LRB-3421/5
DAK:jlg:hmh
1997 - 1998 LEGISLATURE
November 24, 1997 - Introduced by Representatives Huber, Underheim, Robson,
Urban, Hanson, Albers, Springer, Bock, Johnsrud, Meyer, La Fave, Ward, R.
Young, Musser, Krug, Dobyns, Notestein, Goetsch, J. Lehman, Gunderson,
Hasenohrl, Powers, Plouff, Gronemus and Ziegelbauer, cosponsored by
Senators Rosenzweig, Moen, Rude, Decker, Roessler, Huelsman, Darling
and Plache, by request of Attorney General James Doyle. Referred to
Committee on Health.
AB629,1,3
1An Act to amend 50.35; and
to create 165.40 of the statutes;
relating to:
2acquisition of a hospital owned by a nonprofit corporation, a city, a county, the
3state or the University of Wisconsin Hospitals and Clinics Authority.
Analysis by the Legislative Reference Bureau
This bill establishes regulation of the sale or lease of certain hospitals. Under
the bill, a person may not buy or lease on a long-term basis a hospital or system of
hospitals owned by a nonprofit corporation, city or county, the state or the University
of Wisconsin Hospitals and Clinics Authority, unless the attorney general first
reviews and approves an application concerning the sale or lease. Hospitals that are
owned by a nonprofit corporation and are to be sold or leased to a state or local agency
or, under certain conditions, to another nonprofit corporation are exempted from
these requirements.
The bill creates requirements for the application concerning the sale or lease
of a hospital that the purchaser or lessee must submit to the attorney general, and
establishes procedures to provide notice and review of the proposed acquisition. The
attorney general must hold a public meeting in the community served by the hospital
on the sale or lease proposed by the applicant. Further, the bill specifies standards
for review by the attorney general and provides that, if the attorney general
disapproves an application, either the proposed seller or lessor or a participant in the
public meeting who has certain legal interest in the hospital may bring an action in
circuit court for a declaratory judgment as to whether the standards for review are
met. If a hospital that is subject to review is sold or leased without review and
approval or after disapproval, the attorney general must so notify the department
of health and family services (DHFS) and DHFS must deny application for or
suspend or revoke any issued certificate of approval for the hospital.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB629, s. 1
1Section
1. 50.35 of the statutes is amended to read:
AB629,2,15
250.35 Application and approval. Application for approval to maintain a
3hospital shall be made to the department on forms provided by the department. On
4receipt of an application, the department shall issue a certificate of approval if the
5applicant and hospital facilities meet the requirements established by the
6department. This approval shall be in effect until, for just cause and in the manner
7herein prescribed, it is suspended or revoked. The certificate of approval may be
8issued only for the premises and persons or governmental unit named in the
9application and is not transferable or assignable. The department
shall withhold,
10suspend or revoke approval for a failure to comply with s. 165.40 (6) (a) 1. or 2., but
11otherwise may not withhold, suspend or revoke approval unless for a substantial
12failure to comply with ss. 50.32 to 50.39 or the rules and standards adopted by the
13department
, after giving a reasonable notice, a fair hearing and a reasonable
14opportunity to comply. Failure by a hospital to comply with s. 50.36 (3m) shall be
15considered to be a substantial failure to comply under this section.
AB629, s. 2
16Section
2. 165.40 of the statutes is created to read:
AB629,2,17
17165.40 Acquisition of hospitals. (1) Definitions. In this section:
AB629,3,3
1(a) "Acquisition" means the long-term leasing of a hospital or a system of
2hospitals, or the acquiring by a person of an ownership or controlling interest in a
3hospital or a system of hospitals that results in one of the following:
AB629,3,44
1. A change of at least 20% ownership or control.
AB629,3,55
2. Possession by the person of at least 50% ownership or control.
AB629,3,66
(b) "Hospital" has the meaning given in s. 50.33 (2).
AB629,3,77
(c) "Local agency" means an agency of a county, city, village or town.
AB629,3,88
(d) "Nonprofit corporation" has the meaning given in s. 181.02 (8).
AB629,3,119
(e) "Person" means an individual, sole proprietorship, partnership, association,
10limited liability company, corporation or joint stock company, lessee, trustee or
11receiver.
AB629,3,1312
(f) "State agency" has the meaning given in s. 16.004 (12) (a), except that it
13includes the University of Wisconsin Hospitals and Clinics Authority.
AB629,3,1414
(g) "Working day" has the meaning given in s. 227.01 (14).
AB629,3,18
15(2) Prohibition; approval required. (a) Except as provided in sub. (5), no
16person may engage in the acquisition of a hospital or a system of hospitals owned by
17any of the following unless the person has first received review and approval of an
18application concerning the acquisition under this section from the attorney general:
AB629,3,1919
1. A nonprofit corporation.
AB629,3,2121
3. A county.
AB629,3,2222
4. The state.
AB629,3,2323
5. The University of Wisconsin Hospitals and Clinics Authority.
AB629,4,724
(b) If the proposed acquisition under this subsection is for a system of hospitals,
25the person who proposes to engage in the acquisition shall provide notice of the
1impending acquisition to the attorney general at least 30 days before the offer to
2purchase or lease is made. The attorney general shall, within 5 days after receipt
3of the notice, determine and notify the person as to whether a single application for
4the system or an application for each hospital within the system shall be submitted
5for review. If the attorney general determines that an application for each hospital
6within the system shall be submitted, no submitted application is complete until all
7complete applications for the hospitals within the system are submitted.
AB629,4,12
8(3) Application review by the attorney general; procedures. (a) An
9application for review by the attorney general that is required under sub. (2) shall,
10at the time the offer to purchase or lease is made, be submitted to the attorney
11general on a form that is provided by the attorney general. The application shall
12include all of the following:
AB629,4,1313
1. The name of the seller or lessor.
AB629,4,1514
2. The name of the purchaser or lessee and, if applicable, other parties to the
15acquisition.
AB629,4,1616
3. The terms of the proposed agreement.
AB629,4,1717
4. The sale price or rental charges.
AB629,4,1818
5. A copy of the acquisition agreement.
AB629,4,2019
6. A financial and economic analysis and report by an independent expert or
20consultant of the effect of the acquisition under the standards specified in sub. (4).
AB629,4,2221
(b) An application and all documents related to the application, as specified in
22par. (a), are public records for the purposes of subch. II of ch. 19.
AB629,4,2423
(c) 1. Within 5 working days after receipt of a completed application under par.
24(a), the attorney general shall do all of the following:
AB629,5,3
1a. Have notice of the application published as a class 2 notice, under ch. 985,
2in a newspaper having general circulation in the community or communities in
3which the hospital or system of hospitals to be sold or leased is located.
AB629,5,54
b. Notify by 1st class mail any person who has requested that the attorney
5general provide notice of the filing of hospital acquisition review applications.
AB629,5,66
2. Notice or a notification under subd. 1. shall state all of the following:
AB629,5,77
a. That a hospital acquisition review application has been received.
AB629,5,88
b. The names of the parties to the acquisition.
AB629,5,99
c. The contents of the hospital acquisition review application.
AB629,5,1110
d. The date by which a person may submit written comments about the hospital
11acquisition review application to the attorney general.
AB629,5,1512
e. That a public meeting will be held on the acquisition proposed by the
13application, the time and location of the meeting and the fact that any person may
14file written comments or exhibits for the meeting or may appear and make a
15statement at the meeting.
AB629,5,2316
(d) Not later than 30 days after receipt of a completed application under sub.
17(2) (a), or as soon as practicable but not more than 120 days after receipt of a
18completed application under sub. (2) (b), and after giving 10 working days' notice, the
19attorney general shall hold a public meeting at a location that, at a minimum, is in
20the community served by the hospital, on the acquisition proposed by the application.
21If the proposed acquisition is for a system of hospitals, a public meeting shall be held
22in each community served by the system. Any person may file written comments or
23exhibits for the meeting or may appear and make a statement at the meeting.
AB629,6,424
(e) The attorney general shall establish and maintain a summary of written
25and oral comments made for or at the public meeting, including all questions posed,
1and shall require answers of the appropriate parties. The summary and answers
2shall be filed in the office of the attorney general and in the public library of the public
3library system for the community served by the hospital and a copy shall be available
4upon request to the attorney general.
AB629,6,85
(f) The attorney general may subpoena additional information or witnesses,
6require and administer oaths, require sworn statements, take depositions and use
7related discovery procedures for purposes of the meeting under par. (d) and otherwise
8during performance of a review under this subsection.
AB629,6,149
(g) Within 60 days after receipt of a completed application under sub. (2) (a) or
10as soon as practicable but not more than 150 days after receipt of a completed
11application under sub. (2) (b), the attorney general shall review the application in
12accordance with the standards specified in sub. (4) and shall approve or disapprove
13the application. The attorney general may not make its decision based on any
14condition that is not directly related to the standards under sub. (4).
AB629,6,1715
(h) If the attorney general disapproves an application under par. (g), any of the
16following may bring an action in circuit court for a declaratory judgment under s.
17806.04 as to whether the proposed acquisition meets the standards under sub. (4):
AB629,6,1818
1. The applicant.