Bill Summary for S 681 (2019-2020)

Summary date: 

Jun 28 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 681 (Public) Filed Thursday, June 20, 2019
Intro. by Berger, Tillman.

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Bill summary

Senate committee substitute to the 1st edition makes the following changes.

Amends new Article 2, Rural Health Care Stabilization Program, to GS Chapter 131A as follows. Eliminates eligible applicant from the Article's defined terms and makes changes throughout the Article to no longer reference the term. Also eliminates nonprofit agency from the defined terms. Now includes in the defined terms loan, an obligation to pay interest in accordance with the loan agreement. Makes further clarifying and conforming changes to the defined terms. Concerning the administration of the Rural Health Care Stabilization Program (Program), no longer requires UNC Health Care to collaborate with the Local Government Commission (Commission). Makes technical and organizational changes to UNC Health Care's administrative duties and responsibilities, and adds the duty to establish an application period and a process for submitting an application for a loan under the Program and any other duties and responsibilities necessary for the implementation of the Program and enforcement of the loan agreements under the Program. Adds a new provision to exclude UNC Health Care from applying for a loan or being a partner in a partnership that applies for a loan under the Program. Adds that the Commission cannot approve a loan application if the issuance of the loan would result in a material, direct benefit to UNC Health Care at the time the application and Plan are submitted for approval. Removes the Commission's rulemaking authority, now limiting the rulemaking authority concerning Program implementation to UNC Health Care alone.

Regarding applications for a loan under the Program, allows a public agency, an owner of a health care facility, or a partnership of one or more of those entities, to apply for a loan under the Program to benefit an eligible hospital, as defined, and requires applicants to develop and submit a hospital stabilization plan to UNC Health Care during the application period (substantively similar to the previous application requirements for eligible applicants). Now entitles an applicant disapproved by UNC Health Care to engage a disinterested and qualified third party approved by the Commission to evaluate the applicant's Plan to determine if the applicant demonstrates a financially sustainable health care service model for the community in which the eligible hospital is located, and to subsequently seek Commission approval of the loan based on the written evaluation of its Plan by the third party (previously, provided for an applicant to request the Commission to review UNC Health Care's disapproval recommendation).

Concerning the award and terms of loans under the Program, requires the Commission to approve all loans under the Program prior to UNC Health Care's awarding the loan. Explicitly states that if the Commission enters an order denying the loan, the proceedings under new Article 2 are at an end. Makes technical and clarifying changes to the conflict of interest provisions. Requires the Commission to review UNC Health Care's recommendations, an applicant's Plan and any other relevant information, as well as the third party evaluation, if applicable. Sets forth additional information the Commission can require the applicant and eligible hospital (if different) to provide for consideration (previously, limited to current and historical financial information). Establishes the following four findings that must be satisfied for the Commission to approve a loan application: (1) that the loan is necessary or expedient; (2) that the amount proposed is adequate and not excessive for the proposed purpose of the loan; (3) that the Plan demonstrates a financially sustainable health care service model for the community in which the eligible hospital is located; and (4) that the applicant's debt management procedures and policies are good, or that reasonable assurances have been given that the debt will be repaid. Regarding the award of loans, requires UNC Health Care to execute the terms of the loan agreement upon approval of the loan by the Commission. Authorizes UNC Health Care, rather than the Commission, to require changes to the governance structure of the eligible hospital. Eliminates the procedure for reconsideration of a loan's modified agreement for approval. Makes further technical, clarifying, and organizational changes.

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