Department of Health‑backed bill would require approvals for large transfers and cap equity withdrawals from nursing homes

Senate Bill 789, introduced at the Department of Health’s request and presented in committee by Department representative Neil Heitinen, would require nursing‑home owners to obtain Department approval before withdrawing more than 3% of a facility’s annual revenue in any given year and to disclose certain transfers of assets and ownership information. The Department said the measure is intended to prevent practices that jeopardize facility solvency and resident care by siphoning taxpayer‑funded Medicaid and Medicare dollars out of operating facilities.

"We want to prevent the practice of siphoning away funds from nursing homes and ensure those funds support patient care and capital investments," Neil Heitinen said. The Department described regulatory changes already made to monitor solvency and said the 3% withdrawal threshold would give regulators early visibility into potentially risky owner distributions.

Supporters from the Senior Agenda Coalition backed the 3% threshold as a monitoring tool. John Gage of the Rhode Island Health Care Association opposed the cap as unduly restrictive, arguing it would deter investment in nursing homes and duplicate existing federal and state reporting obligations; he described proposed penalties as excessive. Witnesses asked the Department and sponsors to work with industry on workable thresholds and reporting formats.

After testimony, the committee voted to hold SB 789 for further consideration and stakeholder negotiation.