Connecticut Governor Signs Bill to Modify Nonprofit, For-Profit Hospital Conversions

Governor Dannel P. Malloy signed a bill allowing Connecticut's nonprofit hospitals to convert to for-profit entities into law Tuesday.

The hospital conversion bill, as it is called, stems from an effort from for-profit, Dallas-based Tenet Healthcare to acquire several hospitals in Connecticut in partnership with Yale-New Haven (Conn.) Health System. Tenet and Yale-New Haven partnered in March.

According to the Connecticut Mirror, the law removes a barrier in an existing law that made it difficult for for-profit hospitals to operate in the state. Previously, for-profit hospitals in the state could not establish medical foundations, a hurdle the law has struck.

The law also expands state oversight of the sale of nonprofit hospitals. The publish health commissioner has added criteria to ensure nonprofit hospital sales will assure the affected community continued access to high quality and affordable healthcare. The hospital and purchaser must also hold a public hearing in the town or city where the hospital is located.

The law also leaves the state with significantly more oversight over transactions that involve physician practices.

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