Bill Text: MS SB2892 | 2019 | Regular Session | Enrolled
Bill Title: Community hospitals; revise provisions regarding service area and proposed sale of.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2019-03-29 - Approved by Governor [SB2892 Detail]
Download: Mississippi-2019-SB2892-Enrolled.html
MISSISSIPPI LEGISLATURE
2019 Regular Session
To: Public Health and Welfare
By: Senator(s) Wiggins, DeBar, Jordan
Senate Bill 2892
(As Sent to Governor)
AN ACT TO AMEND SECTION 41-13-10, MISSISSIPPI CODE OF 1972, TO AMEND THE DEFINITION OF A COMMUNITY HOSPITAL SERVICE AREA TO INCLUDE AREAS OUTSIDE OF THE STATE; TO AMEND SECTION 41-13-15, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT WHEN AN OWNER OF A COMMUNITY HOSPITAL WISHES TO SELL THE HOSPITAL OR LEASE THE HOSPITAL WITH AN OPTION TO SELL IT, A PETITION REQUESTING AN ELECTION ON THE QUESTION OF WHETHER THE OWNER SHOULD PROCEED WITH THE PROCESS OF SEEKING PROPOSALS FOR THE SALE OR LEASE OF THE HOSPITAL MAY BE FILED WITH THE CLERK OF THE OWNER; TO PROVIDE THAT IF LESS THAN A MAJORITY OF THE VOTERS IN THE ELECTION VOTE IN FAVOR OF THE QUESTION, THEN THE OWNER IS NOT AUTHORIZED TO SELL OR LEASE THE HOSPITAL; TO PROVIDE THAT IF A MAJORITY OF THE VOTERS IN THE ELECTION VOTE IN FAVOR OF THE QUESTION, OR IF NO SUCH PETITION REQUESTING AN ELECTION IS TIMELY FILED WITH THE CLERK, THEN THE OWNER MAY SEEK PROPOSALS FOR THE SALE OR LEASE OF THE HOSPITAL AND MAY SELL OR LEASE THE HOSPITAL TO THE RESPONDENT SUBMITTING THE HIGHEST AND BEST PROPOSAL AFTER PUBLISHING NOTICE; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 41-13-10, Mississippi Code of 1972, is amended as follows:
41-13-10. For purposes of Sections 41-13-10 through 41-13-47, the following words shall have the meanings ascribed herein, unless the context otherwise requires:
(a) "Administrator" shall mean the chief administrative official and executive officer of a community hospital selected by the board of trustees of such community hospital.
(b) "Board of trustees" shall mean the board appointed pursuant to Section 41-13-29, to operate a community hospital.
(c) "Community hospital" shall mean any hospital, nursing home and/or related health facilities or programs, including, without limitation, ambulatory surgical facilities, intermediate care facilities, after-hours clinics, home health agencies and rehabilitation facilities, established and acquired by boards of trustees or by one or more owners which is governed, operated and maintained by a board of trustees.
(d) "Owner" shall mean any board of supervisors of any county having an ownership interest in any community hospital or leased facility on behalf of the county or on behalf of any supervisors district, judicial district or election district of the county and shall also mean any governing council or board of any municipality having an ownership interest in any community hospital or leased facility.
(e) "Leased facility" shall mean a hospital, nursing home or related health facilities which an owner has leased to an individual, partnership, corporation, other owner or board of trustees for a term not in excess of fifty (50) years, conditioned upon the facility continuing to operate on a nonprofit basis. A leased facility shall not be deemed or considered to be a community hospital except for purposes of Sections 41-13-19 through 41-13-25, and shall not be subject to the statutory requirements placed on community hospitals except to the extent as may be specifically required by the terms of the applicable lease agreement. However, in situations where another community hospital, acting through its board of trustees, is the lessee of a leased facility, the leased facility shall remain subject to this chapter and other laws applicable to community hospitals, except that the owners of the lessee shall have sole authority to appoint the board of trustees for the leased facility, which shall be the same board of trustees as appointed under Section 41-13-29 for the lessee community hospital.
(f) "Service area" means that area in which a community hospital may provide services and perform the activities in Section 41-13-35(5), as determined by a board of trustees by its patient origin studies, and may include areas outside of the State of Mississippi.
SECTION 2. Section 41-13-15, Mississippi Code of 1972, is amended as follows:
41-13-15. (1) Any county and/or any political or judicial subdivision of a county and/or any municipality of the State of Mississippi, acting individually or jointly, may acquire and hold real estate for a community hospital either recognized and/or licensed as such by either the State of Mississippi or the United States Government, and may, after complying with applicable health planning and licensure statutes, construct a community hospital thereon and/or appropriate funds according to the provisions of this chapter for the construction, remodeling, maintaining, equipping, furnishing and expansion of such facilities by the board of trustees upon such real estate.
(2) Where joint ownership of a community hospital is involved, the owners are hereby authorized to contract with each other for determining the pro rata ownership of such community hospital, the proportionate cost of maintenance and operation, and the proportionate financing that each will contribute to the community hospital.
(3) The owners may likewise contract with each other, or on behalf of any subordinate political or judicial subdivision, or with the board of trustees of a community hospital, and/or any agency of the State of Mississippi or the United States Government, for necessary purposes related to the establishment, operation or maintenance of community hospitals and related programs wherever located, and may either accept from, sell or contribute to the other entities, monies, personal property or existing health facilities. The owners or the board of trustees may also receive monies, property or any other valuables of any kind through gifts, donations, devises or other recognized means from any source for the purpose of hospital use.
(4) Owners and boards of trustees, acting jointly or severally, may acquire and hold real estate for offices for physicians and other health care practitioners and related health care or support facilities, provided that any contract for the purchase of real property must be ratified by the owner, and may thereon construct and equip, maintain and remodel or expand such offices and related facilities, and the board of trustees may lease same to members of the hospital staff or others at a rate deemed to be in the best interest of the community hospital.
(5) If any political or judicial subdivision of a county is obligated hereunder, the boundaries of such district shall not be altered in such a manner as to relieve any portion thereof of its obligation hereunder.
(6) Owners may convey to any other owner any or all property, real or personal, comprising any existing community hospital, including related facilities, wherever located, owned by such conveying owner. Such conveyance shall be upon such terms and conditions as may be agreed upon and may make such provisions for transfers of operating funds and/or for the assumption of liabilities of the community hospital as may be deemed appropriate by the respective owners.
(7) (a) Except as provided for in subsection (11) of this section, owners may lease all or part of the property, real or personal, comprising a community hospital, including any related facilities, wherever located, and/or assets of such community hospital, to any individual, partnership or corporation, whether operating on a nonprofit basis or on a profit basis, or to the board of trustees of such community hospital or any other owner or board of trustees, subject to the applicable provisions of subsections (8), (9) and (10) of this section. The term of such lease shall not exceed fifty (50) years. Such lease shall be conditioned upon (i) the leased facility continuing to operate in a manner safeguarding community health interests; (ii) the proceeds from the lease being first applied against such bonds, notes or other evidence of indebtedness as are issued pursuant to Section 41-13-19 as and when they are due, provided that the terms of the lease shall cover any indebtedness pursuant to Section 41-13-19; and (iii) any surplus proceeds from the lease being deposited in the general fund of the owner, which proceeds may be used for any lawful purpose. Such lease shall be subject to the express approval of the board of trustees of the community hospital, except in the case where the board of trustees of the community hospital will be the lessee. However, owners may not lease any community hospital to the University of Mississippi Medical Center unless first the University of Mississippi Medical Center has obtained authority to lease such hospital under specific terms and conditions from the Board of Trustees of State Institutions of Higher Learning.
If the owner wishes to lease a community hospital without an option to sell it and the approval of the board of trustees of the community hospital is required but is not given within thirty (30) days of the request for its approval by the owner, then the owner may enter such lease as described herein on the following conditions: A resolution by the owner describing its intention to enter such lease shall be published once a week for at least three (3) consecutive weeks in at least one (1) newspaper published in the county or city, as the case may be, or if none be so published, in a newspaper having a general circulation therein. The first publication of such notice shall be made not less than twenty-one (21) days prior to the date fixed in such resolution for the lease of the community hospital and the last publication shall be made not more than seven (7) days prior to such date. If, on or prior to the date fixed in such resolution for the lease of the community hospital, there shall be filed with the clerk of the owner a petition signed by twenty percent (20%) or fifteen hundred (1500), whichever is less, of the qualified voters of such owner, requesting that an election be called and held on the question of the lease of the community hospital, then it shall be the duty of the owner to call and provide for the holding of an election as petitioned for. In such case, no such lease shall be entered into unless authorized by the affirmative vote of the majority of the qualified voters of such owner who vote on the proposition at such election. Notice of such election shall be given by publication in like manner as hereinabove provided for the publication of the initial resolution. Such election shall be conducted and the return thereof made, canvassed and declared as nearly as may be in like manner as is now or may hereafter be provided by law in the case of general elections in such owner. If, on or prior to the date fixed in the owner's resolution for the lease of the community hospital, no such petition as described above is filed with the clerk of the owner, then the owner may proceed with the lease subject to the other requirements of this section. Subject to the above conditions, the lease agreement shall be upon such terms and conditions as may be agreed upon and may make such provision for transfers of tangible and intangible personal property and operating funds and/or for the assumption of liabilities of the community hospital and for such lease payments, all as may be deemed appropriate by the owners.
(b) Owners may sell and convey all or part of the property, real or personal, comprising a community hospital, including any related facilities, wherever located, and/or assets of such community hospital, to any individual, partnership or corporation, whether operating on a nonprofit basis or on a profit basis, or to the board of trustees of such community hospital or any other owner or board of trustees, subject to the applicable provisions of subsections (8) and (10) of this section. Such sale and conveyance shall be upon such terms and conditions as may be agreed upon by the owner and the purchaser that are consistent with the requirements of this section, and the parties may make such provisions for the transfer of operating funds or for the assumption of liabilities of the facility, or both, as they deem appropriate. However, such sale and conveyance shall be conditioned upon (i) the facility continuing to operate in a manner safeguarding community health interests; (ii) the proceeds from such sale being first applied against such bonds, notes or other evidence of indebtedness as are issued pursuant to Section 41-13-19 as and when they are due, provided that the terms of the sale shall cover any indebtedness pursuant to Section 41-13-19; and (iii) any surplus proceeds from the sale being deposited in the general fund of the owner, which proceeds may be used for any lawful purpose. However, owners may not sell or convey any community hospital to the University of Mississippi Medical Center unless first the University of Mississippi Medical Center has obtained authority to purchase such hospital under specific terms and conditions from the Board of Trustees of State Institutions of Higher Learning.
(8) Whenever any owner decides that it may be in its best interests to sell or lease a community hospital as provided for under subsection (7) of this section, the owner shall first contract with a certified public accounting firm, a law firm or competent professional health care or management consultants to review the current operating condition of the community hospital. The review shall consist of, at minimum, the following:
(a) A review of the community's inpatient facility needs based on current workload, historical trends and projections, based on demographic data, of future needs.
(b) A review of the competitive market for services, including other hospitals which serve the same area, the services provided and the market perception of the competitive hospitals.
(c) A review of the hospital's strengths relative to the competition and its capacity to compete in light of projected trends and competition.
(d) An analysis of the hospital's options, including service mix and pricing strategies. If the study concludes that a sale or lease should occur, the study shall include an analysis of which option would be best for the community and how much revenues should be derived from the lease or sale.
(9) After the review and analysis under subsection (8) of this section, an owner may choose to sell or lease the community hospital. If an owner chooses to sell such hospital or lease the hospital with an option to sell it, the owner shall follow the procedure specified in subsection (10) of this section. If an owner chooses to lease the hospital without an option to sell it, it shall first spread upon its minutes why such a lease is in the best interests of the persons living in the area served by the facility to be leased, and it shall make public any and all findings and recommendations made in the review required under proposals for the lease, which shall state clearly the minimum required terms of all respondents and the evaluation process that will be used when the owner reviews the proposals. The owner shall lease to the respondent submitting the highest and best proposal. In no case may the owner deviate from the process provided for in the request for proposals.
(10) If an owner wishes to
sell such community hospital or lease the hospital with an option to sell it,
the owner first shall conduct a public hearing on the issue of the proposed
sale or lease with an option to sell the hospital. Notice of the date, time,
location and purpose of the public hearing shall be published once a week for
at least three (3) consecutive weeks in at least one (1) newspaper published in
the county or city, as the case may be, or if none be so published, in a
newspaper having a general circulation therein. The first publication of the
notice shall be made not less than twenty-one (21) days before the date of the
public hearing and the last publication shall be made not more than seven (7)
days before that date. If there is filed with the clerk of the owner not
more than twenty-one (21) days after the date of the public hearing, * * * a petition signed by twenty percent (20%) or
fifteen hundred (1500), whichever is less, of the qualified voters of the
owner, requesting that an election be called and held on the question of
whether the owner should proceed with the process of seeking proposals for the
sale or lease with an option to sell the hospital, then it shall be the duty of
the owner to call and provide for the holding of an election as petitioned
for. Notice of the election shall be given by publication in the same manner as
provided for the publication of the notice of the public hearing. The election
shall be conducted and the return thereof made, canvassed and declared in the
same manner as provided by law in the case of general elections in the owner.
If less than a majority of the qualified voters of the owner who vote on the
proposition at such election vote in favor of the owner proceeding with the
process of seeking proposals for the sale or lease with an option to sell the
hospital, then the owner is not authorized to sell or lease the hospital. If a
majority of the qualified voters of the owner who vote on the proposition at
such election vote in favor of the owner proceeding with the process of seeking
proposals for the sale or lease with an option to sell the hospital, then the
owner may seek proposals for the sale or lease of the hospital. If no such
petition is timely filed with the clerk of the owner, then the owner may
proceed with the process of seeking proposals for the sale or lease with an
option to sell the hospital. The owner shall adopt a resolution describing
its intention to sell or lease with an option to sell the hospital, which shall
include the owner's reasons why such a sale or lease is in the best interests
of the persons living in the area served by the facility to be sold or leased.
The owner then shall publish a copy of the resolution; the requirements for
proposals for the sale or lease with an option to sell the hospital, which
shall state clearly the minimum required terms of all respondents and the
evaluation process that will be used when the owner reviews the proposals; and
the date proposed by the owner for the sale or lease with an option to sell the
hospital. Such publication shall be made once a week for at least three (3)
consecutive weeks in at least one (1) newspaper published in the county or
city, as the case may be, or if none be so published, in a newspaper having a
general circulation therein. The first publication of the notice shall be made
not less than twenty-one (21) days before the date proposed for the sale or
lease with an option to sell the hospital and the last publication shall be
made not more than seven (7) days before that date. * * * After receiving proposals,
such sale or lease shall be made to the respondent submitting the highest and
best proposal. In no case may the owner deviate from the process provided for
in the request for proposals.
(11) A lessee of a community hospital, under a lease entered into under the authority of Section 41-13-15, in effect prior to July 15, 1993, or an affiliate thereof, may extend or renew such lease whether or not an option to renew or extend the lease is contained in the lease, for a term not to exceed fifteen (15) years, conditioned upon (a) the leased facility continuing to operate in a manner safeguarding community health interest; (b) proceeds from the lease being first applied against such bonds, notes or other evidence of indebtedness as are issued pursuant to Section 41-13-19; (c) surplus proceeds from the lease being used for health related purposes; (d) subject to the express approval of the board of trustees of the community hospital; and (e) subject to the express approval of the owner. If no board of trustees is then existing, the owner shall have the right to enter into a lease upon such terms and conditions as agreed upon by the parties. Any lease entered into under this subsection (11) may contain an option to purchase the hospital, on such terms as the parties shall agree.
SECTION 3. This act shall take effect and be in force from and after July 1, 2019.
