Bill Calls for Hospitals To Obtain New License Prior to Ownership Changes
On Tuesday, California's Senate Health Committee Chair Ed Hernandez (D-West Covina) introduced a bill (SB 408) that would prohibit hospitals and nursing homes from changing ownership unless they acquire a new license, California Watch reports.
Before the state awards a license to a health care facility, officials determine whether the organization has:
- A "reputable and responsible character";
- The ability to comply with laws and regulations; and
- The necessary finances to operate the facility.
Hernandez said he introduced the legislation because health facility ownership changes "can have a real effect on compliance with requirements ranging from seismic retrofitting to minimizing the risk of infections -- the public deserves to know the operators of their local hospitals are reputable."
The issue came into the spotlight in December 2010 when Prime Healthcare Services acquired San Diego's Alvarado Hospital while Prime Healthcare was under scrutiny for itsÂ billing practices.
Mark Horton, director of the state Department of Public Health, said the ownership change was consistent with laws that had been in place since 1976 (Jewett, California Watch, 2/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.