1. For the purposes of this section:

(a) An “affiliated person” is a person controlled by any combination of the hospital, the parent corporation, a subsidiary or the principal stockholders or officers or directors of any of the foregoing.

(b) A “subsidiary” is a person of which either the hospital and the parent corporation or the hospital or the parent corporation holds practical control.

2. No hospital may engage in any transaction or agreement with its parent corporation, or with any subsidiary or affiliated person which will result or has resulted in:

(a) Substitution contrary to the interest of the hospital and through any method of any asset of the hospital with an asset or assets of inferior quality or lower fair market value;

(b) Deception as to the true operating results of the hospital;

(c) Deception as to the true financial condition of the hospital;

(d) Allocation to the hospital of a proportion of the expense of combined facilities or operations which is unfavorable to the hospital;

(e) Unfair or excessive charges against the hospital for services, facilities or supplies;

(f) Unfair and inadequate charges by the hospital for services, facilities or supplies furnished by the hospital to others; or

(g) Payment by the hospital for services, facilities or supplies not reasonably needed by the hospital.

3. If the Director has reasonable cause to believe that a violation of subsection 2 has occurred, the Director may conduct an examination of any books and records of the hospital, parent corporation, subsidiary or affiliated person which the Director deems pertinent to the examination. The Director has the same authority to examine the parent corporation, subsidiary or affiliated person and recover the cost of the examination as the Director has with regard to the hospital. A parent corporation, subsidiary or affiliated person which refuses to permit the examination of its books and records is subject to the fine provided for in subsection 4 for each day that access to the books or records is restricted.

4. If a hospital, parent corporation, subsidiary or affiliated person is found, after notice and a hearing, to have violated the provisions of this section, the Director may impose an administrative fine of not more than $20,000 for each violation or the actual amount of damage caused by the violation, whichever is greater.

5. Upon a second or subsequent violation of the provisions of this section, the Director may commence a legal action in the district court of any county to secure an injunction against further violations of this section.

(Added to NRS by 1987, 872)