H 7930Healthcare: Licensing & Accreditation

Health and Safety - Licensing of Healthcare Facilities

This bill mandates full ownership disclosure for nursing homes and restricts the amount of profit owners can withdraw annually.

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Affected

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Introduced Feb 27, 2026Committee House Health & Human Services

Plain-English Summary

This legislation increases transparency and financial regulations for nursing homes in Rhode Island. It requires nursing facility operators to disclose detailed information about everyone who has a financial interest in the facility, including land and building owners, to the Department of Health. If operators hide ownership details or provide false information, they face penalties starting at $1 million. Additionally, starting July 1, 2026, nursing homes are prohibited from withdrawing profits or assets exceeding 3% of their annual patient care revenue without receiving prior written approval from the state.

For younger readers

This new law is for nursing homes, which are places where older people live to get care. The law says the people running the nursing home must tell the government exactly who owns the building and the business. If they lie or hide who the owners are, they have to pay a huge amount of money as a punishment. Also, the law says the owners cannot take too much money out of the nursing home's bank account for themselves. They have to ask the government for permission before taking out a large amount of money.

Who & Where It Applies

Impacted groups

Nursing facility operatorsNursing home residentsPrivate equity firmsHealthcare investorsDepartment of Health

Impacted communities

All

Constitutional & Fiscal Check

Moderate risk

There is a moderate risk regarding the "Takings Clause" or Due Process. Section 2 restricts a business owner from withdrawing their own equity or assets without government approval. While states have broad police powers over healthcare, freezing assets or preventing the transfer of private property could be challenged as an unconstitutional regulatory taking or an infringement on economic liberty, though courts often defer to states in highly regulated industries like nursing homes.

Estimated cost

None

Estimated revenue

Amount unknown

Bill Analysis

Both viewpoints

For Progressives

Combats the financial exploitation of the healthcare system by preventing private equity firms and owners from stripping excessive assets or equity, ensuring resources remain available for patient care.
Increases corporate accountability by mandating full disclosure of all beneficial owners and financial interests, making it harder for wealthy investors to hide behind shell companies while cutting services.
Establishes significant financial penalties for dishonesty or lack of transparency, creating a strong deterrent against predatory business practices that often harm vulnerable elderly residents and low-wage workers.
The restriction on asset withdrawal does not take effect until July 2026, potentially allowing bad actors a window of several years to extract equity before the regulations are enforced.
The three percent cap on asset transfers might still allow for significant profit extraction in facilities with high revenue, rather than requiring all surplus funds to be reinvested in care or staff wages.
Relies heavily on the discretion of the Department of Health director to approve or disapprove asset transfers, which could be weakened if a future administration appoints a director sympathetic to corporate interests.

For Conservatives

Increases transparency in the market, allowing consumers and the state to know exactly who is operating business entities within the healthcare sector, which aids in informed decision-making.
Strengthens the rule of law by imposing strict penalties on operators who knowingly file false or incorrect legal documents regarding ownership.
Helps ensure the financial solvency of critical infrastructure by monitoring significant asset transfers, potentially preventing bankruptcy situations that would require government intervention.
Infringes upon private property rights and free enterprise by dictating how business owners can manage their own equity and assets, requiring government permission to move private capital.
Imposes excessive and punitive fines of at least one million dollars, which could be viewed as a weaponization of government power against private business owners for administrative failures.
Creates significant bureaucratic hurdles and regulatory burdens for nursing facility operators, potentially discouraging investment in the state's healthcare industry due to the difficulty of retrieving capital.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 18 additions

It is enacted by the General Assembly as follows:

SECTION 1. Section 23-17-65 of the General Laws in Chapter 23-17 entitled "Licensing of Healthcare Facilities" is hereby amended to read as follows: 23-17-65. Transparency of ownership in healthcare facilities.

(a) Any operator or operators of a nursing facility shall file with the department of health information of ownership including, but not limited to, the following:

(1) The name, address, and a description of the interest held by each of the following persons:

(i) Any person who, directly or indirectly, beneficially owns any interest in the land on which the facility is located;

(ii) Any person who, directly or indirectly, beneficially owns any interest in the building in which the facility is located;

(iii) Any person who, directly or indirectly, beneficially owns any interest in any mortgage, note, deed of trust, or other obligation secured, in whole or in part, by the land on which or building in which the facility is located;

(iv) Any person who, directly or indirectly, has any interest as lessor or lessee in any lease or sub-lease of the land on which or the building in which the facility is located;

(v) Any person who is the ultimate and actual owner of the land, building, mortgages, and leases of the nursing facility and any lessee of the land or building; and

(vi) The operator or operators of the nursing facility.

(2) If any person named in subsection (a)(1) of this section is a partnership or limited liability company, then the name and address of each partner or member.

(3) If any person named in subsection (a)(1) of this section is a corporation, other than a corporation whose shares are traded on a national securities exchange or are regularly quoted in an over-the-counter market or which is a commercial bank, savings bank, or savings and loan association, then the name and address of each officer, director, stockholder and, if known, each principal stockholder and controlling person of such corporation.

(4) If any corporation named in subsection (a)(1) of this section is a corporation whose shares are traded on a national securities exchange or are regularly quoted in an over-the-counter market or which is a commercial bank, savings bank, or savings and loan association, then the name and address of the principal executive officers and each director and, if known, each principal stockholder of such corporation.

(b) In order to promote greater transparency, the department of health shall, upon request, furnish to the public all documents and information received pursuant to this section.

(c) As used in this section, the term “operator” means the licensee and also includes the complete ownership entity above the actual entity holding the license.

(d) Any operator that fails to file, in whole or in part, the ownership information required in accordance with subsection (a) of this section or willingly or knowingly files false or incorrect ownership information, may, after notice and opportunity for a hearing, be subject to the penalties set forth in §§ 23-17-8 and 23-17-8.1. The director, in his or her discretion, may require that a financial audit be conducted of the nursing facility at the operator’s expense and may impose a fine of the greater of one million dollars ($1,000,000) or the amount of facility assets diverted to undisclosed interest holders.

SECTION 2. Chapter 23-17 of the General Laws entitled "Licensing of Healthcare Facilities" is hereby amended by adding thereto the following section: 23-17-12.12. Withdrawal of equity or assets.

(a) On or after July 1, 2026, no nursing facility licensed under this chapter may withdraw equity or transfer assets which, in the aggregate, exceed three percent (3%) of such facility’s total reported annual revenue for patient care services, without prior written approval of the director. Notification shall be made in a form acceptable to the licensing agency by certified mail. Total reported annual revenue shall be based on the facility’s most recently filed annual BM-64 with the department of human services, or alternative form prescribed by the director.

(b) The director shall make a determination to approve or disapprove a request for withdrawal of equity or assets under this section within sixty (60) days of the date of receipt of the written request from the facility.

SECTION 3. This act shall take effect upon passage.