OLR Report 2014-R-0185 answers the question: What is the law regarding the process for a nonprofit hospital to convert to forprofit?
The report updates OLR Report 2012-R-0031.
By law, a nonprofit hospital needs approval of the attorney general and public health (DPH) commissioner to sell or otherwise transfer a material amount of its assets or operations or to change the control of its operations to a for-profit entity (CGS §§ 19a-486 to 486h). Any agreement without such approval is void.
Before the transaction, the hospital and purchaser must concurrently submit a certificate of need (CON) determination letter to DPH and the attorney general. The attorney general must determine if the agreement involves a material amount of the nonprofit hospital’s assets or operations or a change in control of its operations. If he determines that it does, the DPH commissioner and attorney general then give the hospital and purchaser a more detailed application to complete.
The commissioner and attorney general must each review the proposed agreement. They can approve the agreement, approve it with modifications, or disapprove it. The law sets the criteria and time periods for review. The attorney general and commissioner may subpoena individuals, issue written interrogatories, and contract with experts or consultants when conducting their reviews. In addition, DPH must determine whether to approve the request for CON authorization that is part of the application.
For more information, read the full report.
