HARTFORD — It came down to the final hours before the legislative session ended May 7, but legislators tackled one of the most complex, controversial issues of the just-concluded legislative session by passing a measure that makes it easier for nonprofit hospitals to convert to for-profits and adds state oversight to hospital sales and transactions involving physician practices.

The bill, the subject of intense lobbying by hospitals and unions representing health care workers, was then headed to Gov. Dannel P. Malloy, whose administration was among several groups involved in crafting the measure.

If signed by the governor, the bill could clear the way for hospitals in Waterbury, Bristol, Manchester and Vernon to be acquired by Tenet Healthcare, a national for-profit company.

The bill makes changes in three areas:

• It removes a barrier in existing law that makes it difficult for for-profit hospitals to operate in Connecticut;

• It expands state oversight on the sale of nonprofit hospitals;

• It gives the state significantly more oversight over transactions involving physician practices.

One of the major issues legislators sought to tackle this session is the ability of nonprofit hospitals to convert to for-profits. It’s a complex and highly charged issue. Here's what you need to know.

House Speaker J. Brendan Sharkey (D-88) of Hamden expressed reservations about a controversial proposal that would impose a moratorium on nonprofit hospitals becoming for-profit.

Current state law doesn’t ban for-profit hospitals outright, but the legal structure that allows hospitals to employ doctors while avoiding anti-kickback requirements — known as a medical foundation — is only available to nonprofits. Tenet developed a workaround that it believed would allow it to operate for-profit hospitals in the state, but it wasn’t certain to pass legal scrutiny.

The bill legislators passed May 7 changes state law to allow for-profits to establish medical foundations.


But it also gives the state more authority in determining whether to approve the sale of a nonprofit hospital.

For a sale to be approved, the public health commissioner would have to determine that the affected community “will be assured of continued access to high quality and affordable health care” — after accounting for any proposed changes that affect hospital staffing. That’s in addition to criteria the commissioner already must use.

The hospital and purchaser would have to hold a public hearing in the town or city where the hospital is located.

And the public health commissioner and attorney general would be allowed to place “any conditions” on the approval of a hospital sale.

The bill also gives the state significant new authority over transactions involving physician practices.

Physician practices with eight or more full-time doctors would have to get state approval — known as a certificate of need — if they want to transfer ownership to a hospital or another organization, unless it’s another physician practice. Hospitals are already required to get a certificate of need to open facilities or terminate services, but physician practices generally haven’t been subject to the process.

The criteria for issuing a certificate of need would also be expanded to include consideration of whether the proposal would negatively impact the diversity of health care providers and patient choice in an area, and whether any consolidation that occurs would adversely affect health care costs or access to care.



This article originally was published in CTMirror.com, where it may be read in its entirely.