- Committee -

SCS/SB 523 - This act is known as the Nonprofit Hospital Sale Act. It gives the Attorney General supervision over an acquisition of 20% or more of the assets of a nonprofit hospital, and any acquisition resulting in a 50% or greater interest in a nonprofit hospital. Specific rules are established for mergers and changes in governance structure so that hospitals will not discontinue health care services in a community (355.902).

APPLICATION - Any person or corporation making such an acquisition in a nonprofit hospital must first apply to the Attorney General (AG) and the Department of Health (DOH). The application shall include a copy of the acquisition agreement, a financial and economic analysis and any other relevant documents requested by the AG. (355.903)

HEALTH DEPT. - The DOH must publish notice of the application within 5 days in a local newspaper and shall notify individuals who have requested such notice. The DOH shall review the application with respect to: (1) continued access to health care in the community; (2) commitments to health care for the disadvantaged and uninsured; and (3) conflict of interest safeguards for patient referral. The DOH shall make a recommendation to the AG within 30 days after the AG decides to make a review. (355.906.1, 355.918)

ATTORNEY GENERAL - The AG has 15 days to decide whether to review the application and must approve or disapprove within 75 days after deciding to review. The AG shall hold at least one public hearing. The AG shall not approve the acquisition unless the value of the charitable assets are safeguarded and the proceeds are used for appropriate charitable health care purposes. Various factors are described for consideration by the AG. The AG may conditionally approve an application. A person with a legal interest in an involved hospital may obtain judicial review of the AG's decision. The AG's decision shall be approved unless there was an abuse of discretion. (355.906 - 355.915, 355.929)

The AG shall not create a barrier to an acquisition unless it is to promote the purposes explicitly stated in the hospital's charter. (355.930)

CONFLICTS OF INTEREST - The act limits conflicts of interest between the buyer and the hospital and between the buyer and any nonprofit charitable institution which may receive assets. (355.924)

ENFORCEMENT - Conditions are established for revocation or suspension of a hospital's license, such as failure to get approval under this act or failure to follow conflict of interest rules. (355.921, 355.927)

EMERGENCY - The act has an emergency clause.

MICHAEL HOEFERKAMP