AN ACT RELATING TO HEALTH AND SAFETY -- THE HOSPITAL CONVERSIONS ACT -- HEALTHCARE INVESTMENT BOND REQUIREMENT (Mandates private equity companies or real estate investment trusts (REIT) seeking to invest in healthcare providers or provider-sponsored organizations in this state, submit a notice of material change with the AG and deposit a bond with the DOH.)

S2950

2026 -- S 2950
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LC005377
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO HEALTH AND SAFETY -- THE HOSPITAL CONVERSIONS ACT --
HEALTHCARE INVESTMENT BOND REQUIREMENT

Introduced By:
Senators Urso, Famiglietti, Vargas, Dimitri, Ujifusa, de la Cruz,
LaMountain, and Acosta

Date Introduced:
March 04, 2026

Referred To:
Senate Judiciary
It is enacted by the General Assembly as follows:
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SECTION 1. Chapter 23-17.14 of the General Laws entitled "The Hospital Conversions
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Act" is hereby amended by adding thereto the following section:
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23-17.14-37. Bond requirement for private equity company or REIT investment.
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(a) Any private equity company or real estate investment trust (REIT) engaging in a
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transaction that will lead to the private equity company or the REIT obtaining direct or indirect
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ownership or control of a provider, as defined in federal law, 42 CFR § 400.202 or provider-
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sponsored organization (PSO), pursuant to federal law 42 U.S.C. § 1395w-25(d) shall:
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(1) Submit a notice of material change to the department of attorney general pursuant to
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rules promulgated pursuant to § 6-36-22 to include, but not limited to, 110-RICR 30-00-5; and
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(2) Deposit, a bond with the department of health ("department").
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(b) The private equity company or REIT shall not use the provider or PSO or the provider's
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or PSO’s assets or property as security for the bond, pay for the bond by placing debt on the provider
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or PSO, permit the provider or PSO to pay the bond on the private equity company or REIT’s
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behalf, or allow the provider or PSO to otherwise be liable or indemnify the private equity company
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or REIT for the bond.
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(c) Until such bond has been deposited, the department shall not issue a license to such
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provider or PSO under this chapter, and any material change notice submitted pursuant to
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subsection (b) of this section shall be deemed incomplete. If the bond has not been deposited, but

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the department would otherwise be permitted to collect the bond, the department shall be permitted
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to collect from the private equity company or the REIT the amount the department would have
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been able to collect had the bond been deposited.
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(d) The department shall determine the amount of the bond, which shall equal one year of
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the provider's or PSO’s average or estimated operating expenses, plus the estimated cost of hiring
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an independent supervisor and reasonable staff to supervise and facilitate collecting and spending
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the bond. The private equity company or REIT shall maintain the bond for as long as the private
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equity company or REIT directly or indirectly owns or controls the provider or PSO, and for seven
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(7) years thereafter.
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(e) The department may collect the bond if the provider or PSO declares bankruptcy, is at
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imminent risk of closure, or closes a majority of the essential services the provider or PSO provides,
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as determined by the department. The department shall use the bond proceeds to support the
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continued provision of healthcare services to patients served by the provider or PSO. Prior to
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spending the bond, the department shall seek input from the public, including, but not limited to,
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providers, PSOs and patients, regarding how to spend the bond. The department may select an
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independent supervisor and reasonable staff to supervise and facilitate collecting and spending the
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bond. This section does not provide the department with the authority to petition for the
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appointment of a receiver for the provider or PSO.
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(f) The private equity company or the REIT is prohibited from interfering with or
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controlling the clinical decisions of health care practitioners.
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(g) The department shall promulgate regulations necessary to implement this section.
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SECTION 2. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO HEALTH AND SAFETY -- THE HOSPITAL CONVERSIONS ACT --
HEALTHCARE INVESTMENT BOND REQUIREMENT
***
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This act would mandate all private equity companies or real estate investment trusts (REIT)
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that are seeking to invest in healthcare providers or provider-sponsored organizations in this state,
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submit a notice of material change with attorney general and deposit a bond with the department
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of health (DOH). This act would also require that the bond be the equivalent of one year of the
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investor’s expenses and be maintained as long as the company owns or controls the provider or
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provider organization and for 7 years after leaving. DOH would be allowed to collect the bond if
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the provider or provider-sponsored organization declares bankruptcy, is at risk of closure, or closes
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a majority of essential services. The act would also prohibit the investor from interfering with or
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controlling the clinical decisions of health care practitioners.
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This act would take effect upon passage.
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