Senate Bill Aimed At Keeping Hospital Operators Honest

Jun 21, 2018

The Senate leadership introduced a bill (S-2893) Wednesday that would require hospital officials to testify under oath to state regulators assessing hospital takeovers.

The bill, sponsored by Senate Majority Leader Michael J. McCaffrey, is designed to prevent the type of “fraudulent misrepresentations and omissions” alleged in two class-action lawsuits filed Tuesday against hospital operators in the St. Joseph’s pension plan case.

The 2014 sale of two local hospitals left the pension plan for some 2,700 current and former hospital employees with no ongoing source of revenue. The plan is now in receivership, a form of bankruptcy.

“Strengthening the information gathering and vetting processes surrounding these massive transactions will only lead to greater transparency and accountability,’’ McCaffrey said in a statement. “Executives and consultants should be held accountable for the representations made during hospital transfers if they are in fact misrepresentation.’’

The bill (S-2983) would require the state health director and the state attorney general to conduct interviews under oath and with a stenographer present when reviewing proposed hospital sales or takeovers.The new requirements would apply to any testimony gathered in the course of the regulatory review.

The bill has been referred to the Senate Judiciary Committee.