MISSISSIPPI LEGISLATURE
2022 Regular Session
To: Judiciary A; Public Health and Human Services
By: Representative McGee
AN ACT TO CREATE THE SOUTH MISSISSIPPI REGIONAL HEALTH CARE AUTHORITY ACT OF 2022; TO DECLARE THE LEGISLATIVE PURPOSE OF THE AUTHORITY; TO PRESCRIBE THE POWERS AND DUTIES OF THE AUTHORITY; TO GRANT THE AUTHORITY CERTAIN POWERS; TO EXEMPT THE AUTHORITY FROM CERTAIN STATUTES APPLICABLE TO COMMUNITY HOSPITALS AND OTHER GOVERNING AUTHORITIES; TO PROVIDE FOR STATE ACTION IMMUNITY; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Short title. This act shall be known and may be cited as the "South Mississippi Regional Health Care Authority Act of 2022."
SECTION 2. Legislative intent and general purposes. The Legislature finds and declares as follows:
(a) The needs of the residents of South Mississippi can best be served by one or more regional health care authorities having the legal, financial and operational flexibility to take full advantage of opportunities and challenges presented by the evolving health care environment and to take whatever actions are necessary to enable the authority's continuation as a system that provides the finest possible quality of care consistent with reasonable costs.
(b) In this environment, the regional health care authority must have the ability to respond to changing conditions by having the power to develop efficient and cost-effective methods and structures to provide for health care needs, while maintaining a public mission and character. Accordingly, the Legislature finds that there is a compelling interest in establishing a structure and process for a community hospital to be reconstituted, if desired, in order to be able to adapt to this dynamic environment, to operate efficiently, to offer competitive health care services, to respond more effectively to new developments and regulatory changes in the health care area, and to continue to serve and promote the health, wellness and welfare of the citizens of South Mississippi. The general purpose of this act is to achieve these objectives and promote the public health and welfare of the residents of South Mississippi by allowing a community hospital to be converted into the regional health care authority and to operate as provided in this act. The regional health care authority established under this act shall be a public and governmental body, and a political subdivision of the state. The acquisition, operation and financing of hospitals and other health care facilities by the regional health care authority are declared to be for a public and governmental purpose and a matter of public necessity.
(c) The geographic area of South Mississippi to be served by the regional health care authority includes rural populations and other groups that experience significant health disparities. Health disparities are differences in health status when compared to the population overall, often characterized by indicators such as higher incidence of disease and/or disability, increased mortality rates, and lower life expectancies. Rural risk factors for health disparities include geographic isolation, lower socioeconomic status, higher rates of health risk behaviors, and limited access to health care specialists and subspecialists. As a result of these health disparities, the residents of the area to be served by the regional health authority have high rates of mortality and morbidity, heart disease, cancer and other illnesses. The region also includes a high percentage of uninsured individuals and Medicaid patients, which are medically underserved groups. Community hospitals that currently serve this area have demonstrated their ability to provide high quality health care and to improve health conditions and outcomes as well as access to care. The conversion of one or more of the community hospitals into a regional health care authority will significantly strengthen the ability to serve the health care needs of the residents of this region.
(d) The regional health care authority's investment of significant public assets and its efforts to provide high quality heath care services to medically underserved populations are jeopardized by the authority's potential limits on its ability to collaborate and consolidate with other public and private health care facilities and providers. The Legislature expressly finds that the benefits of collaboration and consolidation by the regional health care authority outweigh any adverse impact on competition. The benefits of the authority's efforts to collaborate and consolidate include, but are not limited to, preserving and expanding needed health care services in its service area; consolidating unneeded or duplicative health care services; enhancing the quality of, and expanding access to, health care delivered to medically underserved and rural populations; and lowering costs and improving the efficiency of the health care services it delivers. Based on the findings contained in this section, the Legislature affirmatively expresses a policy to allow the regional health care authority to consolidate with other health care facilities and providers and to engage in collaborative activities consistent with its health care purposes, notwithstanding that those consolidations and collaborations may have the effect of displacing competition in the provision of hospital or other health care related services. With respect to the consolidations, collaborative activities and other activities contemplated in this section and in Section 7 of this act, the regional health care authority and the public or private entities with which it consolidates, collaborates or enters into any of the transactions set forth in this section or in Section 7 of this act, shall be immune from liability under the federal and state antitrust laws and are provided with state action immunity from federal and state antitrust laws to the fullest extent possible; however, the state action immunity from federal and state antitrust laws shall not apply:
(i) To health care facility acquisitions or joint ventures in which the regional health care authority does not maintain a majority, controlling interest in the acquired health care facility or joint venture; or
(ii) Outside of the geographic area bordered by U.S. Interstate Highway 20 on the northern border, U.S. Interstate Highway 10 on the southern border, U.S. Interstate 55 on the western border, and the state line border between Mississippi and Alabama on the eastern border.
Additionally, the state action immunity from federal and state antitrust laws shall not apply to any private party that becomes the successor to the regional health care authority through the purchase or lease of the authority.
(e) It is the intent of the Legislature that this act be liberally construed so as to give effect to the intent, purposes and findings described in this section, and insofar as the provisions of this act may be inconsistent with the provisions of any other law, the provisions of this act shall be controlling.
SECTION 2. Definitions. As used in this act, the following words and phrases have the meanings as defined in this section unless the context clearly indicates otherwise:
(a) "Authority" or "regional health care authority" means a regional health care authority established as a public body in accordance with this act for the purposes and with the powers set forth in this act.
(b) "Board" or "board of trustees" means the board of trustees of the authority.
(c) "Code" means the Mississippi Code of 1972, as amended.
(d) "Community hospital" has the meaning as defined in Section 41-13-10(c).
(e) "Health care facility" means and includes hospitals, psychiatric hospitals, chemical dependency hospitals, skilled nursing facilities, end-stage renal disease facilities, ambulatory surgical facilities, home health agencies, comprehensive medical rehabilitation facilities, and all other facilities and programs established or operated for the provision or offering of health care services and related services.
(f) "Owner" means and includes the owners, as defined in Section 41-13-10(d), of any community hospital located in Forrest County, Mississippi, or Harrison County, Mississippi.
SECTION 3. Conversion of community hospital into health care authority. The owner may convert any community hospital owned by the owner into a regional health care authority through the following process:
(a) Whenever the board of trustees of any community hospital owned by the owner decides that it is in its best interests to convert the community hospital into the regional health care authority, it shall adopt a resolution setting forth why such a conversion is in the best interests of the public, and recommending that the owner consider such a conversion.
(b) Upon receipt of the board of trustees' resolution recommending conversion of the community hospital into the regional health care authority, the owner shall review and consider whether such a conversion is in the best interests of the communities served by the community hospital. The owner may engage a competent professional health care or management consulting firm to evaluate the proposed conversion.
(c) As part of this evaluation process, the owner shall approve a resolution calling for a public hearing on the question of converting the community hospital owned by the owner into the regional health care authority. Notice of the date, hour, place and purpose of the public hearing shall be published at least once each week for two (2) consecutive weeks in a newspaper of general circulation in the county of the owner, the last such publication to be at least one (1) week before the date set for the hearing. The public hearing shall be conducted before the owner, and all interested persons shall have the opportunity to be heard.
(d) After the public hearing, if the owner decides to convert the community hospital into the regional health care authority, it shall adopt a resolution setting forth why such conversion is in the best interests of the public and the residents of the areas served by the community hospital. The resolution shall:
(i) Declare and establish the regional health care authority;
(ii) Designate the principal office address of the authority; and
(iii) Approve the appointment of the board of trustees of the authority as provided for in Section 5 of this act.
The resolution shall be duly adopted at any regular or special meeting, or any adjournment of a regular or special meeting, of the owner and shall be duly spread upon its minutes. Any such resolution shall be sufficient for the purposes of this paragraph (d) if it indicates an intention to obtain the benefits of this act. Upon the adoption of such a resolution by the owner, the regional health care authority shall become and constitute a public body, and a body politic, with all of the powers under this act. The adoption of the resolution shall have the effect of also conferring on and delegating to the board of trustees of the regional health care authority, and the officers and members of such board, the same authority, powers, rights, privileges and immunities with respect to the operation and maintenance of the regional health care authority as are conferred on the board of trustees, and the officers and members thereof, of community hospitals established and organized under the provisions of Sections 41-13-15 through 41-13-53 of the Code, except as amended by or otherwise provided in this act. The regional health care authority established under this act shall be and constitute a political subdivision of the state, and shall hold, have and enjoy all of the rights, benefits and privileges accorded political subdivisions of the state under the Mississippi Constitution, the Code, or otherwise.
(e) If the regional health care authority is established under this act, the owner may enter into an agreement with the authority for the orderly transfer and conveyance to the authority of the community hospital, and any and all health care facilities and all other properties, real or personal, and all funds and assets, tangible or intangible, relative to the ownership or operation of the community hospital and such health care facilities that may be owned by such owner, and all other permits, certificates, certificates of need, licenses, regulatory rights and interests, functions and outstanding obligations of the community hospital. Such transfer or conveyance shall be authorized by a resolution duly adopted by the owner.
(f) In any suit, action or proceeding involving the validity or enforcement of or related to any contract of the regional health care authority, the authority shall be conclusively deemed to have been established in accordance with this act upon proof of the adoption of the resolution by the owner. A copy of such resolution, duly certified by the secretary of the owner, shall be admissible in evidence in any such suit, action or proceeding, and shall be conclusive proof of the establishment of the authority.
(g) The regional health care authority established under this act may assume and be assigned any and all contracts, leases and other legal obligations of the community hospital owned by the owner, along with all accompanying rights, interests and privileges, upon the approval of the board of trustees of the regional health care authority as set forth in a resolution adopted by such board.
(h) Notwithstanding any other provision of this act, the owner may not convert a community hospital into a regional health care authority if the community hospital is managed or controlled by a private party.
SECTION 4. Board of trustees. The owner is authorized to appoint trustees for the purpose of operating and governing the regional health care authority, as follows:
(a) The board of trustees shall consist of nine (9) members. Five (5) of the trustees shall be adult legal residents of the county for which the owner serves as the governing authority, and the remaining four (4) trustees shall be adult legal residents of any county located south of U.S. Interstate Highway 20.
(b) Initially, the board of trustees shall be appointed as follows: one (1) for a term of one (1) year, two (2) for a term of two (2) years, two (2) for a term of three (3) years, two (2) for a term of four (4) years, and two (2) for a term of five (5) years. Thereafter, all terms shall be for five (5) years from the expiration date of the previous term. Any vacancy on the board of trustees shall be filled within ninety (90) days by appointment by the owner for the remainder of the unexpired term.
(c) In order to be eligible for appointment as a trustee, the appointee must have no felony convictions and possess at least a high school diploma or the equivalent. The appointee may not own an interest in, or be an officer or employee of, a company or business that provides goods or services in direct competition with the regional health care authority, and the appointee's spouse may not own an interest in, or be an officer or employee of, such company or business.
(d) The owner may remove a trustee after appointment for good cause shown, upon a unanimous vote of all members of the governing board of the owner, or upon a majority vote of the governing board of the owner after a recommendation from the board of trustees of the regional health care authority that the trustee be removed. The owner may likewise remove a trustee from office upon a majority vote of the governing board of the owner for failure of the trustee to attend at least fifty percent (50%) of the regularly scheduled meetings of the board of trustees during the twelve-month period preceding the vote, or for violation of any statute relating to the responsibilities of the trustee's office, based upon the recommendation of the majority of the remaining trustees.
(e) The board of trustees provided for in this section may, in its discretion, where funds are available, compensate each trustee per diem in at least the amount established by Section 25-3-69 up to the maximum amount of not more than One Hundred Fifty Dollars ($150.00) for each meeting of the board of trustees or meeting of a committee established by the board of trustees where the trustee was in attendance, and in addition thereto, provide meals at the meetings and compensate each member attending travel expenses at the rate authorized by Section 25-3-41 for actual mileage traveled to and from the place of meeting.
(f) The members of the board of trustees of the regional health care authority may, at the discretion of the board, choose to participate in any hospital medical benefit plan or health insurance plan of the authority, whether self-funded or otherwise, which may be in effect for authority employees. Any member of the board of trustees choosing to participate in such plan shall pay the same amount for his or her participation in the plan as authority employees are required to pay for their participation in such plan.
SECTION 5. Certain powers and authority of owners and boards of trustees of community hospitals granted to owner and board of trustees of regional health care authority. The owner and the board of trustees of the regional health care authority shall have, respectively, the same powers, authority, rights, privileges and immunities conferred on the owners and the boards of trustees of community hospitals, as set forth in Sections 41-13-11 through 41-13-53, inclusive, and Sections 41-13-101 through 41-13-107, inclusive, except as amended by or otherwise provided in this act, and further, except as follows:
(a) Any contract for the purchase of real property by the board of trustees of the authority shall not require ratification or approval by the owner;
(b) The borrowing authority of the board of trustees of the authority shall not be subject to any limitation, restriction or prior approval by the owner, as set forth in Section 41-13-35(5)(k);
(c) The board of trustees of the regional health care authority shall not be required to submit to the owner a proposed budget for the ensuing fiscal year, as set forth in Section 41-13-47, and the owner shall not be required to approve such budget; and
(d) The board of trustees shall not be required to file with the owner a full fiscal year report, as set forth in Section 41-13-47.
SECTION 6. Additional powers of board of trustees of authority. In addition to the powers otherwise granted by this act or any other act or law of this state, or by any state regulation or federal law or regulation, and to the extent at the time not prohibited by the Mississippi Constitution, in order to achieve the important health care purposes of this act, the board of trustees of the regional health care authority shall have, together with all powers incidental thereto or necessary to discharge the powers granted specifically in this act, the following powers and authority:
(a) To acquire hospitals, health care facilities and other health care-related operations and assets, through direct purchase, merger, consolidation, lease or other means;
(b) To enter into joint ventures, joint operating agreements, or similar arrangements with other public or private health-care related organizations, or with for-profit or nonprofit corporations, limited liability companies, or other organizations, either directly or through a nonprofit corporation formed or owned by the regional health care authority, for the joint operation of all or part of the regional health care authority, or the joint operation of any health care facilities or health care services, and in doing so, to convey the regional health care authority's assets, service lines, or facilities to the joint venture or to any other organization or entity for fair market value, and to provide for contracts of employment or contracts for services and ownership of property that will protect the public interest;
(c) To make capital contributions, loans, debt or equity financing to or for any joint venture or similar arrangement in which the regional health care authority, or any nonprofit corporation formed or owned by the regional health care authority, has or acquires an ownership interest, and to guarantee loans and any other obligations for such purposes;
(d) To establish arrangements for the regional health care authority to participate in financial integration and/or clinical integration or clinically integrated networks with a joint venture, with other public or private health-related organizations, or through a joint operating agreement;
(e) To have an ownership interest in, make capital contributions to, and assume financial risk under, accountable care organizations or similar organizations;
(f) To enter into any contract for a term of any length, regardless of whether the length or term of the contract exceeds the term of the board of trustees of the regional health care authority;
(g) To elect any or all of the members of the board of directors of any nonprofit corporation of which the authority is a member;
(h) To create, establish, acquire, operate or support subsidiaries and affiliates, either for-profit or nonprofit, to assist the authority in fulfilling its purposes;
(i) To create, establish or support nonaffiliated for profit or nonprofit corporations or other lawful business organizations that operate and have as their purposes the furtherance of the authority's purposes;
(j) Without limiting the generality of any provisions of this section, to accomplish and facilitate the creation, establishment, acquisition, operation or support of any such subsidiary, affiliate, nonaffiliated corporation or other lawful business organization, by means of loans of funds, acquisition or transfer of assets, leases of real or personal property, gifts and grants of funds or guarantees of indebtedness of such subsidiaries, affiliates and nonaffiliated corporations;
(k) To operate and provide health care and all other services, and to perform all other activities that the regional health care authority is authorized to perform;
(l) To exercise all powers granted under this section in such a manner as the authority, through its board of trustees, may determine to be consistent with the purposes of this act, including the state action immunity provided by this act from state and federal antitrust laws to the fullest extent possible, notwithstanding that as a consequence of such exercise of such powers it engages in activities that may be deemed "anticompetitive" or which displace competition within the meaning or contemplation of the antitrust laws of this state or of the United States; and
(m) To have and exercise all powers necessary or convenient to effect any or all the purposes for which an authority is organized.
SECTION 7. Liability and insurance. The board of trustees of the authority is authorized, in its discretion, to obtain and pay for, out of operating funds of the authority, liability insurance as described in Section 41-13-11.
SECTION 8. Immunity of authority from liability and suit. The authority shall be deemed a "governmental entity" and "political subdivision" as defined in Section 11-46-1, and as such, shall be entitled to all of the rights, privileges, benefits and immunities set forth in Sections 11-46-1 through 11-46-23, and shall be subject to all terms and provisions of those sections.
SECTION 9. Issuance of bonds. The owner is authorized and empowered to make appropriations of funds and to issue and sell bonds, notes or other evidences of indebtedness thereof, for the benefit of the authority, in the same manner as, and subject to all duties, obligations and provisions set forth in Sections 41-13-19, 41-13-21, 41-13-23, 41-13-24, and 41-13-25.
SECTION 10. Trust to insure against public liability claims. The authority is authorized to establish, maintain, administer and operate any trust as described in Section 41-13-101 and, in such event, shall be subject to the terms, provisions and requirements of Sections 41-13-101 through 41-13-107.
SECTION 11. Statewide personnel system. The authority established under this act and its employees, in the discretion of the authority's board of trustees, may be part of the Statewide Personnel System and subject to all provisions set forth in Sections 25-9-101 through 25-9-177.
SECTION 12. Retirement and disability benefits. The authority established by this act is authorized to participate in any and all public employees' retirement and disability benefits, plans and programs as set forth in Sections 25-11-1 through 25-11-145.
SECTION 13. Medicaid. The authority established under this act shall be treated as a nonstate governmental hospital, and shall have all rights, privileges and entitlements of a nonstate governmental hospital for purposes of the Mississippi Medicaid program, its implementing statutes and regulations.
SECTION 14. Implied powers. In addition to all of the other powers conferred upon it in this act, the regional health care authority may do all things necessary and convenient to carry out the powers expressly given in this act.
SECTION 15. Severability. If any section or provision of this act or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of the act that can be given effect without the invalid provision or application, and to this end the sections and provisions of this act are severable.
SECTION 16. It is the further intent of the Legislature to consider legislation authorizing the establishment of a similar health care authority by the state's academic medical center operated by a public university under Chapter 115, Title 37, Mississippi Code of 1972.
SECTION 17. This act shall take effect and be in force from and after July 1, 2022.