Hospital sale and lease bill heads to governor’s desk

Mar 7, 2012

The following article was published in The Florida Current on March 7, 2012:

Hospital sale and lease bill heads to the governor’s desk

By Christine Jordan Sexton

A top priority for for-profit hospital chains cleared the Legislature on Wednesday and is on its way to the governor.

The bill (HB 711) caps two years of contentious back-and-forth between lawmakers over the issue.

“It’s been through a mill and it’s a compromise,’’ said Sen. Don Gaetz, R-Destin.

Under HB 711, every governing board or hospital district will be required to evaluate the benefits of selling or leasing facilities to a not-or-profit company by the end of the year unless the hospital already had entertained offers by Feb. 1, 2012. Within 160 days of the analysis the governing board must post its findings in a newspaper and in the Florida Administrative Weekly.

Some senators questioned whether the bill would mandate a sale.

Gaetz stressed that there was nothing in the bill that would require hospitals to be sold.

“The world can be offered and they don’t have to sell,’’ he said.

If the hospital board determines that the sale is in the best interest of the community, the bill spells out requirements that must be met and followed. Additionally the bill requires that 50 percent of the net proceeds of the sale or lease are deposited into a health care economic development trust fund and the use of the funds will be spent at the discretion of a majority of the county commission or municipal government.

The other 50 percent of the proceeds must be used for funding the delivery of indigent care, including primary care, physician specialty care, outpatient care, inpatient care and behavioral health to hospitals within the area.

In order for a hospital to be sold or leased the deal must represent fair market value and result in a reduction or elimination of property taxes or others. Additionally care for the indigent, uninsured and underinsured must continue.

If the deal is less than fair market value the board must provide a detailed explanation of how the best interests of the affected community are served.

Additionally, members of the hospital governing board must disclose whether they will experience a gain or loss to themselves or to key management employees or members of the medical staff.

Within three months of the anticipated closing date of the proposed transaction the hospital board must make publicly available all findings and documents that were prepared for the fair market value determination.

Ultimately, the sale must be approved the Agency for Health Care Administration unless there is a requirement in law that the sale or lease must be approved by voters. The AHCA secretary is required to issue a final order approving or denying the proposed transaction based “solely” on whether proper procedure was followed.

Interested parties can appeal the secretary’s decision to a district appellate court or the 1st District Court of Appeal in Tallahassee, though the bill would require the court to affirm the secretary’s decision unless it was “clearly erroneous”. If a hospital is sold any and all special district tax authority associated with the hospital ceases on the date of the sale.”

There are exemptions from the requirements, including hospital that have had long-term leases as well as Bay County Hospital in Panama City and Munroe Regional Hospital in Ocala, both of which have entertained sales.

The sale and lease of public hospitals was a fight last year between for-profit facilities owned by Hospital Corp. of America and the not-for-profit facilities that belong to the Safety Net Hospital Alliance of Florida.

Safety Net Hospital Alliance of Florida lobbyist Nick Iarossi said in the interim between sessions the safety net facilities came to the recognition “that there were some problems in the past. We wanted to come up with something that would address those concerns.”

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