July 21, 2018

Marshall bill would make vetting process stronger for hospital acquisitions proposals from neighboring states

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State House – Rep. Kenneth A. Marshall is sponsoring legislation to make the state review process more thorough for hospital acquisitions and mergers involving hospital systems from states adjacent to Rhode Island.
The bill is meant to ensure that the hospital merger and acquisition process considers the potential effects such acquisitions could have on health insurance premiums and other aspects of health care for Rhode Islanders. It is intended to address the proposed acquisition of the Care New England network by Massachusetts Partners HealthCare.
“My legislation is meant to make certain that the Health Department does extensive diligence before we have a seismic shift in the infrastructure of our state,” said Representative Marshall (D-Dist. 68, Bristol, Warren). “Health care is changing quickly. Hospital systems are becoming regional and national entities. Financial interests and decisions are happening less frequently with local interests at the core. Our state is trying to build an integrated care system that, yes, is a tremendous jobs engine, but more importantly, keeps access to quality care affordable and available in our neighborhoods.”
The legislation (2018-H 7963) adds a number of criteria that must be considered by the Department of Health when making a determination on whether to permit a hospital system from an adjacent state to acquire a hospital in Rhode Island, provided that system is not already operating any hospitals here. The list includes whether the acquisition will result in an increase or decrease in specialty services, potential migration of Rhode Island patients to out-of-state hospitals, job losses, costs to the state’s Medicaid program, increases or decreases of health insurance premiums, changes to available funds for medical research, innovation and academic activities and any other potential changes to patient care.
The bill would also eliminate the option of an expedited review for such proposals.
The legislation had a hearing April 11 before the House Health, Education and Welfare Committee, where the Rhode Island Business Coalition, the Rhode Island Public Expenditure Council and Brown University testified in support of it.
Representative Marshall said the review system must be very comprehensive because the stakes are very high.
“This is not a simple real estate deal or business transaction. This is a decision that is at the center of what our strategy will be to continue to grow our economy, lead in academic research, enhance workforce development and provide care. The state, as one of the largest purchasers of health care services, has its own budgetary considerations as well. No review or question should be unanswered on a decision of this magnitude,” said Representative Marshall.
He also pointed out in his testimony for the bill that employees and retirees of Our Lady of Fatima Hospital and the former St. Joseph’s Hospital were left with a severely underfunded pension system following a 2014 merger that did not properly fund pension obligations. Representative Marshall plans to submit an amendment to his bill that would add a pension review by the state treasurer’s office as another requirement for such mergers.
The bill is cosponsored by Rep. Daniel P. McKiernan (D-Dist. 7, Providence), Rep. Raymond H. Johnston Jr. (D-Dist. 61, Pawtucket), Rep. William W. O’Brien (D-Dist. 54, North Providence) and Rep. John J. Edwards (D-Dist. 70, Tiverton, Portsmouth). The legislation (2018-S 2794) has been submitted in the Senate by Sen. Louis P. DiPalma (D-Dist. 12, Middletown, Newport, Tiverton, Little Compton).

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