The Health Department has proposed a host of conditions to be placed on Roger Williams Hospital's license, which is up for renewal.

01:00 AM EST on Tuesday, February 14, 2006

BY FELICE J. FREYER
Journal Medical Writer

PROVIDENCE -- The Health Department yesterday put forth a plan that would give the state close oversight of Roger Williams Hospital.

The proposal -- draft conditions to be placed on the hospital's license -- were presented to hospital officials moments before an unprecedented hearing on the license renewal.

Among the proposed conditions were requirements that Roger Williams invite a Health Department representative to all board meetings and file a monthly report. The hospital would also have to give advance notice to both the department and the state attorney general whenever it appoints a new trustee or a new senior administrator, whenever it changes the duties of a senior administrator, and whenever it changes a corporate document.

Kenneth H. Belcher, the hospital's interim president, declined in a phone interview to address specific points in the proposal, but said, "This organization should and will make certain that the doors are open." He said he hoped to negotiate with the Health Department for a set of conditions that would allow openness without being "overly intrusive."

Other proposed conditions would require Roger Williams Medical Center to hire a forensic auditor to review its finances and an expert in nonprofit corporate governance to recommend changes in the way the hospital is governed. Another condition would have the hospital study the Sarbanes-Oxley Act, an anticorruption law that applies to for-profit businesses, and adopt aspects of the law that are applicable to nonprofits.

The Health Department scheduled yesterday's hearing after Roger Williams was indicted on federal corruption charges, to consider whether to impose conditions on the hospital's license.

Roger Williams Medical Center, along with its president and two other individuals, was accused of hiring a state senator to advance its interests in the state legislature. Roger Williams has since negotiated a plea agreement in which it acknowledged criminal wrongdoing and agreed to new ethics rules and additional care for the poor.

Yesterday's session was a pre-hearing conference that lasted barely a half-hour. Catherine R. Warren, the hearing officer, continued the license hearing to March 14, saying the Health Department needed to amend its order to specify its statutory authority and intentions.

Donald C. Williams, the Health Department's associate director for health services regulation, said afterward that he hoped a negotiated agreement could be reached before March 14. "We want to do it. They want to do it," Williams said. "It should happen."

Meanwhile, Belcher, the hospital's interim president, met on Friday with Governor Carcieri and Attorney General Patrick C. Lynch. Belcher said the governor called the meeting to get an update on changes at the hospital. He said they discussed ideas on how to restructure the Board of Trustees, including replacing the five board members who recently left, revising bylaws, and establishing committees.

The Roger Williams board has been criticized for not firing the hospital president, Robert A. Urciuoli, in 1998 when he was found to have misappropriated funds, and for rejecting a deal with federal prosecutors that would have prevented this year's indictment. In December 2001, the board of the Roger Williams Medical Center, the hospital's parent company, reduced its size from about 20 to 3, with Urciuoli 1 of the 3. The hospital maintained a separate board with 21 members.

Deputy Attorney General Gerald J. Coyne said that he was investigating whether the board's reduction should have been scrutinized by state authorities. The change in the board makeup might have represented a change in hospital ownership significant enough to trigger the Hospital Conversions Act, which tightly regulates hospital mergers and acquisitions, he said.

"The troubling thing is that we were never told when it happened," Coyne said.

Coyne said that Roger Williams' governance structure is "very, very murky." For example, he could not ascertain whether the 21-member hospital board reports to the three-member medical center board. It's not clear what was the purpose of setting up a holding company -- the medical center, with its own board -- in addition to the hospital, Coyne said.

ffreyer@projo.com / (401) 277-7397