§ 44-701. Limitation on erection of hospital for contagious diseases.

Prior Codifications

1981 Ed., § 32-112.

1973 Ed., § 32-311.

Temporary Addition of Section

Sections 2 to 8 of Law 17-51 added sections to read as follows:

"Sec. 2. Definitions.

"For the purposes of this act, the term:

"(1) 'Emergency' means a situation, physical condition, or one or more practices, methods, or operations that presents imminent danger of death or serious physical or mental harm to a patient, including imminent or actual abandonment of an occupied hospital.

"(2) 'Habitual violation' means a violation of the standards of health, safety, or patient care established under District or federal law that, due to its repetition, presents a reasonable likelihood of serious physical or mental harm to patients.

"(3) 'Hospital' means a facility that provides 24-hour inpatient care, including diagnostic, therapeutic, and other health-related care for a variety of physical or mental conditions and may provide outpatient services, such as emergency care.

"(4) 'Licensee' means a person or other legal entity, other than a receiver appointed pursuant to section 3, that is licensed or required to be licensed to operate a hospital.

"(5) 'Owner' means the holder of the title to the real estate on which the hospital is maintained.

"(6) 'Patient' means a person living in or receiving care from a hospital.

"(7) 'Substantial violation' means a violation of the standards of health, safety, or patient care established under District or federal law that presents a reasonable likelihood of serious physical or mental harm to patients.

"Sec. 3. Appointment of a receiver; grounds; process.

"(a) The Mayor may bring an action in the Superior Court of the District of Columbia requesting the appointment of a receiver to operate a hospital.

"(b) The following circumstances are grounds for the appointment of a receiver:

"(1) A hospital intends to close, but has not arranged for the orderly transfer of patients at least 30 days prior to its closure date;

"(2) An emergency, as defined in section 2(1), exists at the hospital; or

"(3) A habitual or substantial violation, as defined in section 2(2) and (7), respectively, exists at the hospital.

"(c)(1) The court shall hold a hearing no later than 10 days after an action requesting the appointment of a receiver is filed, unless all parties agree to a later date.

"(2) Notice of the hearing shall be served on both the owner and the licensee not less than 5 days before the hearing. If either the owner or the licensee cannot be served, the court shall specify the alternative notice to be provided.

"(3) The Mayor shall post notice of the hearing, using a court-approved form, in a conspicuous place in the hospital, for not less than 3 days before the hearing.

"(4) After the hearing, the court may appoint a receiver if it finds that any one of the grounds for an appointment set forth in subsection (b) of this section has been satisfied.

"(d)(1) The court may:

"(A) Appoint any person considered appropriate as receiver, except a District employee; and

"(B) Remove a receiver for good cause.

"(2) The court shall set a reasonable compensation for the receiver, which shall be paid from the revenue of the hospital.

"(3) A receiver shall not be considered an agent of the District of Columbia.

"Sec. 4. Powers and duties of a receiver.

"(a) A receiver appointed pursuant to this act shall have such powers as the court may direct to:

"(1) Operate the hospital;

"(2) Remedy the conditions that constituted the grounds for the receivership;

"(3) Protect the health, safety, and welfare of the patients; and

"(4) Preserve the assets and property of the patients, owner, and licensee.

"(b) With approval of the court, a receiver shall have the authority to:

"(1) Remedy violations of District or federal laws governing the operation of the hospital;

"(2) Hire, direct, manage, and discharge any employee, including the administrator of the hospital;

"(3) Receive and expend in a reasonable and prudent manner the revenues of the hospital received by the hospital during the 30-day period preceding the date of his or her appointment and any revenue due thereafter;

"(4) Continue the operation of the hospital;

"(5) Continue the care of the patients;

"(6) Correct and eliminate any deficiency of the hospital that endangers the safety or health of the patients; and

"(7) Exercise such additional powers and perform such additional duties, including regular accountings, as the court considers appropriate.

"(c)(1) The receiver shall:

"(A) Apply the revenues of the hospital to current operating expenses and, subject to subparagraphs (B) and (C) of this paragraph, to debts incurred by the licensee prior to the appointment of the receiver;

"(B) Ask the court for direction in the treatment of debts incurred prior to his or her appointment where such debts appear extraordinary, of questionable validity, or unrelated to the normal and expected maintenance and operation of the hospital, or where payment of a debt will interfere with the purposes of the receivership; and

"(C) Give priority to expenditures needed for current, direct patient care.

"(2)(A) If a receiver does not have sufficient funds to cover expenditures needed to prevent or remove jeopardy to the patients, the receiver may petition the court for permission to borrow non-District funds for this purpose. Notice of the receiver's petition to the court for permission to borrow must be given to the owner, the licensee, and the Mayor.

"(B) The court, after a hearing, may authorize the receiver to borrow money upon specified terms of repayment and pledge security, if necessary, if the court determines:

"(i) That the hospital should not be closed and that the loan is reasonably necessary to prevent or remove jeopardy; or

"(ii) That the hospital should be closed and that the loan is necessary to prevent or remove jeopardy to patients for the limited period of time they are awaiting transfer to another hospital or other facility.

"(d) A receiver may not close a hospital without leave of the court. In ruling on the issue of closure, the court shall consider:

"(1) The rights and best interests of the patients;

"(2) The availability of suitable alternative placements;

"(3) The rights, interests, and obligations of the owner and licensee;

"(4) The licensure status of the hospital; and

"(5) Any other factors the court considers relevant.

"(e) The owner and the licensee shall be divested of possession and control of the hospital during the period of receivership, under the conditions the court specifies.

"Sec. 5. Court order to have effect of a license.

An order appointing a receiver pursuant to section 3 shall have the effect of a license of operation for the duration of the receivership. The receiver shall be responsible to the court for the conduct of the hospital during the receivership, and a violation of regulations governing the conduct of the hospital, if not promptly corrected, shall be reported to the court.

"Sec. 6. Court review and termination of a receivership.

"(a) The court shall review the continued necessity of a receivership at least semiannually.

"(b)(1) The court shall terminate a receivership when it certifies that the conditions that prompted the receivership have been corrected or, in the case of a discontinuance of operation, when the patients are safely relocated.

"(2) The court shall not terminate a receivership in favor of the former licensee or of a new licensee, unless the person, or entity, assumes all obligations incurred by the receiver and provides collateral or other assurances of payment considered sufficient by the court.

"Sec. 7. Liability of receiver.

"No person may bring suit against a receiver appointed pursuant to section 3 without first securing leave of the court. Except in cases of gross negligence or intentional wrongdoing, a receiver shall be liable only for actions taken in his or her official capacity, and any adverse judgment shall be satisfied out of receivership assets.

"Sec. 8. Liability of District of Columbia.

"The District of Columbia shall not be liable for repayment of funds borrowed by a receiver during the course of the receivership or responsible for any financial obligations of the hospital."

Section 10(b) of D.C. Law 17-51 provides that the act shall expire after 225 days of its having taken effect.

Sections 5 and 6 of D.C. Law 18-154 added sections to read as follows:

"Sec. 5. Hospital receivership.

"(a) For the purposes of this section, the term:

"(1) 'Emergency' means a situation, physical condition, or one or more practices, methods, or operations that presents imminent danger of death or serious physical or mental harm to a patient, including imminent or actual abandonment of an occupied hospital.

"(2) 'Habitual violation' means a violation of the standards of health, safety, or patient care established under District or federal law that, due to its repetition, presents a reasonable likelihood of serious physical or mental harm to patients.

"(3) 'Hospital' means a facility that provides 24-hour inpatient care, including diagnostic, therapeutic, and other health-related care for a variety of physical or mental conditions, and may provide outpatient services, such as emergency care.

"(4) 'Licensee' means a person or other legal entity, other than a receiver appointed pursuant to this section, that is licensed or required to be licensed to operate a hospital.

"(5) 'Owner' means the holder of the title to the real estate on which the hospital is maintained.

"(6) 'Patient' means a person living in or receiving care from a hospital.

"(7) 'Substantial violation' means a violation of the standards of health, safety, or patient care established under District or federal law that presents a reasonable likelihood of serious physical or mental harm to patients.

"(b) The Mayor may bring an action in the Superior Court of the District of Columbia requesting the appointment of a receiver to operate a hospital on the following grounds:

"(1) A hospital intends to close, but has not arranged for the orderly transfer of patients at least 30 days prior to its closure date;

"(2) An emergency exists at the hospital;

"(3) A habitual or substantial violation exists at the hospital; or

"(4) Insolvency or lack of financial resources of an owner or the licensee has placed the continued operation of the facility in jeopardy.

"(c)(1) The court shall hold a hearing no later than 10 days after an action requesting the appointment of a receiver is filed, unless all parties agree to a later date.

"(2) Notice of the hearing shall be served on both the owner and the licensee not less than 5 days before the hearing. If either the owner or the licensee cannot be served, the court shall specify the alternative notice to be provided.

"(3) The Mayor shall post notice of the hearing, using a court-approved form, in a conspicuous place in the hospital, for not less than 3 days before the hearing.

"(4) After the hearing, the court may appoint a receiver if it finds that any one of the grounds for an appointment set forth in subsection (b) of this section has been satisfied.

"(d)(1) The court may:

"(A) Appoint any person considered appropriate as receiver, except a District employee; and

"(B) Remove a receiver for good cause.

"(2) The court shall set a reasonable compensation for the receiver, which shall be paid from the revenue of the hospital.

"(3) A receiver shall not be considered an agent of the District of Columbia.

"(e) A receiver appointed pursuant to this act shall have such powers as the court may direct to:

"(1) Operate the hospital;

"(2) Remedy the conditions that constituted the grounds for the receivership;

"(3) Protect the health, safety, and welfare of the patients;

"(4) Preserve the assets and property of the patients, owner, and licensee;

"(5) Remedy violations of District or federal law governing the operation of the hospital;

"(6) Hire, direct, manage, and discharge any employee, including the administrator of the hospital;

"(7) Receive and expend, in a reasonable and prudent manner, the revenues of the hospital received by the hospital during the 30-day period preceding the date of his or her appointment and any revenue due thereafter;

"(8) Continue the operation of the hospital;

"(9) Continue the care of the patients;

"(10) Correct and eliminate any deficiency of the hospital that endangers the safety or health of the patients; and

"(11) Exercise such additional powers and perform such additional duties, including regular accountings, as the court considers appropriate.

"(f)(1) The receiver shall:

"(A) Apply the revenues of the hospital to current operating expenses and, subject to subparagraphs (B) and (C) of this paragraph, to debts incurred by the licensee prior to the appointment of the receiver;

"(B) Ask the court for direction in the treatment of debts incurred prior to his or her appointment where such debts appear extraordinary, of questionable validity, or unrelated to the normal and expected maintenance and operation of the hospital, or where payment of a debt will interfere with the purposes of the receivership; and

"(C) Give priority to expenditures needed for current, direct patient care.

"(2)(A) If a receiver does not have sufficient funds to cover expenditures needed to prevent or remove jeopardy to the patients, the receiver may petition the court for permission to borrow non-District funds for this purpose. Notice of the receiver's petition to the court for permission to borrow must be given to the owner, the licensee, and the Mayor.

"(B) The court, after a hearing, may authorize the receiver to borrow money upon specified terms of repayment and pledge security, if necessary, if the court determines:

"(i) That the hospital should not be closed and that the loan is reasonably necessary to prevent or remove jeopardy; or

"(ii) That the hospital should be closed and that the loan is necessary to prevent or remove jeopardy to patients for the limited period of time they are awaiting transfer to another hospital or other facility.

"(g) A receiver may not close a hospital without leave of the court. In ruling on the issue of closure, the court shall consider:

"(1) The rights and best interests of the patients;

"(2) The availability of suitable alternative placements;

"(3) The rights, interests, and obligations of the owner and licensee;

"(4) The licensure status of the hospital; and

"(5) Any other factors the court considers relevant.

"(h) The owner and the licensee shall be divested of possession and control of the hospital during the period of receivership, under the conditions the court specifies.

"(i) An order appointing a receiver pursuant to this section shall have the effect of a license of operation for the duration of the receivership. The receiver shall be responsible to the court for the conduct of the hospital during the receivership, and a violation of regulations governing the conduct of the hospital, if not promptly corrected, shall be reported to the court.

"(j)(1) The court shall review the continued necessity of a receivership at least semiannually.

"(2) The court shall terminate a receivership when it certifies that the conditions that prompted the receivership have been corrected or, in the case of a discontinuance of operation, when the patients have been safely relocated.

"(3) The court shall not terminate a receivership in favor of the former licensee or of a new licensee, unless the person, or entity, assumes all obligations incurred by the receiver and provides collateral or other assurances of payment considered sufficient by the court.

"(k) No person may bring suit against a receiver appointed pursuant to this section without first securing leave of the court. Except in cases of gross negligence or intentional wrongdoing, a receiver shall be liable only for actions taken in his or her official capacity and any adverse judgment shall be satisfied out of receivership assets.

"(l) The District of Columbia shall not be liable for repayment of funds borrowed by a receiver during the course of the receivership or responsible for any financial obligations of the hospital.

"Sec. 6. First source employment agreement.

"The United Medical Center shall enter into a first source employment agreement with the Department of Employment Services with respect to the funds authorized in this act."

Section 8(b) of D.C. Law 18-154 provides that the act shall expire after 225 days of its having taken effect.

Emergency Act Amendments

For temporary (90 day) additions, see §§ 2 to 9 of Establishment of Hospital Receivership Emergency Act of 2007 (D.C. Act 17-81, July 27, 2007, 54 DCR 7993).

For temporary (90 day) additions, see §§ 2 to 8 of Establishment of Hospital Receivership Congressional Review Emergency Act of 2007 (D.C. Act 17-139, October 17, 2007, 54 DCR 10731).

For temporary (90 day) addition, see § 5 of Healthy DC Equal Access Fund and Hospital Stabilization Emergency Amendment Act of 2009 (D.C. Act 18-310, February 18, 2010, 57 DCR 1635).