S 3025Healthcare: Licensing & Accreditation

Health and Safety - Licensing of Healthcare Facilities

Requires nursing homes to disclose all owners and limits their ability to withdraw money or assets from the facility.

Introduced

Population
Affected

Introduced Mar 5, 2026Committee Senate Health & Human Services

Plain-English Summary

This legislation mandates strict transparency regarding the ownership of nursing facilities in Rhode Island. It requires operators to file detailed ownership information with the Department of Health, including the identities of individuals with interests in the land, buildings, or mortgages. The bill establishes severe penalties for non-compliance, including a potential fine of at least $1 million. Additionally, starting July 1, 2026, the bill prohibits nursing facilities from withdrawing equity or transferring assets exceeding 3% of their annual patient care revenue without prior written approval from the state Director of Health.

For younger readers

This law creates new rules for nursing homes, which are places where older people live to get care. It says that the people who run these homes must tell the government exactly who owns them. If they hide the owners, they can get in big trouble and have to pay a very large fine. Also, the law stops the owners from taking too much money out of the nursing home for themselves. They have to ask for permission before taking a large amount of money to make sure there is enough left to take care of the patients.

Who & Where It Applies

Impacted groups

Nursing facility operatorsNursing home residentsPrivate equity firmsReal estate investors in healthcareDepartment of Health

Impacted communities

All

Constitutional & Fiscal Check

Moderate risk

Moderate. Section 2, which restricts the withdrawal of equity or transfer of assets from a private business, could be challenged as a regulatory taking under the Fifth Amendment or a violation of Due Process. Furthermore, the mandatory minimum fine of $1 million in Section 1 could be challenged under the Eighth Amendment as an "excessive fine," particularly if the infraction is administrative in nature rather than directly harmful to patient health.

Estimated cost

None

Estimated revenue

Amount unknown

Bill Analysis

Both viewpoints

For Progressives

Combats the predatory practices of private equity and corporate owners who strip assets from nursing homes, ensuring financial resources remain available for patient care and the welfare of the community.
Increases systemic transparency by forcing the disclosure of "ultimate" owners, preventing wealthy investors from hiding behind shell companies to avoid accountability for poor conditions.
Imposes substantial financial penalties (minimum $1 million) on bad actors, enforcing a strong standard of accountability and deterring the exploitation of the social safety net.
The restriction on withdrawing equity does not take effect until July 1, 2026, potentially giving predatory owners a two-year window to accelerate asset stripping before the ban is enforced.
Allows for the withdrawal of up to 3% of revenue without oversight, which some may argue is still too high a profit margin to be extracted from government-funded healthcare services.
Relies heavily on the discretion of the Director to approve asset transfers, which could be weakened if a future administration appoints a Director sympathetic to corporate interests rather than social justice.

For Conservatives

Promotes the rule of law by cracking down on fraudulent filings and deceptive business practices, ensuring that bad actors do not undercut legitimate business operators.
Enhances market transparency, allowing consumers and families to know exactly who they are doing business with when selecting a facility.
Protects the integrity of the industry by weeding out operators who are financially unstable or engaging in diverted asset schemes that could lead to bankruptcy and taxpayer bailouts.
Represents a significant government intrusion into private property rights by restricting a business owner's freedom to withdraw their own equity or move assets without bureaucratic permission.
Imposes an excessive and potentially ruinous minimum fine of $1 million, which could be viewed as a weaponization of government power against private enterprise.
Creates substantial regulatory hurdles and red tape for business operators, requiring detailed disclosures and waiting periods that hamper efficient business management.

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.