LSHC Horizons Brochure 2024 - Flipbook - Page 58
Hogan Lovells | 2024 Life Sciences and Health Care Horizons | Hospitals and Health Care Providers
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The growth of state health care transaction reporting laws
A growing number of states have enacted health
care transaction reporting laws that may delay
or even unwind hospital and physician group
mergers and acquisitions. California, Connecticut,
Illinois, Massachusetts, Minnesota, Nevada, New
York, Oregon, and Washington have already
enacted such laws, and other states (e.g., Florida)
have considered joining. Multi-state transactions
may need to navigate multiple different regulatory
schemes at once, the scope of which can be fairly
broad – reaching beyond health care providers
(HCPs) to management services organizations
(MSOs) and entities (such as insurers, universities,
or private equity firms) that own or control a
health care provider. We expect to see continued
movement in this space in 2024.
New Minnesota legislation empowers regulators
to block a transaction. Health care entities
with average revenue of $80 million or more
must provide 60-150 days’ pre-closing notice
to the Attorney General and the Department of
Health.3 The Attorney General may then “bring
an action in district court to enjoin or unwind a
transaction” if a transaction is “contrary to public
Michael W. Snow
Partner
Washington, D.C.
interest” or lessens competition.4 Minnesota joins
Oregon in giving regulators extensive authority.5
a transaction, they often require reporting of
sensitive information to the state regulators.
New laws in New York, Illinois, and California
may delay transactions anywhere from 30 to
175 days or more. New York requires written
notice 30 days before closing any “material
transaction”.6 Regulators will make a summary
publicly available, solicit comment, and forward
all information to the Attorney General.7 Health
care facilities and provider organizations in
Illinois must give 30 days’ pre-closing notice to
the Attorney General of a “covered transaction”,
and the Attorney General may further delay
closing while the parties respond to requests for
additional information.8 After receiving notice
of a “material change transaction”, California’s
Office of Health Care Affordability (OHCA)
has 60 days to decide whether to conduct a
“cost and market impact review” or “CMIR”,
a minimum 115 day process to analyze the
transaction’s effect on health care costs and
competition.9 These statutes join Washington
State’s 60-day notice requirement.10 Even where
such a reporting law may not delay or unwind
The flurry of new statutes shows three major
trends: increased public disclosure of proposed
transactions; regulator authority to delay closing
while scrutinizing transactions; and increased
antitrust enforcement risk in the health care
space. Hospitals and physician groups should
build transaction notices into their timelines and
anticipate state pushback where transactions
result in problematic consolidation, layoffs,
or service cuts.
Jessica Hanna
Counsel
Washington, D.C.
3 Minn. Stat. §§ 145D.01(Subd. 2)(b), (e).
4 Id. § 145D.01(Subd. 3), (Subd. 5).
5 Ore. Rev. Stat § 415.501; Or. Admin. R. 409-070-0060.
6 N.Y. Pub. Health Law § 4552(1).
7 Id. § 4552(2).
8 740 ILCS 10/7.2a(b), (d); Notifying the Attorney General of Covered
Health Care Transactions, Ill. Att’y Gen. (Accessed Jan. 31, 2024),
https://www.illinoisattorneygeneral.gov/Consumer-Protection/
Health-Care/Antitrust-Health-Care/.
9 22 Cal. Code Regs. §§ 97435(a), 97440(a), 97442.
10 Rev. Code Wash. § 19.390.030; Healthcare Transactions
Notification Requirement, Wash. Att’y Gen. (Accessed Jan.
31, 2024), https://www.atg.wa.gov/healthcare-transactionsnotification-requirement.
Joseph (Joe) Liss
Associate
Philadelphia
