Connecticut Seal

General Assembly

 

Governor's Bill No. 954

January Session, 2015

 

LCO No. 3894

 

*03894__________*

Referred to Committee on PUBLIC HEALTH

 

Introduced by:

 

SEN. LOONEY, 11th Dist.

SEN. DUFF, 25th Dist.

REP. SHARKEY, 88th Dist.

REP. ARESIMOWICZ, 30th Dist.

 

AN ACT CONCERNING TRANSPARENCY OF EXECUTIVE PAY IN CERTAIN HOSPITAL TRANSACTIONS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsection (d) of section 19a-486a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2015):

(d) The commissioner and the Attorney General shall review the certificate of need determination letter. The Attorney General shall determine whether the agreement requires approval pursuant to this chapter. If such approval is required, the commissioner and the Attorney General shall transmit to the purchaser and the nonprofit hospital an application form for approval pursuant to this chapter, unless the commissioner refuses to accept a filed or submitted certificate of need determination letter. Such application form shall require the following information: (1) The name and address of the nonprofit hospital; (2) the name and address of the purchaser; (3) a description of the terms of the proposed agreement; (4) copies of all contracts, agreements and memoranda of understanding relating to the proposed agreement; (5) a fairness evaluation by an independent person who is an expert in such agreements, that includes an analysis of each of the criteria set forth in section 19a-486c; (6) documentation that the nonprofit hospital exercised the due diligence required by subdivision (2) of subsection (a) of section 19a-486c, including disclosure of the terms of any other offers to transfer assets or operations or change control of operations received by the nonprofit hospital and the reason for rejection of such offers; [and] (7) the names of persons currently holding a position with the nonprofit hospital or the purchaser as an officer, director, board member or senior manager, whether or not such person is expected to hold a position with the hospital after completion of the proposed transaction and any salary, severance, stock offering or any financial gain, current or deferred, such person is expected to receive as a result of, or in relation to, the proposed transaction; and (8) such other information as the commissioner or the Attorney General deem necessary to their review pursuant to the provisions of sections 19a-486 to 19a-486f, inclusive, and chapter 368z. The application shall be subject to disclosure pursuant to section 1-210.

Sec. 2. Section 19a-644 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2015):

(a) On or before February twenty-eighth annually, for the fiscal year ending on September thirtieth of the immediately preceding year, each short-term acute care general or children's hospital shall report to the office with respect to its operations in such fiscal year, in such form as the office may by regulation require. Such report shall include: (1) Salaries and fringe benefits for the ten highest paid positions; (2) the name of each joint venture, partnership, subsidiary and corporation related to the hospital; and (3) the salaries paid to hospital employees by each such joint venture, partnership, subsidiary and related corporation and by the hospital to the employees of related corporations.

(b) The Department of Public Health shall adopt regulations in accordance with chapter 54 to provide for the collection of data and information in addition to the annual report required in subsection (a) of this section. Such regulations shall provide for the submission of information about the operations of the following entities: Persons or parent corporations that own or control the health care facility, institution or provider; corporations, including limited liability corporations, in which the health care facility, institution, provider, its parent, any type of affiliate or any combination thereof, owns more than an aggregate of fifty per cent of the stock or, in the case of nonstock corporations, is the sole member; and any partnerships in which the person, health care facility, institution, provider, its parent or an affiliate or any combination thereof, or any combination of health care providers or related persons, owns a greater than fifty per cent interest. For purposes of this section, "affiliate" means any person that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with any health care facility, institution, provider or person that is regulated in any way under this chapter. A person is deemed controlled by another person if the other person, or one of that other person's affiliates, officers, agents or management employees, acts as a general partner or manager of the person in question.

(c) Each nonprofit short-term acute care general or children's hospital shall include in the annual report required pursuant to subsection (a) of this section a report of all transfers of assets, transfers of operations or changes of control involving its clinical or nonclinical services or functions from such hospital to a person or entity organized or operated for profit.

(d) Each hospital that is a party to a transaction that was approved under sections 19a-486 to 19a-486h, inclusive, during the fiscal year ending on September thirtieth of the immediately preceding year, shall include in the annual report required pursuant to subsection (a) of this section any salary, severance payment, stock offering or other financial gain realized by each officer, director, board member or senior manager of the hospital as a result of such transaction.

[(d)] (e) The office shall require each hospital licensed by the Department of Public Health, that is not subject to the provisions of subsection (a) of this section, to report to said office on its operations in the preceding fiscal year by filing copies of the hospital's audited financial statements. Such report shall be due at the office on or before the close of business on the last business day of the fifth month following the month in which a hospital's fiscal year ends.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2015

19a-486a(d)

Sec. 2

July 1, 2015

19a-644

Statement of Purpose:

To implement the Governor's budget recommendations.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]