Updated March 29 at 6:27pm

Chafee to allow amended hospital bill to become law


PROVIDENCE – Gov. Lincoln D. Chafee announced Friday afternoon that he would allow the legislation changing the Hospital Conversions Act to become law without his signature.

In his statement, Chafee said his primary concerns with the new law is the language relating to judicial review of regulatory agency decisions, and the lack of what he deemed a sufficient waiting period.

“However, after meeting with interested parties on both sides of the issue, my concerns have been satisfactorily addressed, and I believe that the good in this important bill outweighs the bad,” Chafee said. He promised to work with the General Assembly next year to introduce legislation clarifying the judicial review language.

“Health care is an important industry in our state, supporting tens of thousands of Rhode Island jobs, and the Hospital Conversions Act will serve to further strengthen this critical sector of our economy,” Chafee said.

One of the principal changes in the new law is the ability of for-profit hospital systems, such as Steward Health Care of Boston, to purchase additional nonprofit hospitals within the Rhode Island market without having to wait for three years.

Steward’s deal to purchase Landmark Medical Center in Woonsocket and its sister facility, the Rehabilitation Hospital of Rhode Island in North Smithfield, is expected to be completed in early July. Steward has said that upon completion of the transaction, it is interested in purchasing other hospitals in the Rhode Island market.

CharterCare Health Partners, which has been actively seeking financial partners, is considered one of the hospitals that Steward is interested in acquiring.

One other significant change in the new law may impact the purchase of Westerly Hospital. Under the new law, nonprofit hospitals may seek an expedited review by state regulators for purchase of other nonprofit hospitals under financial duress. The phrase “Rhode Island” had been removed from an earlier version of the legislation, enabling out-of-state hospitals to participate. On June 13, Superior Court Judge Brian Stern approved a $69 million “stalking horse” bid from Lawrence & Memorial Hospital in New London, Conn., to purchase Westerly Hospital, now in receivership. As a result, if the bid from Lawrence & Memorial were to emerge as the winning bid, the hospital could seek such an expedited review.


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