MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Public Health and Welfare

By: Representative Guice

AN ACT TO AMEND SECTION 41-13-35, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT IF ANY COMMUNITY HOSPITAL MAKES A PROFIT DURING ANY FISCAL YEAR, AND THERE IS ANY OUTSTANDING INDEBTEDNESS ISSUED BY THE OWNER OR OWNERS OF THE HOSPITAL FOR THE BENEFIT OF THE HOSPITAL THAT IS SECURED BY THE FULL FAITH AND CREDIT OF THE OWNER OR OWNERS, THE OWNER OR OWNERS OF THE HOSPITAL HAVING THE OUTSTANDING INDEBTEDNESS MAY REQUEST THAT THE BOARD OF TRUSTEES OF THE HOSPITAL TRANSFER A PORTION OF THE HOSPITAL'S PROFIT TO THE OWNER OR OWNERS, NOT EXCEEDING A TOTAL OF 50% OF THE HOSPITAL'S PROFIT; TO REQUIRE THE BOARD OF TRUSTEES OF THE HOSPITAL TO TRANSFER TO THE HOSPITAL OWNER OR OWNERS THE RESPECTIVE AMOUNTS OF THE HOSPITAL'S PROFIT THAT ARE REQUESTED BY THE OWNER OR OWNERS; TO REQUIRE EACH OF THE OWNERS RECEIVING THE FUNDS TO USE THE TRANSFERRED FUNDS FOR THE REPAYMENT OF THE OUTSTANDING INDEBTEDNESS ISSUED BY THE OWNER FOR THE BENEFIT OF THE HOSPITAL THAT IS SECURED BY THE FULL FAITH AND CREDIT OF THE OWNER; TO AMEND SECTION 41-13-23, MISSISSIPPI CODE OF 1972, TO REQUIRE OWNERS OF COMMUNITY HOSPITALS THAT RECEIVE A PORTION OF THE HOSPITAL'S PROFIT UNDER THE PRECEDING SECTION IN ANY FISCAL YEAR TO REDUCE THE RATE OF THE AD VALOREM TAX REQUIRED TO BE LEVIED FOR REPAYMENT OF OUTSTANDING INDEBTEDNESS ISSUED BY THE OWNER FOR THE BENEFIT OF THE HOSPITAL BY AN AMOUNT THAT WOULD PRODUCE THE SAME AMOUNT OF FUNDS RECEIVED BY THE OWNER UNDER THE PRECEDING SECTION; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 41-13-35, Mississippi Code of 1972, is amended as follows:

41-13-35. (1) The board of trustees of any community hospital shall have full authority to appoint an administrator, who shall not be a member of the board of trustees, and to delegate reasonable authority to such administrator for the operation and maintenance of such hospital and all property and facilities otherwise appertaining thereto.

(2) The board of trustees shall have full authority to select from its members, officers and committees and, by resolution or through the board bylaws, to delegate to such officers and committees reasonable authority to carry out and enforce the powers and duties of the board of trustees during the interim periods between regular meetings of the board of trustees; provided, however, that any such action taken by an officer or committee shall be subject to review by the board, and actions may be withdrawn or nullified at the next subsequent meeting of the board of trustees if the action is in excess of delegated authority.

(3) The board of trustees shall be responsible for governing the community hospital under its control and shall make and enforce staff and hospital bylaws and/or rules and regulations necessary for the administration, government, maintenance and/or expansion of such hospitals. The board of trustees shall keep minutes of its official business and shall comply with Section 41-9-68.

(4) The decisions of said board of trustees of the community hospital shall be valid and binding unless expressly prohibited by applicable statutory or constitutional provisions.

(5) The power of the board of trustees shall specifically include, but not be limited to, the following authority:

(a) To deposit and invest funds of the community hospital in accordance with Section 27-105-365;

(b) To establish such equitable wage and salary programs and other employment benefits as may be deemed expedient or proper, and in so doing, to expend reasonable funds for such employee salary and benefits. Allowable employee programs shall specifically include but not be limited to, medical benefit, life, accidental death and dismemberment, disability, retirement and other employee coverage plans. The hospital may offer and fund such programs directly or by contract with any third party and shall be authorized to take all actions necessary to implement, administer and operate such plans, including payroll deductions for such plans;

(c) To authorize employees to attend and to pay actual expenses incurred by employees while engaged in hospital business or in attending recognized educational or professional meetings;

(d) To enter into loan or scholarship agreements with employees or students to provide educational assistance where such student or employee agrees to work for a stipulated period of time for the hospital;

(e) To devise and implement employee incentive programs;

(f) To recruit and financially assist physicians and other health care practitioners in establishing, or relocating practices within the service area of the community hospital including, without limitation, direct and indirect financial assistance, loan agreements, agreements guaranteeing minimum incomes for a stipulated period from opening of the practice and providing free office space or reduced rental rates for office space where such recruitment would directly benefit the community hospital and/or the health and welfare of the citizens of the service area;

(g) To contract by way of lease, lease-purchase or otherwise, with any agency, department or other office of government or any individual, partnership, corporation, owner, other board of trustees, or other health care facility, for the providing of property, equipment or services by or to the community hospital or other entity or regarding any facet of the construction, management, funding or operation of the community hospital or any division or department thereof, or any related activity, including, without limitation, shared management expertise or employee insurance and retirement programs, and to terminate said contracts when deemed in the best interests of the community hospital;

(h) To file suit on behalf of the community hospital to enforce any right or claims accruing to the hospital and to defend and/or settle claims against the community hospital and/or its board of trustees;

(i) To sell or otherwise dispose of any chattel property of the community hospital by any method deemed appropriate by the board where such disposition is consistent with the hospital purposes or where such property is deemed by the board to be surplus or otherwise unneeded;

(j) To let contracts for the construction, remodeling, expansion or acquisition, by lease or purchase, of hospital or health care facilities, including real property, within the service area for community hospital purposes where such may be done with operational funds without encumbrancing the general funds of the county or municipality, provided that any contract for the purchase of real property must be ratified by the owner;

(k) To borrow money and enter other financing arrangements for community hospital and related purposes and to grant security interests in hospital equipment and to pledge a percentage of hospital revenues as security for such financings where needed; provided that the owner shall specify by resolution the maximum borrowing authority and maximum percent of revenue which may be pledged by the board of trustees during any given fiscal year;

(l) To expend hospital funds for public relations or advertising programs;

(m) To offer the following inpatient and outpatient services, after complying with applicable health planning, licensure statutes and regulations, whether or not heretofore offered by such hospital or other similar hospitals in this state and whether or not heretofore authorized to be offered, long-term care, extended care, home care, after-hours clinic services, ambulatory surgical clinic services, preventative health care services including wellness services, health education, rehabilitation and diagnostic and treatment services; to promote, develop, operate and maintain a center providing care or residential facilities for the aged, convalescent or handicapped; and to promote, develop and institute any other services having an appropriate place in the operation of a hospital offering complete community health care;

(n) To promote, develop, acquire, operate and maintain on a nonprofit basis, or on a profit basis if the community hospital's share of profits is used solely for community hospital and related purposes in accordance with this chapter, either separately or jointly with one or more other hospitals or health-related organizations, facilities and equipment for providing goods, services and programs for hospitals, other health care providers, and other persons or entities in need of such goods, services and programs and, in doing so, to provide for contracts of employment or contracts for services and ownership of property on terms that will protect the public interest;

(o) To establish and operate medical offices, child care centers, wellness or fitness centers and other facilities and programs which the board determines are appropriate in the operation of a community hospital for the benefit of its employees, personnel and/or medical staff which shall be operated as an integral part of the hospital and which may, in the direction of the board of trustees, be offered to the general public. If such programs are not established in existing facilities or constructed on real estate previously acquired by the owners, the board of trustees shall also have authority to acquire, by lease or purchase, such facilities and real property within the service area, whether or not adjacent to existing facilities, provided that any contract for the purchase of real property shall be ratified by the owner. The trustees shall lease any such medical offices to members of the medical staff at rates deemed appropriate and may, in its discretion, establish rates to be paid for the use of other facilities or programs by its employees or personnel or members of the public whom the trustees may determine may properly use such other facilities or programs;

(p) Provide, at its discretion, ambulance service and/or to contract with any third party, public or private, for the providing of such service;

(q) Establish a fair and equitable system for the billing of patients for care or users of services received through the community hospital, which in the exercise of the board of trustees' prudent fiscal discretion, may allow for rates to be classified according to the potential usage by an identified group or groups of patients of the community hospital's services and may allow for standard discounts where the discount is designed to reduce the operating costs or increase the revenues of the community hospital. Such billing system may also allow for the payment of charges by means of a credit card or similar device and allow for payment of administrative fees as may be regularly imposed by a banking institution or other credit service organization for the use of such cards;

(r) To establish as an organizational part of the hospital or to aid in establishing as a separate entity from the hospital, hospital auxiliaries designed to aid the hospital, its patients, and/or families and visitors of patients, and when the auxiliary is established as a separate entity from the hospital, the board of trustees may cooperate with the auxiliary in its operations as the board of trustees deems appropriate; and

(s) To make any agreements or contracts with the federal government or any agency thereof, the State of Mississippi or any agency thereof, and any county, city, town, supervisors district or election district within this state, jointly or separately, for the maintenance of charity facilities.

(6) No board of trustees of any community hospital may accept any grant of money or other thing of value from any not-for-profit or for-profit organization established for the purpose of supporting health care in the area served by the facility unless two-thirds (2/3) of the trustees vote to accept the grant.

(7) No board of trustees, individual trustee or any other person who is an agent or servant of the trustees of any community hospital shall have any personal financial interest in any not-for-profit or for-profit organization which, regardless of its stated purpose of incorporation, provides assistance in the form of grants of money or property to community hospitals or provides services to community hospitals in the form of performance of functions normally associated with the operations of a hospital.

(8) If any community hospital makes a net profit during any fiscal year, and there are any outstanding bonds, notes or other evidences of indebtedness issued under this chapter or any other law by the owner or owners of the hospital for the benefit of the hospital that are secured by the full faith, credit and resources of the owner or owners, the owner or owners of the hospital having the outstanding indebtedness may request, within thirty (30) days after the amount of the hospital's profit is determined, that the board of trustees of the hospital transfer a portion of the hospital's profit to the owner or owners having the outstanding indebtedness. Not more than a total of fifty percent (50%) of the hospital's profit may be requested by all owners of the hospital; if there is more than one (1) owner of the hospital having outstanding indebtedness for the benefit of the hospital, the owners must agree among themselves the amount of the hospital's profit that each will request from the board of trustees before making the requests, so that the total amount requested by all owners does not exceed fifty percent (50%) of the profit. Within thirty (30) days after receiving any such request, the board of trustees shall transfer to the hospital owner or owners the respective amounts of the hospital's profit that are requested by the owner or owners, and each of the owners receiving the funds shall use the transferred funds for the repayment of the outstanding bonds, notes or other evidences of indebtedness issued by the owner for the benefit of the hospital that are secured by the full faith, credit and resources of the owner.

SECTION 2. Section 41-13-23, Mississippi Code of 1972, is amended as follows:

41-13-23. (1) All bonds, notes or other evidences of indebtedness issued under Section 41-13-19 may be secured by a pledge of the full faith, credit, and resources of the county, city, town, supervisors district, judicial district or election district issuing the same. There shall annually be levied upon all taxable property within such county, city, town, supervisors district, judicial district or election district, as the case may be, an ad valorem tax, in addition to all other taxes, sufficient to provide for the payment of the principal of and the interest on said bonds, notes or other evidences of indebtedness secured by a pledge of the full faith, credit, and resources of the issuing entity as the same respectively matures and accrues. If an owner of a community hospital is levying the ad valorem tax required by this subsection and the owner receives a portion of the hospital's profit under Section 41-13-35(8) in any fiscal year, the owner shall reduce the rate of the ad valorem tax levied under this subsection during that fiscal year by an amount that would produce the same amount of funds received by the owner under Section 41-13-35(8).

(2) All bonds, notes or other evidences of indebtedness issued under Section 41-13-19 may be secured by a pledge of all or a specified portion of the annual general or special revenues of the facility for which the same were issued to acquire, construct, expand, equip or furnish, or by a pledge of any unrestricted unencumbered income from an endowment or other trust funds available to the board of trustees of the facility for which the same were issued to acquire, construct, expand, equip or furnish. The security for such bonds, notes or other evidences of indebtedness authorized and provided for by this subsection may be in addition to or in lieu of the pledge of the full faith, credit, and resources of the issuing entity as provided in subsection (1) hereof.

SECTION 3. This act shall take effect and be in force from and after July 1, 1997.