H*3915 Session 111 (1995-1996)
H*3915(Rat #0477, Act #0390 of 1996) General Bill, By
House Education and Public Works
Similar(S 365, H 3607)
A Bill to amend Chapter 7, Title 44, Code of Laws of South Carolina, 1976,
relating to hospitals, by adding Article 25 so as to authorize the Board of
Trustees of the Medical University of South Carolina (MUSC) to enter into
lease, sale, and other agreements to transfer the management and operations of
the Medical University Hospital including its land, facilities, and assets to
one or more private operators under certain terms and conditions, to describe
the land, facilities, and assets which are the subject of these agreements,
and to provide that University Medical Associates (UMA) is a public body for
purposes of the Freedom of Information Act.-amended short title
04/04/95 House Introduced, read first time, placed on calendar
without reference HJ-5
04/06/95 House Debate interrupted HJ-51
04/06/95 House Debate adjourned until Tuesday, April 11, 1995 HJ-66
04/11/95 House Debate adjourned until Tuesday, April 18, 1995 HJ-18
04/18/95 House Objection by Rep. McTeer, Canty, Scott, Neal,
Moody-Lawrence, Rogers, Askins, Keyserling,
Lloyd & Cave HJ-27
04/26/95 House Objection withdrawn by Rep. Moody-Lawrence,
Scott, Cave, Askins & Lloyd HJ-112
04/26/95 House Objection withdrawn by Rep. Neal HJ-115
04/26/95 House Objection withdrawn by Rep. Keyserling HJ-117
04/26/95 House Read second time HJ-159
04/27/95 House Read third time and sent to Senate HJ-12
05/01/95 Senate Introduced and read first time SJ-25
05/01/95 Senate Referred to Committee on Education SJ-25
04/10/96 Senate Recalled from Committee on Education SJ-88
04/10/96 Senate Retaining place on calendar committed to
Committee on Medical Affairs SJ-88
05/02/96 Senate Committee report: Favorable with amendment
Medical Affairs SJ-13
05/02/96 Senate Read second time SJ-27
05/02/96 Senate Ordered to third reading with notice of
amendments SJ-27
05/02/96 Senate Debate interrupted SJ-27
05/07/96 Senate Amended SJ-14
05/07/96 Senate Read third time and returned to House with
amendments SJ-41
05/14/96 House Debate adjourned on Senate amendments until
Wednesday, May 15, 1996 HJ-178
05/15/96 House Debate adjourned on Senate amendments until
Thursday, May 16, 1996 HJ-43
05/16/96 House Debate adjourned on Senate amendments until
Tuesday, May 21, 1996 HJ-43
05/21/96 House Debate interrupted HJ-156
05/22/96 House Debate interrupted HJ-107
05/23/96 House Senate amendment amended HJ-35
05/23/96 House Returned to Senate with amendments HJ-48
05/23/96 Senate Non-concurrence in House amendment SJ-21
05/23/96 House House insists upon amendment and conference
committee appointed Reps. Felder, Fulmer &
Seithel HJ-91
05/23/96 Senate Conference committee appointed Sens. V. Smith,
Moore, Ford SJ-23
05/23/96 House Conference report received and adopted HJ-142
05/23/96 Senate Conference report received and adopted SJ-24
05/23/96 Senate Ordered enrolled for ratification SJ-31
05/30/96 Ratified R 477
06/05/96 Signed By Governor
06/05/96 Effective date 06/05/96
06/14/96 Copies available
06/14/96 Act No. 390
(A390, R477, H3915)
AN ACT TO AMEND CHAPTER 7, TITLE 44, CODE OF LAWS
OF SOUTH CAROLINA, 1976, RELATING TO HOSPITALS, BY
ADDING ARTICLE 25 SO AS TO AUTHORIZE THE BOARD OF
TRUSTEES OF THE MEDICAL UNIVERSITY OF SOUTH
CAROLINA (MUSC) TO ENTER INTO LEASE, SALE, AND OTHER
AGREEMENTS TO TRANSFER THE MANAGEMENT AND
OPERATIONS OF THE MEDICAL UNIVERSITY HOSPITAL
INCLUDING ITS LAND, FACILITIES, AND ASSETS TO ONE OR
MORE PRIVATE OPERATORS UNDER CERTAIN TERMS AND
CONDITIONS, TO DESCRIBE THE LAND, FACILITIES, AND
ASSETS WHICH ARE THE SUBJECT OF THESE AGREEMENTS,
AND TO PROVIDE THAT UNIVERSITY MEDICAL ASSOCIATES
(UMA) IS A PUBLIC BODY FOR PURPOSES OF THE FREEDOM
OF INFORMATION ACT; TO REQUIRE THE PRIVATE OPERATOR,
THE COLUMBIA/HCA HEALTHCARE CORPORATION (HCA),
UPON APPROVAL OF THE SALE OR LEASE OF MUSC'S
FACILITIES AND ASSETS, TO CREATE AN EMPLOYEE
GRIEVANCE COMMITTEE FOR REVIEW OF ALL EMPLOYEE
DISCIPLINARY ACTIONS AND TERMINATIONS BY HCA, AND
TO PROVIDE THAT THE FINAL DECISION IN ANY GRIEVANCE
INVOLVING A FORMER MUSC EMPLOYEE RESTS WITH THE
BOARD OF DIRECTORS OF MUSC AND THAT THE FINAL
DECISION IN GRIEVANCES INVOLVING HCA EMPLOYEES
RESTS WITH THE OFFICIAL DESIGNATED BY HCA; TO
REQUIRE THE BUDGET AND CONTROL BOARD TO CONSULT
WITH THE SOUTH CAROLINA COMMISSION ON HIGHER
EDUCATION BEFORE AUTHORIZING THESE TRANSACTIONS;
TO PROHIBIT A CURRENT EMPLOYEE OF MUSC OR UMA FROM
PERSONALLY PROFITING FROM ANY TRANSACTION
AUTHORIZED HEREBY IF THAT PERSON PLAYED A
SUBSTANTIAL ROLE IN THE NEGOTIATION PROCESS AND TO
DEFINE THE TERM "SUBSTANTIAL ROLE" FOR THIS
PURPOSE, TO PROVIDE THAT NO CONDITION OF ANY LEASE
OR AGREEMENT SHALL RESTRICT MUSC EMPLOYEES TO
SHARED PARTICIPATION WITH ONE COMPANY'S HEALTH
CARE THIRD PARTY PROVIDERS, TO PROVIDE THAT AT THE
TIME OF DEFAULT BY HCA OR AT THE END OF THE LEASE,
MUSC SHALL NOT BE REQUIRED TO PURCHASE THE MEDICAL
CENTER AS A GOING CONCERN BUT RATHER AT THE
APPRAISED VALUE OF THE TANGIBLE ASSETS OWNED BY
THE LESSEE AS PERSONAL PROPERTY INVENTORY; TO
REQUIRE THE CONSENT OF THE MUSC BOARD OF TRUSTEES
FOR ANY DISCONTINUATION OR TRANSFER OF ANY
INPATIENT CLINICAL SERVICE OFFERED AT THE MEDICAL
CENTER; TO PROVIDE THAT UMA AGREEMENTS WITH ITS
SERVANTS, AGENTS, SUBSIDIARIES, AND PARTNERS ARE
SUBJECT TO REVIEW AND APPROVAL BY THE MUSC BOARD
OF TRUSTEES AND MAY NOT CONFLICT WITH THE TERMS
AND CONDITIONS OF THE TRANSACTIONS AUTHORIZED
HEREBY; TO REQUIRE MEMBERS OF THE GENERAL ASSEMBLY
TO PAY CO-PAYMENTS OR DEDUCTIBLES FOR SERVICES
RECEIVED AT A HOSPITAL FACILITY IN THIS STATE
WHETHER OR NOT THE SERVICES ARE PROVIDED BY THE
MUSC HOSPITAL; TO REQUIRE MUSC, UPON APPROVAL OF
THESE TRANSACTIONS, TO MAINTAIN THE CURRENT LEVEL
OF SERVICES OFFERED TO INDIGENT PATIENTS AT
CHARLESTON MEMORIAL HOSPITAL UNLESS THE MUSC
BOARD APPROVES OTHERWISE; AND TO REQUIRE ANY
FINANCIAL OBLIGATIONS UNDER AGREEMENTS ENTERED
INTO BY A SUBSIDIARY CORPORATION TO BE
UNCONDITIONALLY GUARANTEED BY THE PARENT
CORPORATION OF THE PURCHASER OR TENANT.
Be it enacted by the General Assembly of the State of South
Carolina:
Lease or sale of MUSC facilities and assets; UMA a public body for
FOI purposes
SECTION 1. Chapter 7, Title 44 of the 1976 Code is amended by
adding:
"Article 25
Medical University of South Carolina
Lease and Sale of Certain Assets
Section 44-7-3110. The General Assembly authorizes and grants to
the Board of Trustees of the Medical University of South Carolina
authority to enter into reasonable agreements to transfer the management
and operations of the Medical University Hospital to one or more private
operators, including authority to:
(A) Lease certain Medical University Hospital land, together with all
easements, rights, privileges, and appurtenances appertaining thereto, and
all of the buildings, structures, fixtures, and other improvements existing
and situated on that land, all as described in Section 44-7-3120; and
(B) Sell furniture, fixtures, equipment, accounts receivable, and other
incidental assets associated with or employed in the operation of the
Medical University Hospital on the land.
Provided, however, that the following terms and conditions must be
observed and included and accepted in the agreements:
(1) The term of the lease and any extensions may not exceed a total
aggregate period of thirty years.
(2) The leased premises may be used only for the operation of
hospitals and clinics, and for other uses reasonably related to hospitals,
clinics, and health care, provided that those operations and uses are
consistent with all Joint Commission on Accreditation and Healthcare
Organizations standards.
(3) Any private operator or operators chosen by the Medical
University of South Carolina's Board of Trustees to operate the Medical
University Hospital shall not transfer, sell, lease, or assign control of the
Medical University Hospital, or of the entity operating or controlling the
Medical University Hospital or of any of its related real estate or other
assets, to any other private operator without the prior express written
approval of the Medical University of South Carolina Board of Trustees
and without compliance with the same terms and conditions provided in
this article. Prior to any such transfer, sale, lease, or assignment of
control, the Medical University of South Carolina shall have the right of
first refusal and be given sufficient time to consider and decide whether
to exercise the right of first refusal.
(4) Any private operator or operators chosen by the Medical
University of South Carolina's Board of Trustees to operate the Medical
University Hospital must provide indigent care in the same manner as is
being provided by the Medical University of South Carolina through the
operation of this Medical University Hospital and its clinical
programs.
(5) The Medical University of South Carolina and the State of South
Carolina must be protected from any tort liability arising from the private
operation of the Medical University Hospital by the private operator,
unless and except to the extent the tort liability is caused by or attributed
to the Medical University of South Carolina or the State of South
Carolina, or both. The agreement will require the operator of the
Medical University Hospital to acquire and keep in effect sufficient
insurance policies to provide a reasonable amount and type of coverage
and naming the Medical University of South Carolina as an additional
insured.
(6) The name and logo of the Medical University of South Carolina
and its affiliates shall not be used by any private operator to market and
promote health care services.
(7) The proceeds from this lease and from the sale of these assets
must be used for the retirement of outstanding indebtedness incurred to
finance Medical University Hospital facilities, and all other revenues and
payments received from or in connection with this lease or sale must be
dedicated solely for use of the Medical University of South Carolina's
business and operations as the Board of Trustees of the Medical
University of South Carolina may direct, subject to review by the
appropriate bodies of state governments.
(8) All agreements, the manner in which all agreements are made
and the implementation of all agreements must comply with all
applicable laws.
(9) Access for any person or group to use the services of the
Medical University Hospital and clinical services shall not be limited,
restricted, denied, or allowed in a discriminatory manner that is
prohibited by law; nor shall such access be denied based on lack of
participation or membership in a particular health plan or network.
(10) The Medical University of South Carolina shall have access at
all times to all records of all patients treated at the Medical University
Hospital, and all patients shall have access at all times to their own
records.
Provided, further, that the lease and sale may not be finalized until the
Budget and Control Board is satisfied that the consideration paid by the
private operator or operators for the agreements authorized by this article
reflects a fair and reasonable value to the State of South Carolina, based
upon either the net book value of the hospital, capitalization of income
from operation of the hospital over a period of years, the net present
value of future cash flow of the hospital, a direct comparison to a
comparable transaction, or some other financially sound and general
practiced method of business evaluation.
The Budget and Control Board is directed to cause the lease and
purchase agreements regarding the Medical University Hospital to contain
provisions requiring and ensuring compliance with the terms and
conditions stated above. To assist the board in performing this function,
the Medical University of South Carolina is required to provide, at its
expense, any information, studies, evaluations, agreements, reports, or
other data requested by the Budget and Control Board, including any
such items with regard to University Medical Associates or any of its
employees, officers, and affiliates. The approval requirement for the
transaction authorized in this act shall be governed by the provisions of
Section 1-11-65 of the 1976 Code, and compliance with the provisions of
this act is exclusive and shall satisfy the approval requirements of any
and all other statutory provisions requiring the review and/or approval of
any agency, department, or division.
No lease or other agreement pursuant to this article shall be valid
unless and until the provisions of this article have been complied with
fully and the Budget and Control Board has certified that the provisions
of this article have been complied with fully.
Section 44-7-3120. The legal description of the land and
improvements thereon referenced in Section 44-7-3110(A) is as
follows:
All that certain property and parcels of land in Charleston County
together with improvements thereon lying on the north side of Albert B.
Sabin Street, between Ashley Avenue and Jonathan Lucas Street
consisting of the MUSC Teaching Hospital and the MUSC Children's
Hospital but saving and excepting the Clinical Sciences Building and the
Storm Eye Institute;
Together with a rectangular parcel located on the south side of Albert
B. Sabin Street containing certain fuel oil tanks;
Together with the Psychiatric Institute located on the west side of
President Street and the playground area located to the rear of such
institute but saving and excepting the auditorium, the lobby area, and the
University Services Building.
The above referenced properties are as shown on a survey prepared by
Forsburg Engineering & Surveying, Inc., to be recorded and
reference is made thereto for a description of the metes and bounds
thereof.
Section 44-7-3130. Notwithstanding any other provision of law to the
contrary, University Medical Associates (UMA) is a public body as
defined by Chapter 4, Title 30 (the Freedom of Information Act) for
purposes of the act and the provisions of the act apply to records
maintained by UMA."
Employee grievances
SECTION 2. Upon approval of the proposed sale or lease of MUSC's
facilities and assets to HCA, HCA shall take the steps necessary to create
an employee grievance committee for the review of all employee
disciplinary actions and terminations by HCA. The grievance procedure
must provide that the final decision in any grievance involving a former
MUSC employee rests with the board of directors of MUSC and that the
final decision in grievances involving HCA employees rests with the
official designated by HCA.
Consultation required
SECTION 3. Notwithstanding any other provision of law, the Budget
and Control Board must consult the South Carolina Commission on
Higher Education prior to granting authorization to effectuate the
transaction provided for in this act.
Personally profiting prohibited
SECTION 4. Notwithstanding any other provision of law to the contrary,
upon approval of the proposed lease and sale of Medical University of
South Carolina facilities and assets, no one who is currently an employee
of MUSC or UMA may personally profit from the transaction by
accepting compensation or other financial incentives from the purchasing
and/or leasing company if that individual played a substantial role in the
negotiation process. As used in this section "substantial role"
means a role where one is providing direct advice to the members of a
negotiating team or being a member of a negotiating team.
Shared participation permitted
SECTION 5. No condition of any lease or agreement shall restrict
MUSC employees to shared participation with one company's health care
third party providers.
Valuation of purchase upon default or expiration of lease
SECTION 6. At the time of default by Columbia HCA or end of the
lease, MUSC shall not be required to purchase the Medical Center as a
going concern but rather at the appraised value of the tangible assets
owned by the lessee as personal property inventory.
Written consent required for discontinuation or transfer of inpatient
clinical service
SECTION 7. Any discontinuation or transfer of any inpatient clinical
service offered at the Medical Center shall be with the prior written
consent of the MUSC Board of Trustees.
UMA agreements subject to review and approval; agreements must
not conflict
SECTION 8. All agreements between University Medical Associates and
any of its servants, agents, and subsidiaries and partners are subject to
review and approval by the Board of Trustees of the Medical University
of South Carolina and the terms of any such agreements shall not conflict
with the terms and conditions of the lease authorized by this section.
Co-payment required for members of the General Assembly
SECTION 9. Notwithstanding any other provision of law to the contrary,
including any provision of the Annual General Appropriations Act for
FY 1996-97, members of the General Assembly must pay any
co-payment or deductible as may be applicable for receiving services at a
hospital facility in this State whether or not their services are provided by
the MUSC hospital or its successor in interest.
Indigent patient services
SECTION 10. Notwithstanding any other provision of law to the
contrary, upon approval of the proposed sale or lease of MUSC's
facilities and assets, MUSC must maintain the current level of services
currently offered to indigent patients at Charleston Memorial Hospital
unless the MUSC Board of Trustees approves otherwise.
Guarantee of financial obligations
SECTION 11. Notwithstanding any other provision of law to the
contrary, any financial obligation under the agreements entered into by a
subsidiary corporation must be unconditionally guaranteed by the ultimate
parent corporation of the purchaser/tenant.
Time effective
SECTION 12. This act takes effect upon approval by the Governor.
Approved the 5th day of June, 1996. |