Washington Administrative Code › Title 246 - Health, Department of › FACILITY STANDARDS AND LICENSING › Chapter 246-312 - Acquisition of nonprofit hospitals › Part II - APPLICATION REQUIREMENTS › Section 246-312-040 - Documents required

Current through Register Vol. 24-14, July 15, 2024
(1) The acquiring
				  person shall submit as part of the application for approval three copies of the
				  required documents to the Department of Health, Office of Health Systems
				  Development, P.O. Box 47851, Olympia, Washington 98504-7851 and one copy to the
				  Attorney General's Office, Antitrust Section, 900 4th Avenue, Suite 2000,
				  Seattle, Washington 98164-1012. The official date of receipt shall be the date
				  the application is received at the department of health.
(2) Each document submitted shall identify
				  which request the document is responsive to, using the list below. If the
				  requested document does not exist the acquiring party shall note "does not
				  exist" on a page for that document.
(3) The acquiring party shall submit, or, as
				  appropriate, obtain from the nonprofit hospital and then submit:
(a) The articles of incorporation of the
				  nonprofit hospital, including all amendments thereto from inception to the
				  present.
(b) The bylaws of the
				  nonprofit hospital, including all amendments thereto from inception to the
				  present.
(c) All documents
				  reflecting the terms and conditions of any restricted gifts or bequests to the
				  nonprofit hospital in excess of ten thousand dollars.
(d) A list identifying all trustees, officers
				  and directors of the nonprofit hospital who have served at any time during the
				  seven years prior to the application.
(e) A list identifying each and every
				  officer, trustee or director of the nonprofit hospital (or any immediate family
				  member of such persons) or any affiliate of the nonprofit who has any personal
				  financial interest (other than salary and directors/trustees' fees) in any
				  company, firm, partnership, or other business entity that is currently doing
				  business, or has previously done business, with the nonprofit hospital or any
				  affiliate of the nonprofit hospital or the acquiring person or any affiliate of
				  the acquiring person.
(f) A
				  statement summarizing the procedure which the nonprofit hospital's board of
				  directors used to evaluate the proposed acquisition.
(g) All documents reflecting a decision by
				  the board of directors of the nonprofit hospital to delegate to any committee,
				  or group smaller than the entire board, the responsibility for reviewing or
				  considering any potential change of ownership or control of the nonprofit's
				  assets.
(h) All documents relating
				  to discussions, deliberations or consideration by the nonprofit hospital's
				  board of directors or any committee or individual members thereof of any
				  possible change of ownership or control of the hospital's assets including the
				  proposed acquisition and specific alternatives to the proposed
				  acquisition.
(i) An affidavit from
				  each member of the board of directors of the nonprofit hospital which contains
				  a statement that the individual has no conflict of interest in the proposed
				  acquisition or otherwise shall disclose any and all actual or potential
				  individual conflicts of interest.
(j) Copies of the two most recent "community
				  needs assessment" or similar evaluations or assessments prepared by or for the
				  nonprofit hospital. Identify all individuals or entities which assisted or
				  contributed to any such evaluations or assessments.
(k) All documents relating to communications
				  between the nonprofit hospital and any consultants retained to assist in the
				  process of considering or deciding whether to enter into the proposed
				  acquisition including any valuation of the assets involved in the proposed
				  acquisition, retention letters or contracts, and any and all materials relied
				  upon to support any conclusions as to valuation.
(l) All documents relating to any
				  relationship between the nonprofit hospital and valuation consultant.
(m) The financial and economic analysis and
				  report from an independent consultant relating to the proposed acquisition and
				  the supporting documents which form the basis for this report, and any other
				  documentation reflecting valuation determinations of any of the nonprofit
				  hospital's assets that are subject to the proposed acquisition.
(n) Copies of all requests for proposal sent
				  to any potential acquiring person and all responses received thereto by the
				  nonprofit hospital.
(o) All
				  documents relating to the reasons why any potential acquiring person was
				  excluded by the nonprofit hospital from further consideration as a potential
				  acquiring person of the assets involved in the proposed acquisition.
(p) All documents reflecting the deliberative
				  process used by the nonprofit hospital in selecting the acquiring
				  person.
(q) Copies of each proposal
				  received by the nonprofit hospital and documents which reflect any analysis
				  thereof. Identify all analysts involved.
(r) All documents relating to the nonprofit
				  hospital's board of directors' evaluation of the option of continuing as a
				  nonprofit entity or pursuing the proposed acquisition or similar transaction
				  with another nonprofit entity.
(s)
				  All documents relating to the nonprofit hospital's plan for use of any proceeds
				  after close of the proposed acquisition together with a statement explaining
				  how the proposed plan complies with all applicable charitable trusts that
				  govern use of the nonprofit hospital's assets. The plan must include any
				  proposed amendments to the nonprofit hospital's articles of incorporation and
				  bylaws or any articles of incorporation and bylaws of any entity that will
				  control any of the proceeds from the proposed transfer. Attach any Internal
				  Revenue Service opinions related to the above.
(t) A statement from the nonprofit hospital's
				  board of directors which contains all the reasons for the board's conclusion
				  that the proposed acquisition is necessary or desirable and is appropriate
				  under the circumstances, and which contains the board's conclusions regarding
				  the effects which the proposed acquisition will likely have on delivery of
				  health related services to the community served by each facility involved in
				  the proposed acquisition, and the basis for this opinion. The statement shall
				  also describe all dissenting viewpoints presented.
(u) Copies of the prior five annual audited
				  financial statements and the most current unaudited financial statement for the
				  nonprofit hospital.
(v) A detailed
				  statement of any actual or contingent liabilities retained by the nonprofit
				  hospital posttransaction.
(w) All
				  requests for opinions to the Internal Revenue Service for rulings related to
				  the proposed acquisition and any Internal Revenue Service responses
				  thereto.
(x) A pro forma balance
				  sheet for the surviving or successor nonprofit entity
				  posttransaction.
(y) A statement
				  describing how the survivor or the successor nonprofit entity plans to deal
				  with the right of first refusal to repurchase the assets involved in this
				  transaction, along with a copy of any proposed contract, agreement or
				  understanding regarding the same.
(z) A detailed statement describing how
				  representatives of the community will be involved in the governance of the
				  successor nonprofit entity.
(aa) A
				  statement containing any other information the nonprofit hospital believes the
				  attorney general should consider in deciding whether the proposed acquisition
				  is in the public interest.
(bb) All
				  proposed written agreements or contracts between the nonprofit hospital and the
				  acquiring person relating to the proposed acquisition.
(cc) All documents relating to any personal
				  financial benefit that the proposed acquisition may confer on any officer,
				  director, trustee, employee, doctor, medical group, consultant, or any other
				  entity affiliated with the nonprofit hospital or any immediate family member of
				  any such person.
(dd) All documents
				  relating to any relationship between the acquiring person and valuation
				  consultant.
(ee) Copies of any
				  proposed contract, agreement or understanding relating to the proposed
				  acquisition between the acquiring person and any officer, director, trustee,
				  consultant, or committee member of the nonprofit hospital, or consultants
				  thereto, or any other party to the acquisition.
(ff) A detailed statement and all documents
				  relating to the parties' plans to ensure the community's continued access to
				  affordable health care posttransaction and plans regarding any anticipated
				  reduction or elimination of any health services posttransaction and the
				  availability of alternative services should such elimination or reduction
				  occur.
(gg) A detailed statement
				  and all documents relating to the parties' plans for assuring the continuance
				  of existing hospital privileges posttransaction.
(hh) A detailed statement and all documents
				  relating to the parties' plans for ensuring the maintenance of appropriate
				  health science research and health care provider education
				  posttransaction.
(ii) A detailed
				  statement and all documents relating the parties' plans for ensuring safeguards
				  to avoid conflict of interest in posttransaction patient referral.
(jj) A detailed statement and all documents
				  relating to the parties' commitment and plans to provide health care to the
				  disadvantaged, the uninsured, and the underinsured and how benefits to promote
				  improved health in the affected community will be provided
				  posttransaction.