Prime Healthcare fined for converting hospitals to nonprofits without state’s permission
In what may be the largest fine the Rhode Island Department of Health has ever leveled against a health system, Prime Healthcare will pay $1 million for failing to get regulatory approval to convert two of its hospitals in the state into nonprofits.
As explained by Rhode Island Public Radio, Prime did submit applications on Dec. 31, 2016, to move Landmark Medical Center in Woonsocket, R.I., and the Rehabilitation Hospital of Rhode Island in North Smithfield—hospitals it purchased in 2013—into the company’s charitable foundation, essentially making them nonprofits. Prime’s applications were still being reviewed when the department began repeatedly questioning whether the transaction had been completed without approval, which would be a violation of state law. The company repeatedly denied making the change until Aug. 25, when it acknowledged it had considered the transaction completed back on Dec. 31—the day it submitted its applications.
The illegal action allowed the hospital operator to avoid paying millions in property taxes for 2017. The state is allowing Prime to continue running the facilities as nonprofits for the time being to “avoid disruption” in its care for patients.
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John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.