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S 2380Medical Services

Health and Safety - The Hospital Conversions Act

This bill requires birthing centers to obtain state approval, provide six months' notice, and undergo financial review before closing.

Held for study
Population
Affected
35
Email Legislator
Introduced Jan 30, 2026Committee Senate Health & Human Services

Plain-English Summary

This legislation amends the "Hospital Conversions Act" to regulate 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 closing or reducing services. Facilities must submit a detailed application including financial justifications, impact assessments, and patient transition plans. The Department of Health is required to hold public hearings and commission an independent expert evaluation. The Director may only approve the closure if the facility proves, by clear and convincing evidence, that it is unsustainable and that community access remains safe.

For younger readers

This law helps make sure that places where babies are born, like hospitals or special centers, don't close down suddenly. If a place wants to close or stop helping moms and babies, they have to tell the government and the public six months ahead of time. They must explain why they don't have enough money to stay open and show plans for how they will take care of the patients they already have. The government will have a meeting to listen to people's concerns and decide if the place is allowed to close.

Who & Where It Applies

Impacted groups
Pregnant womenBirthing centersHospital administratorsNewbornsMidwives and Doulas
Impacted communities
All

Constitutional & Fiscal Check

Moderate risk

There is a moderate constitutional risk regarding the "Takings Clause" of the Fifth Amendment. By granting the state authority to deny a closure application even if a business is losing money (unless specific evidentiary standards are met), the state may be forcing a private entity to operate at a loss for the public good without just compensation. However, courts often grant states broad police powers regarding public health regulations.

Estimated cost
Amount unknown
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Protects vulnerable populations and Medicaid members by ensuring that essential maternal healthcare services cannot be removed from a community without a rigorous review of the impact on equity and access.
  • Increases corporate transparency by requiring parent health systems to disclose detailed financial records, executive compensation, and reserves to prove that a closure is truly necessary rather than just for profit maximization.
  • Empowers the community and workers by mandating public hearings and requiring notice to patient advocacy groups, ensuring that the voices of those most affected are heard before decisions are made.
  • Does not provide state funding or subsidies to actually rescue failing birthing centers, potentially leaving communities with a "zombie" facility that is legally open but financially insolvent.
  • Consolidates decision-making power into the hands of a single appointed official (the Director of Health), which could be problematic if that official is not aligned with progressive health equity goals.
  • May inadvertently discourage the opening of new, independent birthing centers if operators fear they will be legally trapped in a business they cannot easily exit if it becomes financially unviable.
For Conservatives
  • Supports family values and the well-being of newborns by ensuring that essential medical infrastructure remains available for childbirth in local communities.
  • Demands accountability from large healthcare conglomerates, preventing them from stripping assets from local community resources to pad executive compensation or investment portfolios.
  • Ensures that rural and suburban areas are not left without services due to corporate consolidation, preserving the viability of towns outside of the major urban centers.
  • Represents a significant government intrusion into the free market by preventing private business owners from closing a losing venture, essentially forcing them to operate against their will.
  • Imposes burdensome regulatory costs on healthcare providers, such as paying for independent experts and detailed audits, which could drive up the overall cost of healthcare.
  • Interferes with property rights by granting the state the authority to dictate how a private entity uses its capital, staff, and facilities.

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.