H 7272Medical Services

Health and Safety - The Hospital Conversions Act

This bill requires hospitals to obtain state approval and prove financial necessity before closing or reducing birthing center services.

Held for study

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Affected

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Introduced Jan 23, 2026Committee House Health & Human Services

Plain-English Summary

This legislation establishes strict regulations for the closure or significant reduction of birthing centers in Rhode Island. It requires healthcare facilities to provide 180 days' notice to the Department of Health and the public before cutting services. Facilities must submit a detailed "closure application" containing a financial justification, an assessment of the impact on the community, and a transition plan for patients. The Department of Health will hold public hearings and hire an independent expert, paid for by the facility, to review the case. The Department can deny the closure if the facility fails to prove it is necessary.

For younger readers

This bill is designed to keep places where babies are born safe and open. Sometimes, the people who run hospitals want to close these areas to save money. This law says they cannot just close them suddenly. They must tell the government six months ahead of time. They also have to prove they really cannot afford to stay open and show a plan to take care of the doctors, nurses, and moms. This helps make sure families have a place nearby to have their babies safely.

Who & Where It Applies

Impacted groups

Pregnant womenHospitals and healthcare systemsBirthing centersMidwives and DoulasMedicaid members

Impacted communities

All

Constitutional & Fiscal Check

Moderate risk

There is a moderate constitutional risk regarding the "Takings Clause" or Due Process. By granting the state authority to deny a business the right to close a money-losing division based on a high evidentiary standard ("clear and convincing evidence"), the bill could be argued to constitute a regulatory taking or a violation of the business owners' property rights, effectively forcing a private entity to operate at a loss for the public benefit.

Estimated cost

Amount unknown

Estimated revenue

Amount unknown

Bill Analysis

Both viewpoints

For Progressives

Protects vulnerable communities and Medicaid members by ensuring that essential maternal healthcare services remain accessible in underserved areas, reducing health disparities.
Increases corporate accountability by forcing healthcare systems to open their financial books and prove that a closure is truly unavoidable rather than just a profit-driven decision.
Empowers the community through mandated public hearings and transparency requirements, giving patients and staff a voice in decisions that affect their local healthcare infrastructure.
May inadvertently threaten the financial stability of safety-net hospitals by forcing them to maintain money-losing units, potentially jeopardizing other essential services provided by the facility.
Does not provide state funding to subsidize the birthing centers it mandates to stay open, creating an unfunded mandate that could lead to under-resourced "zombie" units with lower quality of care.
The high cost of compliance and the risk of being unable to close a unit may discourage new birthing centers from opening in the state initially.

For Conservatives

Supports traditional family structures by ensuring that resources for childbirth and maternal care remain available and accessible within local communities.
Demands financial transparency from large healthcare conglomerates, ensuring that entities benefiting from tax-exempt status are actually serving the public interest.
Protects rural and suburban communities from being abandoned by healthcare systems that might otherwise consolidate all services into urban centers.
Represents a significant government intrusion into private business operations by stripping owners of the right to manage their own assets and close unprofitable service lines.
Imposes heavy regulatory burdens and financial costs on healthcare providers, which will likely drive up the overall cost of healthcare and insurance for everyone.
Violates free-market principles by artificially keeping businesses open through bureaucratic force rather than supply and demand, potentially leading to inefficiencies.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 114 additions

SECTION 1. Legislative findings. The general assembly finds and declares that:

(1) Birthing centers, including freestanding centers and hospital-operated birthing units, play a critical role in ensuring safe, timely, and equitable access to maternal, perinatal, and newborn care across Rhode Island.

(2) The closure or reduction of birthing centers has significant consequences for maternal morbidity and mortality, newborn outcomes, emergency transport times, and regional healthcare capacity.

(3) Rhode Island law does not require sufficient advance notice, public transparency, or rigorous financial review before a birthing center is closed or its operations are significantly reduced.

(4) Given ongoing consolidation within regional healthcare systems, it is essential that the state receive complete and accurate financial information, including system-level data, to determine whether a birthing center's closure is truly unavoidable.

(5) It is in the public interest to establish a strong review process requiring advance notice, robust financial disclosure, community engagement, and independent analysis to protect Rhode Island families, particularly in underserved and high-risk communities.

SECTION 2. Chapter 23-17.14 of the General Laws entitled "The Hospital Conversions Act" is hereby amended by adding thereto the following section: 23-17.14-18.1. The Rhode Island birthing center access, transparency, and financial accountability act of 2026.

(a) For purposes of this section:

(1) "Applicant" means the birthing center submitting an application pursuant to subsection

(d) of this section.

(2) "Birthing center" means any freestanding birthing center licensed under chapter 17 of title 23, and any birthing unit, maternity unit, perinatal unit, or labor-and-delivery service operated by a hospital or healthcare facility.

(3) "Closure" means the permanent cessation of all birthing services at a birthing center.

(4) "Closure application" means the application required by subsection (d) of this section.

(5) "Discontinuation of services" means the cessation of any prenatal, perinatal, postpartum, or birthing-related service or program offered by a birthing center without complete closure of the facility.

(6) "Significant reduction" or "significantly reduced" means:

(i) A reduction of twenty-five percent (25%) or more in capacity or annual volume;

(ii) A reduction in operating hours by twenty-five percent (25%) or more;

(iii) Elimination of labor, delivery, or postpartum services; or

(iv) Any relocation of birthing-related services outside the municipality in which the service is currently located.

(b) No birthing center shall be closed, terminated, relocated, or significantly reduced without the prior written approval of the director of the department of health.

(c) A facility proposing closure or significant reduction of a birthing center shall file a closure application with the director of the department of health no fewer than one hundred eighty

(180) days prior to the proposed effective closure date. Notice shall also be provided to:

(1) The city or town council within the municipality in which the birthing center is located;

(2) The birthing center's patients and personnel;

(3) The patient advocacy groups within the state that support maternal and child health;

(4) All local EMS agencies;

(5) Local and state media outlets by written publication; and

(6) The speaker of the house and the president of the senate.

(d) Prior to the discontinuation or significant reduction of services at a birthing center, its controlling officers shall provide a closure application to the director of the department of health, the contents of which shall be a considered public record and posted on the department of health's website. The closure application shall include:

(1) An access impact assessment that details:

(i) The number of beds within the impacted birthing unit;

(ii) The number of existing patients within the impacted birthing unit;

(iii) The number of employees and staff within the impacted birthing unit;

(iv) Affected healthcare services for traditionally underserved populations;

(v) Affected healthcare services for the affected community; and

(vi) Other licensed birthing centers in the affected community and the distance of those facilities to the applicant's birthing center.

(2) A detailed evaluation of:

(i) Annual deliveries, prenatal visits, postpartum care, and newborn services;

(ii) Impact on high-risk pregnancies, low-income families, and Medicaid members;

(iii) EMS transport impacts; and

(iv) Projected changes in maternal morbidity and newborn outcomes.

(3) A patient transition plan, including:

(i) Protocols for laboring patient transfers;

(ii) EMS and hospital coordination;

(iii) Continuity plans for prenatal patients beyond twenty (20) weeks gestation;

(iv) Transfer agreements with receiving hospitals or birthing centers; and

(v) Protocols for the storage of and access to medical records.

(4) Workforce plan, including detailed descriptions of:

(i) Staffing levels;

(ii) Proposed layoff or reassignment plans; and

(iii) Transition plans for licensed midwives, doulas, nurses, and obstetric clinicians.

(5) Financial justification, certified by a certified public accountant, including:

(i) Five (5) years of audited financial statements for the birthing center and operating hospital, if applicable, parent health system, and all controlled affiliates, subsidiaries, and management entities;

(ii) Detailed service-level financials, including, revenues, expenses, and margins, volume trends, overhead allocation methodology, and documentation of any staffing cuts, resource reductions, or underinvestment contributing to financial decline;

(iii) Five (5) year forward projection, including, break-even analyses, capital investment needs, labor costs, and sensitivity analyses for multiple scenarios; and

(iv) Parent system financial capacity review, including, reserves and unrestricted funds, cash on hand, investments and endowment holdings, executive compensation, and intercompany transfers or management fees.

(6) Comparative analysis of at least three (3) alternatives to closure including, but not limited to, shared staffing models, partnerships with community providers or regional systems, cross-subsidization by the parent system, and/or redesign or modernization; and

(7) The applicant's controlling officers shall certify that neither the birthing center nor parent system engaged in actions that materially contributed to financial instability including, but not limited to, understaffing, reduction of capital investment, curtailment of marketing or referral pathways, diversion of patients, and/or failure to pursue available external funding.

(e) The director of the department of health shall deny a closure application that fails to satisfy the requirements of this section.

(f) An independent expert, selected by the department of health and paid for by the applicant, shall evaluate sustainability, feasible restructuring alternatives, and pathways to avoid closure or significant reduction of services. (g)(1) Within sixty (60) days of receiving the notice required by subsection (c) of this section, the director of the department of health shall hold a public hearing. The applicant's controlling officers shall attend the public hearing and members of the public shall be permitted to participate and offer testimony; the director of the department of health shall provide twenty-one

(21) days written notice on the department of health's website of the date, time, and location of the public hearing.

(2) Within thirty (30) days of receiving a closure application that satisfies the requirements of subsection (d) of this section, the director of the department of health shall hold a public hearing. The applicant's controlling officers shall attend the public hearing and members of the public shall be permitted to participate and offer testimony; the director of the department of health shall provide twenty-one (21) days written notice on the department of health's website of the date, time, and location of the public hearing.

(h) The director of the department of health shall not approve an application submitted pursuant to subsection (d) of this section unless the applicant demonstrates, by clear and convincing evidence, that:

(1) The birthing center cannot reasonably be sustained through restructuring, alternative staffing models, or system-level financial support;

(2) No feasible alternatives exist that would maintain safe and accessible birthing services;

(3) Closure shall not exacerbate maternal, newborn, racial, economic, or geographic disparities; and

(4) Adequate, timely, and safe birthing access shall remain for the affected population.

(i) Notwithstanding any other provision in the general laws, the director of the department of health shall have the sole authority to review all applications submitted under this section and shall issue a written decision within ninety (90) days of the public hearing that follows the applicant's submission of the completed closure application. The decision of the director of the department of health shall approve, deny, or approve with conditions, the closure application.

(j) The department of health shall not amend a facility license issued pursuant to chapter 17 of title 23 to remove a birthing center unless the requirements of this section have been fulfilled.

(k) Failure to comply with the requirements of this section shall subject the entity required to comply with the provisions of this section to civil penalties not to exceed twenty-five thousand dollars ($25,000) per violation. Each day of noncompliance shall constitute a separate violation.

(l) The department of health shall adopt rules and regulations to implement and enforce the provisions of this section.

SECTION 3. This act shall take effect upon passage.