DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 317 Original 2025 Regular Session Echols
Abstract: Prohibits certain acts by lessor healthcare facility owners and lessee healthcare facility
operators and establishes penalties including personal liability for hospital executives and
board members for certain acts.
Proposed law defines terms.
Proposed law establishes that a healthcare facility owned by a private entity enters into financial
distress when the facility fails to pay its employees for 30 days, experiences a closure or a significant
reduction in inpatient or emergency services, or files for bankruptcy.
Proposed law states that if a facility experiences financial distress, the entity that owns the hospital
shall provide funds sufficient for the facility to operate for 12 months, reimburse the state for any
emergency funds expended to keep the facility operational, and provide detailed financial disclosures
of any funds received by the facility in the previous five years.
Proposed law states that if a lessee facility experiences financial distress due to unreasonable lease
terms, over-leveraging, or financial extractions, the board members and executive officers shall be
personally liable for the following:
(1)Repayment of funds removed from the lessee facility in the five-year period before the
financial distress.
(2)Civil penalties up to $250,000 per board member for knowingly engaging in activities that
contributed to the financial distress.
(3)Disqualification from serving on the board of any healthcare facility licensed in this state for
10 years.
Proposed law states that a lessee facility operator is prohibited from using funds from Medicaid,
Medicare, or other state-funded emergency grants to fulfill lease payments.
Proposed law provides that if a court determines that prohibited funds are used to pay lease
obligations, the court shall award damages equal to triple the actual damages.
Proposed law states that the attorney general may investigate and, if a violation is found, may bring
a civil action against the violating entity. Proposed law states that the attorney general or a district attorney for the parish in which the lessee
facility is located may bring a cause of action for a violation of proposed law.
Proposed law provides that the attorney general or a district attorney may seek and the court may
grant a legal action to preserve the availability of the personal assets of the executive officers and
board members of the lessor entity.
Proposed law provides that venue is proper in the Nineteenth Judicial District in the parish of East
Baton Rouge, or the district court of the parish where the lessee facility is domiciled.
Proposed law provides that upon the petition of the attorney general or district attorney, the court
may take a rule to show cause why the executives and board members of the lessor facility should
not be held personally liable. Proposed law further provides that the hearing to show cause shall
be held not more than 30 days from the date the motion is filed.
Proposed law provides that any individual who, in good faith, reports misconduct or provides
material evidence of violation of proposed law is immune from civil liability, retaliation, or adverse
employment action.
Proposed law provides that if the court awards damages or assesses a civil penalty, the funds shall
be collected by the attorney general.
(Adds R.S. 40:2120.81- 2120.85)