Source: http://www.wvwvermont.org/cgi-bin/vt_legis/fullsection.cfm?Title=18&Chapter=221&Section=09420&form_access_date=20140109
Timestamp: 2017-11-18 08:34:13
Document Index: 74231174

Matched Legal Cases: ['§ 9420', '§ 12', '§ 317', '§ 16', '§ 2460', '§ 2460', '§ 2460', '§ 2328', '§ 1', '§ 2', '§ 9419', '§ 9421']

S: 9420 C: 221 T: 18 - Conversion of nonprofit hospitals The Vermont Statutes Online
Chapter 221: HEALTH CARE ADMINISTRATION
Sub-Chapter 002: Claims Processing And Contract Standards
18 V.S.A. § 9420. Conversion of nonprofit hospitals
(1) "Charitable assets" means the fair market value of a nonprofit hospital. When a conversion affects only some of the assets of a nonprofit hospital, "charitable assets" means those assets of the hospital that will be so affected.
(2) "Commissioner" is the commissioner of financial regulation.
(3) "Conversion" means a transaction or series of transactions described in subdivision (4) of this subsection.
(4) "Convert" means to sell, transfer, lease, exchange, option, commit, convey, or otherwise dispose of assets or operations of a nonprofit hospital. The term does not include transactions occurring in the normal and ordinary course of business for the nonprofit hospital, such as management contracts, vendor contracts, physician-hospital contracts, managed care contracts, financing agreements, or ventures such as letters of credit, or cooperative or networking agreements with for-profit providers.
(5) "Fair market value" means the price that the assets being converted would bring in a competitive and open market under a fair sale with the buyer and seller acting prudently, knowledgeably, at arm's length, and in their own best interest.
(6) "Hospital system" means a network of hospitals affiliated with a nonprofit hospital.
(7) "Nonprofit hospital" means a nonprofit entity, where no part of the net earnings may lawfully be applied to the benefit of any private shareholder or individual, and which is a hospital as defined in section 1902 of this title, or a hospital member of a hospital system; provided, that the term "hospital" does not include any hospital conducted, maintained, or operated by the United States government or the state of Vermont or the duly authorized agency of either.
(8) "Parties" means the nonprofit hospital and any other person who is a party to a conversion described in the application filed pursuant to subsection (e) of this section, including, without limitation, any person that, pursuant to the plan of conversion, is to receive charitable assets or proceeds as a result of the conversion. When, in this section, reference is made to liabilities or obligations of the parties, such liabilities and obligations shall be joint and several.
(9) "Qualifying amount" means an amount that is at least $1 million and represents at least 40 percent of the value of the assets of the nonprofit hospital, or that vests control of the nonprofit hospital in another person or entity. For purposes of determining whether the threshold requirements of this subdivision have been or will be met, related conversions shall be aggregated.
(2) In any conversion that would have required an application under subsection (e) of this section but for the exception set forth in subdivision (1) of this subsection, notice to or written waiver by the attorney general shall be given or obtained as if required under 11B V.S.A. § 12.02(g).
(1) Within 30 days of receipt of the application, or within 10 days of receipt of any amendment thereto, whichever is longer, the attorney general, with the commissioner's agreement, shall determine whether the application is complete. The attorney general shall promptly notify the parties of the date the application is deemed complete, or of the reasons for a determination that the application is incomplete. A complete application shall include the following:
(2) The parties shall make the contents of the application reasonably available to the public prior to any hearing for public comment described in subsection (g) of this section to the extent that they are not otherwise exempt from disclosure under 1 V.S.A. § 317(b).
(1) The attorney general and commissioner shall hold one or more public hearings on the transaction or transactions described in the application. A record shall be made of any hearing. The hearing shall commence within 30 days of the determination by the attorney general that the application is complete. If a hearing is continued or multiple hearings are held, any hearing shall be completed within 60 days of the attorney general's determination that an application is complete. In determining the number, location, and time of hearings, the attorney general, in consultation with the commissioner, shall consider the geographic areas and populations served by the nonprofit hospital and most affected by the conversion and the interest of the public in commenting on the application.
(2) The attorney general shall provide reasonable notice of any hearing to the parties, the commissioner, and the public, and may order that the parties bear the cost of notice to the public. Notice to the public shall be provided in newspapers having general circulation in the region affected and shall identify the applicants and the proposed conversion. A copy of the public notice shall be sent to the state health care and long-term care ombudspersons and to the senators and members of the house of representatives representing the county and district and to the clerk, chief municipal officer, and legislative body, of the municipality in which the nonprofit hospital is principally located. Upon receipt, the clerk shall post notice in or near the clerk's office and in at least two other public places in the municipality. Any person may testify at a hearing under this section and, within such reasonable time as the attorney general may prescribe, file written comments with the attorney general and commissioner concerning the proposed conversion.
(2) The commissioner shall approve the proposed transaction if the commissioner finds that the application and transaction will satisfy the criteria established in section 9437 of this title. For purposes of applying the criteria established in section 9437, the term "project" shall include a conversion or other transaction subject to the provisions of this subchapter.
(3) A denial by the commissioner may be appealed to the supreme court pursuant to the procedures and standards set forth in 8 V.S.A. § 16. If no appeal is taken or if the commissioner's order is affirmed by the supreme court, the application shall be terminated. A failure of the commissioner to approve of an application in a timely manner shall be considered a final order in favor of the applicant.
(j) Standards for attorney general's review. In determining whether to approve a conversion under subsection (i) of this section, the attorney general shall consider whether:
(7) the application contains sufficient information and data to permit the attorney general and commissioner to evaluate the conversion and its effects on the public's interests in accordance with this section; and
(k) Investigation by attorney general. The attorney general may conduct an investigation relating to the conversion pursuant to the procedures set forth generally in 9 V.S.A. § 2460. The attorney general may contract with such experts or consultants the attorney general deems appropriate to assist in an investigation of a conversion under this section. The attorney general may order any party to reimburse the attorney general for all reasonable and actual costs incurred by the attorney general in retaining outside professionals to assist with the investigation or review of the conversion.
( l ) Superior court action. If the attorney general does not approve the conversion described in the application and any amendments, the parties may commence an action in the superior court of Washington County, or with the agreement of the attorney general, of any other county, within 60 days of the attorney general's notice of disapproval provided to the parties under subdivision (i)(2) of this section. The parties shall notify the commissioner of the commencement of an action under this subsection. The commissioner shall be permitted to request that the court consider the commissioner's determination under subsection (h) of this section in its decision under this subsection.
(1) Within 45 days of the commencement of an action under subsection (l) of this section, the court shall hold a hearing to determine whether the conversion described in the application and any amendments submitted prior to the attorney general's notice of disapproval satisfy the standards under subsection (j) of this section that the attorney general identified in the notice of disapproval as not having been met by the transaction described in the application. The court shall determine the matter within 45 days of the conclusion of the hearing. The court, for good cause, may extend each of the time periods provided in this subsection for its hearing and determination for an additional 30 days, or for a longer period if agreed to by the parties and the attorney general. The attorney general shall represent the interests of the public at any hearing under this subsection. The parties shall have the burden to establish that the application, with any amendments that were submitted prior to the attorney general's notice of disapproval, meets each of the standards of subsection (j) of this section identified in the attorney general's notice of disapproval as not having been met by the application.
(2) If the court finds that the parties have shown that the conversion described in the application meets the standards of subsection (j) of this section identified in the attorney general's notice of disapproval as not having been met by the application, the court shall set aside the determination of the attorney general, and the parties may proceed under this section as if the attorney general had approved the conversion described in the application.
(3) If the attorney general substantially prevails in the action, the court may order the parties to reimburse the state for the reasonable value of the attorney general's services and expenses in defending the action, separate and apart from any amounts the parties are required to pay pursuant to subsection (k) of this section.
(n) Use of converted assets or proceeds of a conversion approved pursuant to this section. If at any time following a conversion, the attorney general has reason to believe that converted assets or the proceeds of a conversion are not being held or used in a manner consistent with information provided to the attorney general, the commissioner, or a court in connection with any application or proceedings under this section, the attorney general may investigate the matter pursuant to procedures set forth generally in 9 V.S.A. § 2460 and may bring an action in Washington superior court or in the superior court of any county where one of the parties has a principal place of business. The court may order appropriate relief in such circumstances, including avoidance of the conversion or transfer of the converted assets or proceeds or the amount of any private inurement to a person or party for use consistent with the purposes for which the assets were held prior to the conversion, and the award of costs of investigation and prosecution under this subsection, including the reasonable value of legal services.
( o ) Remedies and penalties for violations.
(1) The attorney general may conduct an investigation relating to a conversion pursuant to the procedures set forth generally in 9 V.S.A. § 2460 if the attorney general has reason to believe that a nonprofit hospital has converted or is about to convert less than a qualifying amount of its assets in such a manner that would:
(2) The attorney general, in consultation with the commissioner, may bring an action with respect to any conversion of less than a qualifying amount of assets, according to the procedures set forth in subsection (n) of this section. The attorney general shall notify the commissioner of any action commenced under this subsection. The commissioner shall be permitted to investigate and determine whether the transaction satisfies the criteria established in subdivision (g)(2) of this section, and to request that the court consider the commissioner's recommendation in its decision under this subsection. In such an action, the superior court may enjoin or void any transaction and may award any other relief as provided under subsection (n) of this section.
(A) violates one or more of the standards listed in subdivision (j)(1), (3), (4), or (6); or
(1) Nothing in this section shall be construed to limit the authority of the commissioner, attorney general, department of health, or a court of competent jurisdiction under existing law, or the interpretation or administration of a charitable gift under 14 V.S.A. § 2328.
(2) This section shall not be construed to limit the regulatory and enforcement authority of the commissioner, or exempt any applicant or other person from requirements for licensure or other approvals required by law. (Added 2005, No. 28, § 1, eff. May 24, 2005; amended 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)
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18 9420 Conversion of nonprofit hospitals 2012-01-01 2013-06-30
18 9420 Conversion of nonprofit hospitals 2013-07-01 2099-12-31