Landmark Medical Center, on the brink of financial collapse, is asking the General Assembly for a fast track to merge with another hospital.

Officials of the Woonsocket hospital say Landmark will close by the end of the year unless someone buys it, and Landmark is negotiating with Memorial Hospital of Rhode Island, in Pawtucket. But current law would require any such merger plan to undergo many months of scrutiny. Landmark can’t survive that long, said hospital spokesman Bill Fischer.

Late last week, Woonsocket legislators filed bills that would exempt Landmark from the Hospital Conversions Act, the state law that governs hospital mergers. Instead, any merger proposal for Landmark would undergo a much quicker and less-rigorous process.

But the proposal will necessitate swift action, because the Assembly hopes to adjourn Friday.

“We’re not looking for state funds. We’re not looking for a bailout,” Fischer said. “We just cannot survive the scrutiny of the Hospital Conversions Act.”

The regulators who oversee mergers, however, have reservations. Dr. David R. Gifford, director of health, said that the bill could have unintended consequences, and he cautioned against hasty action in the legislature. “This legislation has implications that go beyond Landmark,” Gifford said. He said Landmark has other options, including receivership or bankruptcy, and noted that the bill contains no guarantees that the hospital won’t close anyway.

Attorney General Patrick C. Lynch opposes the bill altogether, saying he prefers to accelerate the review process than to bypass it. “A person or an entity shouldn’t get special treatment without having to answer tough questions,” he said.

According to Lynch, the bill would not preserve Landmark because plans for Memorial’s takeover will leave the hospital “nothing more than a shell.” He said hospital officials have told him that plans could include transferring medical services such as obstetrics, home care, pathology and rehabilitation to Memorial, and relocating oncology services to a spot between the two hospitals.

Fischer called those “hypothetical scenarios at best” that were mentioned during informal discussions.

In a brief statement, Memorial Hospital acknowledged its interest in possibly purchasing Landmark, and said the result could be “a regional health-care delivery system.” Memorial’s statement described the Pawtucket hospital as “financially stable.” Spokeswoman Dyana Koelsch said that Memorial lost $1.9 million in the last fiscal year but more than covered the loss with interest from investments. Memorial’s net assets total $77.2 million.

Landmark, in contrast, has been hemorrhaging money for years, and its net worth started falling into the negative numbers in 2005. For the fiscal year that ended Sept. 30, 2007, Landmark’s debts exceeded its assets by $7.2 million, Fischer said.

Although most hospitals in Rhode Island are struggling, Landmark is the only one with a negative net worth. Unlike other hospitals, it has little endowment –– just $450,000 in restricted funds that cannot be used for day-to-day operations. Landmark also has a high proportion of poor and elderly patients who rely on government programs that pay low rates. Last year the hospital spent $8.5 million on uncompensated care.

Attempts to find a partner or develop enough profitable services have failed. Landmark recently ended a three-year-old cardiac-surgery program because it did not attract enough patients to break even.

“Desperate times call for desperate measures, and that’s where we are,” said Rep. Jon D. Brien, D-Woonsocket, one the bill’s sponsors. “I’m determined as a legislator from Woonsocket to do everything in my power to save Landmark.”

Landmark’s failure would mean shuttering the state’s third-busiest emergency room and leaving 1,055 workers without jobs. The hospital was caring for 115 inpatients yesterday.

“What we’re attempting to do is speed up the process,” said Sen. Roger A. Picard, D-Woonsocket, another sponsor. “In speeding up the process, we’re not going to give up the safeguards.”

The Hospital Conversions Act was passed in the 1990s when out-of-state for-profit hospital chains were considering buying nonprofit hospitals in Rhode Island. The law aimed to protect local community assets, by requiring the health director to vet merger proposals for their effect on public health and welfare, and the attorney general to guard charitable assets — the gains from money donated over the years.

The bill that the Assembly will consider in its final days exempts any hospital in a “negative net asset position” from the act. Instead, such a hospital proposing a merger would undergo only a “change in effective control” review by the Health Department, in which it weighs the “character, competence and standing in the community” of anyone proposing to buy a Rhode Island health-care company. The bill also requires the Health Department to complete the review in 90 days and allows it to suspend its work on any other applications.

The bill would also exempt Landmark’s rehabilitation hospital in North Smithfield from the Hospital Conversions Act. Landmark has already applied to sell the rehab hospital to a for-profit hospital. If the bill is passed, that sale would also be exempt from review –– as would any other future sale of the rehab hospital.

The state’s two multi-hospital companies, Lifespan and Care New England, are in the process of applying to merge under the Hospital Conversions Act. It took those hospitals 11 months to prepare 50,000 pages of documents just to start the process.

Nevertheless, Lifespan spokeswoman Jane Bruno said it’s unlikely that Lifespan would oppose the Landmark bill. But if, as the bill expressly allows, the Health Department decided to shelve the Lifespan-Care New England merger plan so it could focus on Landmark, “at that point we would have serious concerns,” she said.

Asked about putting the hospital in receivership, Fischer said that process would not ensure its survival. The receiver would be obliged to sell off assets to pay debts, and could shut down the hospital. Doctors, nurses and patients are less likely to remain loyal to a hospital that is in receivership, leading to accelerating losses.

ffreyer@projo.com