CS/HB 4087 full text · Session Watch

2 An act relating to the Highlands County Hospital

3 District; amending chapter 2004-458, Laws of Florida;

4 providing requirements and duties of the Board of

5 Commissioners of the Highlands County Hospital

6 District before a lease or management agreement with

7 not-for-profit or for-profit corporations; providing

8 requirements for the agreement; providing

9 applicability; authorizing the board to sell the

10 entirety of the assets of the hospital to a not-for-

11 profit or for-profit entity under certain

12 circumstances; providing requirements and duties of

13 the board before the sale; providing requirements for

14 the sale agreement; requiring the hospital to file a

15 copy of the sale agreement with the Department of

16 Commerce; requiring the board to notify the department

17 of the sale; providing for judicial reviews; providing

18 for court costs; providing construction; providing an

19 effective date.

21 Be It Enacted by the Legislature of the State of Florida:

23 Section 1. Section 35 of section 3 of chapter 2004-458,

24 Laws of Florida, is amended, and sections 37 and 38 are added to

25 that section, to read:

26 Section 3. The charter for the Highlands County Hospital

27 District is re-created and reenacted to read:

28 Section 35. In order that citizens and residents of the

29 district may receive quality health care, the board of

30 commissioners may enter into contract with corporations, either

31 for-profit ~~for profit~~ or not-for-profit ~~not for profit,~~ duly

32 authorized to do business in the state for the purpose of

33 operating and managing such hospital and any or all of its

34 facilities ~~of whatsoever kind and nature and enter into leases~~

35 ~~with such corporations for the operating of such facilities. The~~

36 ~~term of any such lease, contract, or agreement and the~~

37 ~~conditions, covenants, and agreements to be contained therein~~

38 ~~shall be determined by the board of commissioners.~~

39 (1) Prior to entering into a lease or management

40 agreement, the Board of Commissioners of the Highlands County

41 Hospital District must elect, by a majority vote of the members

42 present and voting, to commence an evaluation of the benefits to

43 the public of the district, as described in Section 1, of

44 leasing the entirety of the assets of the Highlands County

45 Hospital District to a not-for-profit or for-profit entity to

46 continue to provide health care services to the community if the

47 board executes an agreement that meets the requirements of

48 subsection (6) of this section. In evaluating the benefits of

49 leasing the district assets, the board must find that the lease

50 is in the best interests of the public of the district and must

51 state the basis of that finding. To make that determination, the

52 board shall:

53 (a) Contract with an independent entity or entities that

54 have at least 5 years of experience conducting comparable

55 evaluations of hospital organizations similar in size and

56 function to the hospital to conduct an evaluation of the

57 benefits of leasing the district assets according to applicable

58 industry practices. A study completed less than 2 years prior to

59 the public notice under paragraph (b) of this subsection that

60 meets all other requirements may be used for the purposes of

61 this evaluation. The evaluation must also include the estimated

62 fair market value, as defined in section 155.40(4), Florida

63 Statutes, of the district assets and a statement signed by the

64 chief executive officer or designee of the independent entity or

65 entities conducting the evaluation that, based on his or her

66 reasonable knowledge and belief, the content and conclusions of

67 the evaluation are true and correct.

68 (b) Publish notice of and conduct a public meeting in

69 accordance with section 189.015(1), Florida Statutes, to provide

70 the public of the district with the opportunity to publicly

71 testify regarding the lease or management agreement. The public

72 notice must contain notice of where the public can find all

73 documents related to the potential lease of the hospital.

74 (2) The board must publish on the hospital district

75 website the evaluation, all documents considered by the board,

76 and a statement signed by the chair of the board that, based on

77 his or her reasonable knowledge and belief, the content of the

78 evaluation is true and correct.

79 (3) If, upon completion of the evaluation of the benefits

80 of a lease, the board elects to consider a lease or management

81 agreement of the hospital in its entirety to a third party, the

82 board must first determine whether there are any qualified

83 lessees. In the process of evaluating any qualified lessee, the

84 board shall:

85 (a) Publicly advertise the meeting at which the proposed

86 lease will be considered by the board in accordance with section

87 286.0105, Florida Statutes; or

88 (b) Publicly advertise the offer to accept proposals in

89 accordance with section 255.0525, Florida Statutes, and receive

90 proposals from all qualified lessees.

91 (4) The members of the board must disclose all conflicts

92 of interest as required by section 112.313, Florida Statutes,

93 including, but not limited to, whether the lease or management

94 agreement will result in a special private gain or loss to any

95 member of the board. Conflicts of interest, if any, with respect

96 to experts retained by the board shall also be disclosed.

97 (5) The evaluation, agreements, disclosures, and any other

98 supporting documents related to the lease or management

99 agreement of the hospital must be published on the hospital

100 district website for 30 calendar days before the board may vote

101 on the proposed agreement identified in subsection (6) of this

102 section to lease the hospital to a not-for-profit or for-profit

103 entity. The hospital district website must include a means by

104 which a person may submit written comments about the proposed

105 transaction to the board.

106 (6) The board must determine, by a majority vote, whether

107 the interests of the public of the district are best served by

108 leasing to a not-for-profit or for-profit entity. The board must

109 make a determination to accept a proposal for lease after

110 consideration of all proposals received and negotiations with a

111 qualified lessee or management entity. The board's determination

112 must include, in writing, detailed findings of all reasons for

113 accepting the proposal. If the accepted bid is less than the

114 fair market value under subsection (1) of this section, the

115 board shall provide a detailed explanation of how the best

116 interests of the public of the district are served by the

117 acceptance of less than the fair market value for the lease of

118 the hospital. The board's findings must include the findings of

119 all information and documents relevant to the board's

120 determination, including, but not limited to:

121 (a) The names and addresses of all parties to the

122 transaction.

123 (b) The location of the hospital and all related

124 facilities.

125 (c) A description of the terms of all proposed agreements.

126 (d) A copy of the lease or management agreement and any

127 related agreements.

128 (e)1. The estimated total value associated with the

129 proposed agreement.

130 2. The estimated fair market value under subsection (1) of

131 this section.

132 3. The proposed lease price.

133 (f) The evaluation as required in subsection (1) of this

134 section and any other valuation prepared at the request of the

135 board, lessee, or managing entity of the hospital.

136 (g) Copies of all other proposals and bids that the board

137 may have received or considered in compliance with subsection

138 (3) of this section.

139 (7) In a public meeting noticed as required pursuant to

140 subsection (1) of this section, the board may approve, by a

141 majority vote, of the lease of the hospital to an entity subject

142 to the terms of a negotiated agreement. The agreement made

143 pursuant hereto shall:

144 (a) Require that the articles of incorporation of the for-

145 profit or not-for-profit corporation be subject to the approval

146 of the board;

147 (b) Require that any not-for-profit corporation is

148 qualified under s. 501(c)(3) of the United States Internal

149 Revenue Code;

150 (c) Provide for the orderly transition of the operation

151 and management of the facilities, including, but not limited to,

152 a change of ownership as described in section 408.807, Florida

153 Statutes, if applicable; and

154 (d) Provide that the leasing or managing entity has made

155 an enforceable commitment that programs and services and quality

156 health care will continue to be provided to the public of the

157 district, particularly to the indigent, the uninsured, and the

158 underinsured.

159 (8) Any interested party as defined in section 155.40(4),

160 Florida Statutes, has the right to seek judicial review of the

161 decision by the board relating to the lease of the hospital in

162 the circuit court where the hospital is located. Judicial review

163 is limited solely to consideration of whether the procedures

164 contained within this section have been followed by the board.

165 (9) If an interested party contests the action by the

166 board, the court will assign costs equitably to the parties.

167 (10) Leases or management agreements not subject to

168 subsections (5)-(9) of this section are limited to:

169 (a) A lease entered into prior to the effective date of

170 this act that is modified, extended, or renewed.

171 (b) A lease or management agreement for a term no greater

172 than 10 years that is entered into so the board may undergo the

173 process as outlined in subsections (5)-(9) of this section.

174 Section 37. (1) The Board of Commissioners of the

175 Highlands County Hospital District may elect, by a majority vote

176 of the members present and voting, to commence an evaluation of

177 the benefits to the public of the district, as described in

178 Section 1, of selling the entirety of the assets of the

179 Highlands County Hospital District to a not-for-profit or for-

180 profit entity to continue to provide health care services to the

181 community if the board executes an agreement that meets the

182 requirements of subsection (7) of this section. In evaluating

183 the benefits of the sale, the board must find that the sale is

184 in the best interest of the public of the district and must

185 state the basis of that finding. To make that determination, the

186 board shall contract with an independent entity or entities that

187 have at least 5 years of experience conducting comparable

188 evaluations of hospital organizations similar in size and

189 function to the hospital to conduct an evaluation of the

190 benefits of selling the district assets according to applicable

191 industry practices. A study completed less than 2 years prior to

192 the public notice under subsection (2) of this section that

193 meets all other requirements may be used for the purposes of

194 this evaluation. The evaluation must be based on the most

195 currently available financial data and must include, but need

196 not be limited to, all of the following:

197 (a) An objective operating comparison of the hospital to

198 other similarly situated hospitals, both not-for-profit and for-

199 profit, which have a similar service mix in order to determine

200 where there is a difference in the cost of operation using,

201 including, but not limited to, publicly available data provided

202 by the Agency for Health Care Administration, data provided by

203 the current operator of the hospital as requested by the board,

204 and the quality metrics identified by the Centers for Medicare

205 and Medicaid Services Core Measures.

206 (b) An assessment of whether there is a net benefit to the

207 community to operate the hospital as a not-for-profit or for-

208 profit entity and use the proceeds of the sale for the purposes

209 described in section 36.

210 (c) An assessment of the fair market value, as defined in

211 section 155.40(4), Florida Statutes, of the district assets.

212 (d) A statement signed by the chief executive officer or

213 designee of the independent entity or entities conducting the

214 evaluation that, based on his or her reasonable knowledge and

215 belief, the content and conclusions of the evaluation are true

216 and correct.

217 (2) The board must publish notice of and conduct a public

218 meeting in accordance with section 189.015(1), Florida Statutes,

219 to provide the public of the district with the opportunity to

220 publicly testify regarding the sale. The public notice must

221 contain notice of where the public can find all documents

222 related to the potential sale of the hospital.

223 (3) The board must publish on the hospital district

224 website the evaluation, all documents considered by the board,

225 and a statement signed by the chair of the board that, based on

226 his or her reasonable knowledge and belief, the content of the

227 evaluation is true and correct.

228 (4) If, upon completion of the evaluation of the benefits

229 of a sale, the board elects to consider a sale of the hospital

230 in its entirety to a third party, the board must first determine

231 whether there are any qualified purchasers. In the process of

232 evaluating any qualified purchaser, the board shall:

233 (a) Publicly advertise the meeting at which the proposed

234 sale will be considered by the board in accordance with section

235 286.0105, Florida Statutes; or

236 (b) Publicly advertise the offer to accept proposals in

237 accordance with section 255.0525, Florida Statutes, and receive

238 proposals from all qualified purchasers.

239 (5) The members of the board must disclose all conflicts

240 of interest as required by section 112.313, Florida Statutes,

241 including, but not limited to, whether the sale will result in a

242 special private gain or loss to any member of the board.

243 Conflicts of interest, if any, with respect to experts retained

244 by the board shall also be disclosed.

245 (6) The evaluation, agreements, disclosures, and any other

246 supporting documents related to the sale of the hospital must be

247 published on the hospital district website for 30 calendar days

248 before the board may vote on the proposed agreement identified

249 in subsection (8) of this section to sell the hospital to a not-

250 for-profit or for-profit entity. The hospital district website

251 must include a means by which a person may submit written

252 comments about the proposed transaction to the board and obtain

253 copies of the findings and documents required under subsections

254 (1) and (7) of this section.

255 (7) The board must determine, by a majority vote, whether

256 the interests of the public of the district are best served by

257 selling to a not-for-profit or for-profit entity. The board must

258 make a determination to accept a proposal for sale after

259 consideration of all proposals received and negotiations with a

260 qualified purchaser. The board's determination must include, in

261 writing, detailed findings of all reasons for accepting the

262 proposal. If the accepted bid is less than the fair market value

263 under subsection (1) of this section, the board shall provide a

264 detailed explanation of how the best interests of the public of

265 the district are served by the acceptance of less than the fair

266 market value for the purchase of the hospital. The board's

267 findings must include the findings of all information and

268 documents relevant to the board's determination, including, but

269 not limited to:

270 (a) The names and addresses of all parties to the

271 transaction.

272 (b) The location of the hospital and all related

273 facilities.

274 (c) A description of the terms of all proposed agreements.

275 (d) A copy of the proposed sale and any related

276 agreements.

277 (e)1. The estimated total value associated with the

278 proposed agreement.

279 2. The estimated fair market value, as defined in section

280 155.40, Florida Statutes, associated with the proposed

281 agreement.

282 3. The proposed acquisition price.

283 (f) The evaluation as required in subsection (1) of this

284 section and any other valuation prepared at the request of the

285 board, lessee, or managing entity of the hospital.

286 (g) Copies of all other proposals and bids that the board

287 may have received or considered in compliance with subsection

288 (3) of this section.

289 (8) In a public meeting noticed as required pursuant to

290 subsection (1) of this section, the board may approve, by a

291 majority vote, of the sale of the hospital to an entity subject

292 to the terms of a negotiated agreement. The agreement made

293 pursuant hereto shall:

294 (a) Require that the articles of incorporation of the for-

295 profit or not-for-profit corporation be subject to the approval

296 of the board;

297 (b) Require that any not-for-profit corporation is

298 qualified under s. 501(c)(3) of the United States Internal

299 Revenue Code;

300 (c) Provide for the orderly transition of the operation

301 and management of the facilities, including, but not limited to,

302 a change of ownership as described in section 408.807, Florida

303 Statutes, if applicable; and

304 (d) Provide that the acquiring entity has made an

305 enforceable commitment that programs and services and quality

306 health care will continue to be provided to all residents of the

307 district, particularly to the indigent, the uninsured, and the

308 underinsured in perpetuity so long as the succeeding entity is

309 in operation or, if otherwise agreed to, until the succeeding

310 entity has otherwise met all obligations set forth in the

311 agreement.

312 (9) If the board approves the sale, the hospital district

313 shall file a copy of the agreement with the Department of

314 Commerce no later than 10 calendar days after the later of:

315 (a) The approval of the change of ownership pursuant to

316 section 408.807, Florida Statutes, if applicable; or

317 (b) The date of closing, if no change of license ownership

318 is required.

319 (10) The residual proceeds of the sale are surplus funds

320 and must be used in the same manner as described in Section 36.

321 (11) No later than 30 calendar days after the complete

322 sale of the district's assets and liabilities, as described in

323 section 155.40(21), Florida Statutes, the board shall notify the

324 Department of Commerce of the sale. The Highlands County

325 Hospital District shall be dissolved 30 calendar days following

326 the receipt of the notice by the department.

327 (12) If the board fails to approve for any reason an

328 agreement that would result in the sale of the hospital to a

329 not-for-profit or for-profit entity that will continue to

330 provide health care services for the county, the board shall

331 continue to exist as the Highlands County Hospital District.

332 (13) Any interested party as defined in section 155.40(4),

333 Florida Statutes, has the right to seek judicial review of the

334 decision by the board to sell the district assets, including,

335 but not limited to, the hospital, in the circuit court where the

336 hospital is located. Judicial review is limited solely to

337 consideration of whether the procedures contained within this

338 section have been followed by the board.

339 (14) If an interested party contests the action by the

340 board, the court will assign costs equitably to the parties.

341 Section 38. The provisions of this act shall be construed

342 liberally in order to carry out its purpose effectively. Any of

343 the enumerated powers herein shall not be construed as a

344 limitation against any remaining powers but shall be construed

345 as cumulative. To the extent necessary to fully effectuate the

346 purpose of this act, the provisions hereof shall supersede and

347 preempt the application of section 155.40, Florida Statutes,

348 relating to the sale or lease of the hospital.

349 Section 2. This act shall take effect upon becoming a law.