CT House to vote on bills that address hospital mergers, compensating college athletes

HBJ PHOTO | DAVID KRECHEVSKY The State Capitol in Hartford.

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The state House of Representatives will convene this evening to vote on a couple of bills, including one that would create an emergency certificate of need (CON) application process for hospitals.

House Bill 7067 is an omnibus bill that also will address the assessment of motor vehicle property taxes, a property tax exemption for disabled veterans and funding for the Special Education Excess Cost grant.

The bill, however, also creates an emergency CON application process for “transfers of ownership of hospitals that have filed for bankruptcy protection.”

That currently applies to Prospect Medical Holdings, the California-based company that owns three hospitals in Connecticut, including Manchester Memorial, Rockville General and Waterbury hospitals.

In January, Prospect, which also owns facilities in California, Pennsylvania and Rhode Island, filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court in Northern Texas. Chapter 11 protects a company from its creditors while it reorganizes its finances with court supervision.

Prospect is also mired in dueling lawsuits with Yale New Haven Health System, which is seeking to back out of an agreement it signed in 2022 to acquire Prospect’s three Connecticut hospitals for $435 million.

The bill to be considered Monday requires that any hospital “subject to the transfer of ownership” that has filed for bankruptcy protection and “a potential purchaser for such hospital has been or is required to be approved by a bankruptcy court, may, at the discretion of the Commissioner of Health Strategy, apply for an emergency certificate of need .…”

The state Office of Health Strategy (OHS) is the state regulatory agency for hospitals and healthcare systems and oversees the CON application process.

State law requires certain types of healthcare providers to get state approval via the CON application process before making major changes, including changes in ownership.

The bill requires OHS to develop an emergency CON application, “which will identify any data required to be submitted” to allow the agency to “analyze the effects of a hospital’s transfer of ownership on health care costs, quality and access in the affected market.”

The bill adds that if the potential purchaser of a hospital is a for-profit entity, OHS “may require additional information or data intended to ensure that the ongoing operation of the hospital after the transfer of ownership will be maintained in the public interest.”

Prospect Medical Holdings is a for-profit entity that has faced criticism for, among other things, selling the land and buildings from hospitals it owns in Connecticut, California and Pennsylvania to Medical Properties Trust (MPT) for $1.4 billion, then leasing back those hospitals from the trust. The result was that the three state hospitals were now required to pay rent to MPT.

The bill requires OHS to determine whether an application is complete “not later than three business days” after it is submitted, and states that OHS can conduct a public hearing no more than 30 days after it deems an application to be complete.

The legislation also requires OHS to issue its final decision “not later than sixty days after such application is deemed complete.”

The bill adds that the final decision on an emergency CON application, “including any conditions imposed on the approval of such an application, shall not be subject to appeal.”

The other omnibus bill expected to be voted on during Monday’s House session is H.B. 7066, which addresses how schools and immigration authorities interact, the purchase and operation of certain drones, grants for nonprofit organizations, and compensating college athletes through endorsement and revenue-sharing agreements.

Under current state law, college athletes are allowed to be compensated for use of their name, image and likeness (NIL). More recently, however, the NCAA has said it plans to allow schools to directly compensate athletes. That decision is a result of a proposed settlement of a multibillion-dollar lawsuit brought by former NCAA athletes.

A final settlement in the lawsuit is expected to be approved in April, and could include paying former athletes backpay for lost NIL opportunities, and a revenue-sharing model to compensate current athletes directly, beginning in the 2025-26 academic year.

UConn Director of Athletics David Benedict testified earlier in this session that several states — including Louisiana, Mississippi, Nebraska, Oklahoma, Utah and Virginia — have either proposed or already approved legislation to allow schools in their states to offer revenue-sharing to current student-athletes, and that Connecticut should do the same.

The House is scheduled to convene at 5 p.m. Monday.