SB365: Bill Text

LRB-3408/4

DAK:jlg:hmh

1997 - 1998 LEGISLATURE

1997 Senate BILL 365

November 26, 1997 - Introduced by Senators Rosenzweig, Moen, Rude, Decker, Roessler, Huelsman, Darling and Plache, cosponsored 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, by request of Attorney General James Doyle. Referred to Committee on Health, Human Services, Aging, Corrections, Veterans and Military Affairs.

SB365,1,3 An Act to amend 50.35; and to create 165.40 of the statutes; relating to: acquisition of a hospital owned by a nonprofit corporation, a city, a county, the state 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:

SB365, s. 1 Section 1. 50.35 of the statutes is amended to read:

SB365,2,15 50.35 Application and approval. Application for approval to maintain a hospital shall be made to the department on forms provided by the department. On receipt of an application, the department shall issue a certificate of approval if the applicant and hospital facilities meet the requirements established by the department. This approval shall be in effect until, for just cause and in the manner herein prescribed, it is suspended or revoked. The certificate of approval may be issued only for the premises and persons or governmental unit named in the application and is not transferable or assignable. The department shall withhold, suspend or revoke approval for a failure to comply with s. 165.40 (6) (a) 1. or 2., but otherwise may not withhold, suspend or revoke approval unless for a substantial failure to comply with ss. 50.32 to 50.39 or the rules and standards adopted by the department, after giving a reasonable notice, a fair hearing and a reasonable opportunity to comply. Failure by a hospital to comply with s. 50.36 (3m) shall be considered to be a substantial failure to comply under this section.

SB365, s. 2 Section 2. 165.40 of the statutes is created to read:

SB365,2,17 165.40 Acquisition of hospitals. (1) Definitions. In this section:

SB365,3,3 (a) "Acquisition" means the long-term leasing of a hospital or a system of hospitals, or the acquiring by a person of an ownership or controlling interest in a hospital or a system of hospitals that results in one of the following:

SB365,3,4 1. A change of at least 20% ownership or control.

SB365,3,5 2. Possession by the person of at least 50% ownership or control.

SB365,3,6 (b) "Hospital" has the meaning given in s. 50.33 (2).

SB365,3,7 (c) "Local agency" means an agency of a county, city, village or town.

SB365,3,8 (d) "Nonprofit corporation" has the meaning given in s. 181.02 (8).

SB365,3,11 (e) "Person" means an individual, sole proprietorship, partnership, association, limited liability company, corporation or joint stock company, lessee, trustee or receiver.

SB365,3,13 (f) "State agency" has the meaning given in s. 16.004 (12) (a), except that it includes the University of Wisconsin Hospitals and Clinics Authority.

SB365,3,14 (g) "Working day" has the meaning given in s. 227.01 (14).

SB365,3,18 (2) Prohibition; approval required. (a) Except as provided in sub. (5), no person may engage in the acquisition of a hospital or a system of hospitals owned by any of the following unless the person has first received review and approval of an application concerning the acquisition under this section from the attorney general:

SB365,3,19 1. A nonprofit corporation.

SB365,3,20 2. A city.

SB365,3,21 3. A county.

SB365,3,22 4. The state.

SB365,3,23 5. The University of Wisconsin Hospitals and Clinics Authority.

SB365,4,7 (b) If the proposed acquisition under this subsection is for a system of hospitals, the person who proposes to engage in the acquisition shall provide notice of the impending acquisition to the attorney general at least 30 days before the offer to purchase or lease is made. The attorney general shall, within 5 days after receipt of the notice, determine and notify the person as to whether a single application for the system or an application for each hospital within the system shall be submitted for review. If the attorney general determines that an application for each hospital within the system shall be submitted, no submitted application is complete until all complete applications for the hospitals within the system are submitted.

SB365,4,12 (3) Application review by the attorney general; procedures. (a) An application for review by the attorney general that is required under sub. (2) shall, at the time the offer to purchase or lease is made, be submitted to the attorney general on a form that is provided by the attorney general. The application shall include all of the following:

SB365,4,13 1. The name of the seller or lessor.

SB365,4,15 2. The name of the purchaser or lessee and, if applicable, other parties to the acquisition.

SB365,4,16 3. The terms of the proposed agreement.

SB365,4,17 4. The sale price or rental charges.

SB365,4,18 5. A copy of the acquisition agreement.

SB365,4,20 6. A financial and economic analysis and report by an independent expert or consultant of the effect of the acquisition under the standards specified in sub. (4).

SB365,4,22 (b) An application and all documents related to the application, as specified in par. (a), are public records for the purposes of subch. II of ch. 19.

SB365,4,24 (c) 1. Within 5 working days after receipt of a completed application under par. (a), the attorney general shall do all of the following:

SB365,5,3 a. Have notice of the application published as a class 2 notice, under ch. 985, in a newspaper having general circulation in the community or communities in which the hospital or system of hospitals to be sold or leased is located.

SB365,5,5 b. Notify by 1st class mail any person who has requested that the attorney general provide notice of the filing of hospital acquisition review applications.

SB365,5,6 2. Notice or a notification under subd. 1. shall state all of the following:

SB365,5,7 a. That a hospital acquisition review application has been received.

SB365,5,8 b. The names of the parties to the acquisition.

SB365,5,9 c. The contents of the hospital acquisition review application.

SB365,5,11 d. The date by which a person may submit written comments about the hospital acquisition review application to the attorney general.

SB365,5,15 e. That a public meeting will be held on the acquisition proposed by the application, the time and location of the meeting and the fact that any person may file written comments or exhibits for the meeting or may appear and make a statement at the meeting.

SB365,5,23 (d) Not later than 30 days after receipt of a completed application under sub. (2) (a), or as soon as practicable but not more than 120 days after receipt of a completed application under sub. (2) (b), and after giving 10 working days' notice, the attorney general shall hold a public meeting at a location that, at a minimum, is in the community served by the hospital, on the acquisition proposed by the application. If the proposed acquisition is for a system of hospitals, a public meeting shall be held in each community served by the system. Any person may file written comments or exhibits for the meeting or may appear and make a statement at the meeting.