S 2388Medical Services

Health and Safety - Determination of Need for New Healthcare Equipment and New Institutional Health Services

This bill halts the issuing of new home care and hospice licenses until 2031 pending a state capacity study.

Held for study

Population
Affected

Introduced Jan 30, 2026Committee Senate Health & Human Services

Plain-English Summary

This legislation establishes a moratorium (a temporary ban) on issuing new state licenses for home care providers, home nursing care providers, and hospice providers until July 1, 2031. During this freeze, the Department of Health must conduct a study to evaluate the current capacity and need for these services. The bill sets a maximum number of licenses based on those active in June 2026. If existing providers close, the total number of allowed licenses will permanently decrease. Additionally, all providers are required to maintain a physical, non-residential office location.

For younger readers

Imagine a town that decides there are enough ice cream trucks and stops letting anyone start a new ice cream truck business for five years. This law does that for businesses that take care of sick or elderly people in their homes. For the next five years, no new companies can start this work unless there is an emergency. The government wants to count the businesses and see if they are doing a good job first. Also, if an old business closes down, that spot is gone forever, and the total number of allowed businesses goes down.

Who & Where It Applies

Impacted groups

Home care providersHospice providersHome nursing care providersElderly residentsTerminally ill patients

Impacted communities

All

Constitutional & Fiscal Check

The "ratchet down" provision (Section 1(f)), which permanently reduces the number of available licenses whenever a provider closes, combined with the moratorium, could be challenged under the Due Process Clause of the 14th Amendment. Opponents might argue this creates an arbitrary restriction on the right to earn a living (economic liberty) that lacks a rational connection to public health or safety, effectively creating a state-sanctioned monopoly for incumbents.

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Mandates a comprehensive state study to identify underserved geographic areas and populations, which could lead to more targeted and equitable healthcare resource allocation in the future.
Prevents the proliferation of potentially low-quality, profit-driven providers by requiring a physical non-residential office and pausing new entrants until needs are assessed.
Allows for exceptions in cases of compelling circumstances affecting quality of life, ensuring that critical patient needs like pain management are still prioritized over the administrative freeze.
Reduces the overall supply of home care and hospice providers by permanently eliminating license slots when a business closes, potentially creating scarcity and longer wait times for vulnerable patients.
Protects existing corporate incumbents from competition, which could stifle innovation and keep prices higher for patients relying on social safety nets.
Limits the ability of new, smaller, or community-based organizations to enter the market and address specific cultural or local needs during the five-year moratorium.

For Conservatives

Implements stricter standards by requiring a physical non-residential office, preventing illegitimate or fraudulent "fly-by-night" operations from entering the market.
Protects established businesses from market saturation and aggressive competition, potentially stabilizing the industry for current operators.
Ensures that state resources are not wasted processing applications for unnecessary new providers by mandating a utilization study before expanding the government bureaucracy.
Violates free market principles by imposing a government-mandated moratorium on new businesses, stifling entrepreneurship and economic competition.
Empowers government bureaucrats to determine the "need" for services rather than allowing market forces and consumer demand to dictate supply.
Creates a government-enforced protectionist racket for existing companies by permanently reducing the number of allowed licenses whenever a competitor closes.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 47 additions

SECTION 1. Chapter 23-15 of the General Laws entitled "Determination of Need for New Healthcare Equipment and New Institutional Health Services" is hereby amended by adding thereto the following section: 23-15-12. System planning and licensure control for home care provider, home nursing care provider and hospice provider licenses -- Moratorium.

(a) The health services council shall not review, and applicable state licensing agencies shall not issue, any approvals for new home care provider, home nursing care provider or hospice provider licenses prior to July 1, 2031; provided, however, that any review by the health services council of the department of health and approval by state agencies may be conducted during the moratorium period in the case of an emergency circumstance; a certificate of need application not previously approved; a change in ownership with respect to an existing home care provider, home nursing care provider or hospice provider license; a change in the effective control of a home care provider, home nursing care provider or hospice provider license or a compelling circumstance affecting the quality of life with respect to a certain geographic area or subpopulation including, but not limited to, pain control and symptom management delivered to the home. Provided, however, that any certificate of need application pending at the time of the effective date of this section shall continue to be reviewed pursuant to the provisions of chapter 15 of title 23; and shall not be subject to the moratorium provisions of this section.

(b) During the moratorium period provided in subsection (a) of this section, the department of health shall conduct a statewide utilization and capacity study separate and apart from any other statutory study or report of services delivered by home care providers, home nursing care providers and hospice providers. Such study may include, but not be limited to, an assessment of:

(1) The current availability and utilization of home care provider, home nursing care provider and hospice provider services;

(2) The geographic areas and subpopulations that may be underserved or have reduced access to specific types of health care services; and

(3) Other factors that the department deems pertinent to health care utilization at home. The report may also include the department of health's recommendations for addressing identified gaps in the provision of health care services to homebound patients, recommendations concerning a lack of access to care at home, projection of future demand, and duplicative and/or redundant services.

(c) Should the department not produce a report by July 1, 2031, or at any time within a subsequent five (5) year interval, the moratorium on issuing home care provider, home nursing care provider and hospice provider licenses shall remain in effect.

(d) The department’s health services council can only consider gaps as identified in the department’s five (5) year study as factors to determine new home care provider, home nursing care provider or hospice provider certificates of need.

(e) The number of home care providers, home nursing care providers and hospice providers licenses in effect as of June 30, 2026, shall be the maximum number of licenses issued in each licensure category. In the event of a five percent (5%) or more reduction of licenses within a calendar year, this new figure on December 31 of that year shall be the new maximum number of licenses for that licensure category.

(f) In the event a home care provider, home nursing care provider or hospice provider closes its operations without a change of effective control, this closure will reduce the maximum number of licenses for that licensure category by one license.

(g) All home care providers, home nursing care providers and hospice providers shall maintain a physical non-residential office location in accordance with any and all requirements by the department of state and the department of health.

(h) If any statute or regulation conflicts with the provisions of this section, the provisions of this section shall prevail.

SECTION 2. This act shall take effect on July 1, 2026.