Bill Text: MS HB1010 | 2021 | Regular Session | Introduced


Bill Title: Hospitals; authorize cooperative agreements among that are regulated and immune from antitrust laws.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2021-02-02 - Died In Committee [HB1010 Detail]

Download: Mississippi-2021-HB1010-Introduced.html

MISSISSIPPI LEGISLATURE

2021 Regular Session

To: Public Health and Human Services

By: Representative McGee

House Bill 1010

AN ACT TO AMEND SECTIONS 41-9-301 THROUGH 41-9-307, 41-9-309 AND 41-9-311, MISSISSIPPI CODE OF 1972, TO AMEND THE RURAL HEALTH AVAILABILITY ACT TO EXPAND ITS APPLICATION TO INCLUDE ALL HOSPITALS IN THE STATE; TO CHANGE THE NAME OF THE ACT TO THE "MISSISSIPPI HOSPITALS HEALTH AVAILABILITY ACT"; TO PROVIDE LEGISLATIVE FINDINGS THAT THE ALLOWING COOPERATION AMONG ALL HOSPITALS CAN IMPROVE THE QUALITY OF HEALTH CARE IN MISSISSIPPI, AND STATING THAT IT IS THE POLICY OF THE STATE TO DISPLACE COMPETITION AMONG HOSPITALS IN CERTAIN INSTANCES WITH REGULATION AND SUPERVISION OF THAT REGULATION IN ORDER TO PROMOTE COOPERATION AND COORDINATION AMONG HOSPITALS AND TO PROVIDE STATE ACTION IMMUNITY FROM FEDERAL AND STATE ANTITRUST LAWS TO HOSPITALS THAT ARE ISSUED A CERTIFICATE OF PUBLIC ADVANTAGE UNDER THE ACT; TO AUTHORIZE ALL HOSPITALS OR ANY COMBINATION THEREOF TO NEGOTIATE AND ENTER INTO COOPERATIVE AGREEMENTS, SUBJECT TO RECEIPT OF A CERTIFICATE OF PUBLIC ADVANTAGE GOVERNING THE AGREEMENT AS PROVIDED IN THE ACT; TO PROVIDE THAT THE STATE DEPARTMENT OF HEALTH SHALL APPROVE A PROPOSED COOPERATIVE AGREEMENT AND ISSUE A CERTIFICATE OF PUBLIC ADVANTAGE FOR A COOPERATIVE AGREEMENT IF IT DETERMINES THAT THE BENEFITS OUTWEIGH THE DISADVANTAGES LIKELY TO RESULT FROM A REDUCTION IN COMPETITION FROM THE AGREEMENT; TO SPECIFY ADDITIONAL FACTORS THAT THE DEPARTMENT SHALL CONSIDER IN EVALUATING THE POTENTIAL BENEFITS OF A COOPERATIVE AGREEMENT; TO PROVIDE THAT IF THE DEPARTMENT HAS REASON TO BELIEVE THAT COMPLIANCE WITH A COOPERATIVE AGREEMENT NO LONGER MEETS THE REQUIREMENTS OF THIS ACT, IT SHALL INITIATE A PROCEEDING TO DETERMINE WHETHER COMPLIANCE WITH THE COOPERATIVE AGREEMENT NO LONGER MEETS THE REQUIREMENTS OF THE ACT; TO DIRECT THE STATE BOARD OF HEALTH TO ADOPT RULES REGARDING THE MONITORING, SUPERVISION AND OVERSIGHT OF COOPERATIVE AGREEMENTS APPROVED UNDER THE ACT; TO PROVIDE THAT NOTHING IN THE ACT EXEMPTS HOSPITALS FROM COMPLIANCE WITH THE PROVISIONS OF THE COMMUNITY HOSPITALS LAWS; TO CREATE NEW SECTION 41-9-308, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT IF AN APPLICANT FOR OR HOLDER OF A CERTIFICATE OF PUBLIC ADVANTAGE BELIEVES THAT MATERIALS REQUIRED TO BE SUBMITTED TO THE DEPARTMENT CONTAIN PROPRIETARY INFORMATION, THAT INFORMATION MUST BE CLEARLY IDENTIFIED AND SHALL NOT BE SUBJECT TO DISCLOSURE, INSPECTION, EXAMINATION, COPYING OR REPRODUCTION UNDER THE MISSISSIPPI PUBLIC RECORDS ACT; AND FOR RELATED PURPOSES.

     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

     SECTION 1.  Section 41-9-301, Mississippi Code of 1972, is amended as follows:

     41-9-301.  Sections 41-9-301 through 41-9-311 shall be known and may be cited as the " * * *Rural Mississippi Hospitals Health Availability Act."

     SECTION 2.  Section 41-9-303, Mississippi Code of 1972, is amended as follows:

     41-9-303.  The Legislature finds and declares the following:

          (a)  In rural areas, access to health care is limited and the quality of health care is adversely affected by inadequate reimbursement and collection rates and difficulty in recruiting and retaining skilled health professionals.

          (b)  There is limited, if any, overlap in the geographic service areas of Mississippi rural hospitals.

          (c)  Rural hospitals' financial stability is threatened by patient migration to general acute care and specialty hospitals in urban areas.

          (d)  The availability of quality health care in rural areas is essential to the economic and social viability of rural communities.

          (e)  Cooperative agreements among rural hospitals and, where desired, between and among rural hospitals and other hospitals would improve the availability and quality of health care for Mississippians in rural areas and enhance the likelihood that rural hospitals can remain open.

          (f)  There is also a recognized need for improved health care services for all Mississippians.  A certificate of public advantage between and among hospitals in general can improve the quality of health care for Mississippians.
          (g)  Access to health care in rural areas of our state is also influenced, in many instances, by the financial health of hospitals in nonrural areas; therefore, the provisions of this act should be extended to all hospitals and any combinations thereof in our state.
          (h)  It is the policy of this state, in certain instances, to displace competition among hospitals with regulation to the extent set forth in this act and to actively supervise that regulation to the fullest extent required by law, in order to promote cooperation and coordination among hospitals in the provision of health services and to provide state action immunity from federal and state antitrust laws to the fullest extent possible to those hospitals that are issued a certificate of public advantage under this act.

     SECTION 3.  Section 41-9-305, Mississippi Code of 1972, is amended as follows:

     41-9-305.  For the purposes of Sections 41-9-301 through 41-9-311, the following terms shall have the following meanings:

          (a)  "Act" means the Rural Health Availability Act.

          (b)  "Affected person," with respect to any application for a certificate of public advantage, means:

              (i)  The applicant(s);

              (ii)  Any person residing within the geographic service area of an applicant;

              (iii)  Health care purchasers who reimburse health care facilities located in the geographic service area of an applicant;

              (iv)  Any other person furnishing goods or services to, or in competition with, an applicant; or

              (v)  Any other person who has notified the department in writing of his interest in applications for certificates of public advantage and has a direct economic interest in the decision. 

     Notwithstanding the foregoing, * * *persons from other states a person who is a resident of or has their principal place of business in another state who would otherwise be considered an "affected * * *persons person" * * *are is not included in the meaning of the term, unless that other state provides for similar involvement of persons from Mississippi in a similar process in that state.

          (c)  "Board" means the State Board of Health established under Section * * *41‑3‑1 41-31.1.

          (d)  "Certificate of public advantage" means the formal written approval, including any conditions or modifications of a cooperative agreement by the department.

          (e)  "Cooperative agreement" means a contract, business or financial arrangement, or any other activities or practices among two (2) or more rural hospitals, other hospitals or any combination thereof for the sharing, allocation, or referral of patients; the sharing or allocation of personnel, instructional programs, support services and facilities, medical, diagnostic or laboratory facilities, procedures, equipment or other health care services; the acquisition or merger of assets among or by two (2) or more rural hospitals, other hospitals or any combination thereof, including agreements to negotiate jointly with respect to price or other competitive terms with suppliers.  The term "cooperative agreement" includes any amendments thereto with respect to which a certificate of public advantage has been issued or applied for or with respect to which a certificate of public advantage is not required, unless the context clearly requires otherwise.

          (f)  "Department" means the State Department of Health created under Section 41-3-15.

          (g)  "Hospital" has the meaning set forth in Section 41-9-3.

          (h)  "Person" means an individual, a trust or estate, partnership, corporation, the state or a political subdivision or instrumentality of the state.

         ( * * *hi"Rural area" means an area with a population density of less than one hundred (100) individuals per square mile; a municipality or county with a population of less than seven thousand five hundred (7,500) individuals; or an area defined by the most recent United States Census as rural.

          ( * * *ij)  "Rural hospital" means a private or community hospital having at least one (1) but no more than seventy-five (75) licensed acute-care beds that is located in a rural area.

          ( * * *jk)  "State" means the State of Mississippi.

          ( * * *kl)  "State Health Officer" means the State Health Officer elected by the State Board of Health under Section * * *41‑3‑5 41-3-5.1.

     The use of a singular term in this section includes the plural of that term, and the use of a plural term in this section includes the singular of that term, unless the context clearly requires another connotation.

     SECTION 4.  Section 41-9-307, Mississippi Code of 1972, is amended as follows:

     41-9-307.  (1)  A * * *rural hospital and any corporation, partnership, joint venture or any other entity, all of whose principals are rural hospitals, other hospitals or any combination thereof may negotiate and enter into cooperative agreements with other such persons in the state, subject to receipt of a certificate of public advantage governing the agreement as provided in this act.  If the parties to a cooperative agreement file an application for a certificate of public advantage governing the agreement with the department, the conduct of the parties in negotiating and entering into a cooperative agreement is lawful conduct.

     (2)  Parties to a cooperative agreement may apply to the department for a certificate of public advantage governing that cooperative agreement.  The application must include an executed written copy of the cooperative agreement and describe the nature and scope of the cooperation in the agreement and any consideration passing to any party under the agreement.  Within thirty (30) days of receipt of the application, the department may request additional information as may be necessary to complete the application.  The applicant has thirty (30) days from the date of the request to submit the additional information.  If the applicant fails to submit the requested information within the thirty-day period, or any extension of time granted by the department, the application is deemed withdrawn.  The department may require * * *an a reasonable application fee, set by regulation, from the submitting parties sufficient to cover the cost of processing the application.

     (3)  The department shall review the application in accordance with the standards set forth in subsection (4) of this section.  The department shall give notice of the application to members of the public who reside in the service areas of the applicant hospitals, which may be provided through newspapers of general circulation or public information channels.  If requested by an affected person within thirty (30) days of the giving of the public notice, the department may hold a public hearing in accordance with the rules adopted by the board.  The department shall grant or deny the application within sixty (60) days after receipt of a completed application or from the date of the public hearing, if one is held, and that decision, along with any conditions of approval, must be in writing and must set forth the basis for the decision.  The department may establish conditions for approval that are reasonably necessary to ensure that the cooperative agreement and the activities engaged under it are consistent with the intent of this act and to ensure that the activity is appropriately and actively supervised and regulated by the state.  The department shall furnish a copy of the decision to the applicants and any affected persons who have asked in writing to be notified.  If the department denies an application for a certificate of public advantage for an executed cooperative agreement, the cooperative agreement is void upon the decision of the department not to issue the certificate of public advantage. The parties to a void cooperative agreement may submit a new application for a certificate of public advantage based upon a cooperative agreement different from the original application.    

     (4)  The department shall approve a proposed cooperative agreement and shall issue a certificate of public advantage for a cooperative agreement if it determines that * * *: the benefits likely to result from the proposed cooperative agreement outweigh the disadvantages likely to result from a reduction in competition from the proposed cooperative agreement.

     (5)  In evaluating the potential benefits of a cooperative agreement, the department shall consider whether one or more of the following benefits may result from the cooperative agreement:

           (a)  Each of the parties to the cooperative agreement is a rural hospital or other hospital, or is a corporation, partnership, joint venture or other entity all of whose principals are * * * rural hospitals; and

 * * *(b)  The geographic service area of the rural hospitals who are parties to the agreement do not overlap significantly; and

          ( * * *cb)  The cooperative agreement * * * is likely tomay result in one or more of the following benefits:

              (i)  Enhancement of the quality of hospital and hospital-related care provided to Mississippi citizens;

              (ii)  Preservation of hospital facilities and health care in rural areas;

              (iii)  Gains in the cost-efficiency of services provided by the hospitals involved;

              (iv)  Encouragement of cost-sharing among the hospitals involved;

              (v)  Improvements in the utilization of hospital resources and equipment;  * * *or

              (vi)  Avoidance or reduction of duplication of hospital resources or expenses, including administrative expenses;

              (vii)  Demonstration of population health improvement in the region served according to criteria set forth in the cooperative agreement and approved by the department;
              (viii)  The extent to which medically underserved populations have access to and are projected to use the proposed services; or
              (ix)  Any other benefits that may be identified.

     ( * * *56A cooperative agreement for which a certificate of public advantage has been issued is a lawful agreement.  The department shall actively supervise, monitor and regulate agreements approved under this act and may request information whenever necessary to ensure that the agreements remain in compliance with the conditions of approval.  The department may charge an annual fee, set by regulation, to cover the cost of monitoring and regulating these agreements.  During the time the certificate is in effect, a report on the activities under the cooperative agreement must be filed with the department every two (2) years.  The department shall review the report in order to determine that the cooperative agreement continues to comply with the terms of the certificate of public advantage.

     ( * * *67If the department has reason to believe that compliance with a cooperative agreement no longer meets the requirements of this act, the department shall initiate a proceeding to determine whether compliance with the cooperative agreement no longer meets the requirements of this act.  In the course of such proceeding, the department is authorized to seek reasonable modifications to a cooperative agreement, with the consent of the parties to the agreement, in order to ensure that it continues to meet the requirements of this act.  The department shall revoke a certificate of public advantage by giving written notice to each party to a cooperative agreement with respect to which the certificate is being revoked, if it finds that:

          (a)  The cooperative agreement or activities undertaken by it are not in substantial compliance with the terms of the application or the conditions of approval;

          (b)  The likely benefits resulting from the cooperative agreement no longer exist; or

          (c)   The department's approval was obtained as a result of intentional material misrepresentation to the department or as the result of coercion, threats or intimidation toward any party to the cooperative agreement.

     The certificate of public advantage shall remain in full force and effect until such time as the certificate of public advantage holder has submitted, the department has approved, and the certificate holder has completed a plan of separation. The department's active supervision shall continue until such time as the department issues an official determination that the plan of separation has been completed.

     ( * * *78)  The department shall maintain on file all cooperative agreements for which certificates of public advantage remain in effect.  A party to a cooperative agreement who terminates or withdraws from the agreement shall notify the department within fifteen (15) days of the termination or withdrawal.  If all parties terminate their participation in the cooperative agreement, the department shall revoke the certificate of public advantage for the agreement.

     ( * * *89)  The parties to a cooperative agreement with respect to which a certificate of advantage is in effect must notify the department of any proposed amendment to the cooperative agreement, including an amendment to add an additional party but excluding an amendment to remove or to reflect the withdrawal of a party, before the amendment takes effect.  The parties must apply to the department for a certificate of public advantage governing the amendment and the department shall consider and rule on the application in accordance with the procedures applicable to cooperative agreements generally.

     ( * * *910Within ninety (90) days after the effective date of House Bill No.    , 2021 Regular Session, the * * * department mayboard shall promulgate rules and regulations in accordance with the Administrative Procedures Law as in effect from time to time to implement the provisions of this act, including any fees and application costs associated with the monitoring, supervision and oversight of cooperative agreements approved under this act.

     ( * * *1011)  A dispute among the parties to a cooperative agreement concerning its meaning or terms is governed by the principles of contract law or any other applicable law.

     SECTION 5.  The following shall be codified as Section 41-9-308, Mississippi Code of 1972:

     41-9-308.  If an applicant for or holder of a certificate of public advantage believes that materials required to be submitted to the department contain proprietary information, that information must be clearly identified.  Any materials required to be submitted to the department that are clearly identified as containing propriety information shall be deemed trade secrets or confidential commercial or financial information and shall not be subject to disclosure, inspection, examination, copying or reproduction under the Mississippi Public Records Act of 1983, Section 25-61-1 et seq.  The applicants or certificate holders shall submit duplicate copies of any materials containing proprietary information, one (1) with full information for the department's use and one (1) redacted copy available for release to the public.

     SECTION 6.  Section 41-9-309, Mississippi Code of 1972, is amended as follows:

     41-9-309.  Any applicant or holder of a certificate of public advantage aggrieved by a decision of the department under this act shall be entitled to judicial review thereof in the Circuit Court of Hinds County, First Judicial District.  In the review, the decision of the department shall be affirmed unless it is arbitrary, capricious, or it is not in compliance with this act.

     SECTION 7.  Section 41-9-311, Mississippi Code of 1972, is amended as follows:

     41-9-311.  Nothing in this act exempts hospitals from compliance with the provisions of Section 41-7-171 et seq. concerning certificates of need, and nothing in this act exempts hospitals from compliance with the provisions of Section 41-13-10 et seq. concerning community hospitals.

     SECTION 8.  This act shall take effect and be in force from and after July 1, 2021.


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