprofit hospital will place the nonprofit hospital's assets at an unreasonable risk; (7) any management contract contemplated under the transaction is not for reasonable fair value; (8) a sum equal to the fair market value of the nonprofit hospital's assets (A) is not being transferred to one or more persons to be selected by the superior court for the judicial district where the nonprofit hospital is located who are not affiliated through corporate structure, governance or membership with either the nonprofit hospital or the purchaser, unless the nonprofit hospital continues to operate on a nonprofit basis after the transaction and such sum is transferred to the nonprofit hospital to provide health care services, and (B) is not being used for one of the following purposes: (i) For appropriate charitable health care purposes consistent with the nonprofit hospital's original purpose, (ii) for the support and promotion of health care generally in the affected community, or (iii) with respect to any assets held by the nonprofit hospital that are subject to a use restriction imposed by a donor, for a purpose consistent with the intent of said donor; or (9) the nonprofit hospital or the purchaser has failed to provide the Attorney General with information and data sufficient to evaluate the proposed agreement adequately, provided the Attorney General has notified the nonprofit hospital or the purchaser of the inadequacy of the information or data and has provided a reasonable opportunity to remedy such inadequacy. In considering the fair market value of assets of a nonprofit hospital under this subsection, the Attorney General shall consider the moneys that the nonprofit hospital would have paid to the municipality if not for the payment in lieu of taxes pursuant to section 12-20a.
Sec. 3. Section 33-182aa of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):
As used in this chapter:
(1) "Certificate of incorporation" means a certificate of incorporation, as defined in section 33-1002, or any predecessor statute thereto;
(2) "Hospital" means a nonstock corporation organized under chapter 602, or any predecessor statute thereto, or by special act and licensed as a hospital pursuant to chapter 368v;
(3) "Health system" means a nonstock corporation organized under chapter 602, or any predecessor statute thereto, consisting of a parent corporation of one or more hospitals licensed pursuant to chapter 368v, and affiliated through governance, membership or some other means;
(4) "Medical school" means a school of allopathic medicine leading to the M.D. degree, accredited by the Liaison Committee on Medical Education, and affiliated through governance with or part of a university that is either incorporated in this state or established pursuant to any provision of the general statutes and accredited by the New England Association of Schools and Colleges Commission on Institutions of Higher Education; and
(5) "Provider" means a physician licensed under chapter 370. [, a chiropractor licensed under chapter 372, an optometrist licensed under chapter 380 or a podiatrist licensed under chapter 375.]
This act shall take effect as follows and shall amend the following sections:
Section 1 October 1, 2014 19a-638(a)
Sec. 2 from passage 19a-486c(a)
Sec. 3 October 1, 2014 33-182aa
This act shall take effect as follows and shall amend the following sections:
Section 1
October 1, 2014
19a-638(a)
Sec. 2
from passage
19a-486c(a)
Sec. 3
October 1, 2014
33-182aa
Statement of Purpose:
To require a certificate of need for the termination of reproductive services, to require the Attorney General, in making a determination on a hospital conversion, to consider certain assets of a nonprofit hospital and to change the definition of provider for purposes of provisions concerning medical foundations.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]