SECTION 51G. Acute-care hospitals; original licensure process; determination of suitability and responsibility; factors

(1) No original license shall be granted to establish or maintain an acute-care hospital, as defined by section 25B unless there is a determination by the department of the suitability and responsibility of the prospective licensee in accordance with regulations of the department.

For purposes of this section, the department's determination of suitability and responsibility shall include the following factors:

(a) the financial capacity of the prospective licensee to operate the hospital in accordance with applicable laws;

(b) the history of the prospective licensee in providing acute care, including in states other than the commonwealth, if any, measured by compliance with the applicable statutes and regulations governing the operation of hospitals in such states;

(c) the participation of persons residing in the non-profit entity's primary service area in oversight of the resulting hospital; and

(d) whether the transaction will create a significant effect on the availability or accessibility of health care services to the affected communities.

(2) No original license shall be granted to establish or maintain an acute care hospital as defined in section 25B unless all financial transactions, including remuneration of all officers of hospitals affected by the transaction, are disclosed as part of the licensure process, and unless a public hearing is held, according to procedures established in regulation by the department, prior to the granting of the license.

(3) No original license shall be granted to establish or maintain an acute-care hospital, as defined by section 25B and any subsequent successor or acquirer, unless the applicant agrees to maintain or increase the percentage of gross patient service revenues allocated to free care. The department may permit the applicant to reduce said percentage if the department determines that demographic or other changes in the hospital's service area justify a reduction in said percentage. The department shall promulgate regulations to enforce this paragraph and any agreement made by an applicant concerning free care.

(4) Any hospital shall inform the department 90 days prior to the closing of the hospital or the discontinuance of any essential health service provided therein. The department shall by regulation define ''essential health service'' for the purposes of this section. The department shall, in the event that a hospital proposes to discontinue an essential health service or services, conduct a public hearing on the closure of said essential services or of the hospital. The department shall determine whether any such discontinued services are necessary for preserving access and health status in the hospital's service area and shall require hospitals to submit a plan for assuring access to such necessary services following the hospital's closure of the service, and assure continuing access to such services in the event that the department determines that their closure will significantly reduce access to necessary services. The department shall conduct a public hearing prior to a determination on the closure of said essential services or of the hospital. No original license shall be granted to establish or maintain an acute-care hospital, as defined by section 25B, unless the applicant submits a plan, to be approved by the department, for the provision of community benefits, including the identification and provision of essential health services. In approving the plan, the department may take into account the applicant's existing commitment to primary and preventive health care services and community contributions as well as the primary and preventive health care services and community contributions of the predecessor hospital. The department may waive this requirement, in whole or in part, at the request of the applicant which has provided or at the time the application is filed, is providing, substantial primary and preventive health care services and community contributions in its service area.

(5) No original license shall be granted to establish or maintain an acute care hospital as defined by section 25B which results from the merger or acquisition of the hospital, unless the board of trustees of the hospital publicly presents and evaluates all proposals for such a merger or acquisition according to rules and regulations promulgated by the department.

(6) Whenever the department finds upon inspection, or through information in its possession, that a licensee is not in compliance with a requirement established under this section, the department may order the licensee to correct such deficiency. Every such correction order shall include a statement of the deficiencies found, the period prescribed within which the deficiency must be corrected, and the provisions of law relied upon. The department may assess the licensee ordered to correct deficiencies no less than $1,000 and not more than $10,000 per deficiency for each day the deficiency continues to exist beyond the date prescribed for correction. Within seven days of receipt, the affected licensee may file a written request with the department for administrative reconsideration of the order or any portion thereof.