Hospital operators seeking permission take over health care facilities in Rhode Island will be required to testify under oath to state regulators under legislation headed to Governor Gina Ramondo for her signature.
The legislation, sponsored by Senate Majority Leader Michael J. McCaffrey, won unanimous approval by both chambers in the waning hours of the legislative session on Saturday.
The measure, McCaffrey said, is designed to improve transparency in hospital takeovers and prevent the type of “fraudulent misrepresentations and omissions” alleged in two class-action lawsuits filed June 18 against hospital operators and the Roman Catholic Diocese of Providence.
The suits, filed on behalf of current and former hospital employees, accuse hospital operators of deliberately underfunding the pension plan and then lying about the plan’s financial condition to beneficiaries and state regulators. After the 2014 sale of Our Lady of Fatima Hospital and St. Joseph’s Health Services, the pension plan was left with no source of ongoing revenue. The plan is now in receivership, a form of bankruptcy.
McCaffrey said in a statement introducing the legislation that it’s designed to strengthen the vetting process and ensure that executives and consultants are |held accountable for the representations made during hospital transfers if they are in fact misrepresentation.’’
The legislation requires the state health director and the state attorney general – which must approval all hospital mergers or takeovers — to conduct interviews under oath and with a stenographer present when reviewing the deals. The new requirements would apply to any testimony gathered in the course of the regulatory review.
