HealthTrax - A Health Care Transaction Laws Tracker

As of April 1, 2024, health care entities must notify the Office of Health Care Affordability (“OHCA”) of proposed material change transactions at least 90 days prior to closing. From there, OHCA will either i) within 45 days, issue a waiver to a cost and market impact review (“CMIR”), or ii) within 60 days, notify parties of its decision to conduct a CMIR, which could extend the review period to over eight months. OHCA issued regulations in December 2023 that further clarify the entities and transactions subject to review, details regarding comprehensive reviews, and other details of the notice process. OHCA began accepting notices on January 1, 2024. Cal. Health & Saf. Code § 127500 et seq; 22 CCR 97431 et seq.

As of January 1, 2024, parties acquiring retail grocery firms or retail drug firms located within California must provide at least 180-day pre-closing notice to the state Attorney General. Notice is required for such acquisition if the transaction: 1) requires notice under the Hart-Scott-Rodino Act, or 2) involves more than 20 retail grocery or drug firms located in California. “Retail drug firm” is defined broadly to include apothecaries, drugstores, and various types of pharmacies (e.g., off-site, on-site, mail order). Although approval is not explicitly required, the Attorney General will evaluate the transaction and has authority to temporarily enjoin the acquisition if reasonably necessary to complete its evaluation of the transaction’s competitive effects. See Ca. Corp. Code § 14700 et seq.

Proposed legislation seeks to amend the Office of Health Care Affordability (“OHCA”) health care transaction review process to expand the definition of covered health care entities to include management service organizations, health systems, and entities that own or operate a provider. Echoing the failed AB 3129, the bill would also require private equity groups and hedge funds to provide notice of certain transactions between a private equity group or hedge fund and a health care entity. See AB 1415.

AB 3129: Proposed legislation would have required private equity groups and hedge funds to (i) provide 90 days pre-closing notice to and obtain consent from the Attorney General prior to a change of control or an acquisition of a health care facility or provider group, and (ii) provide pre-closing notice to the Attorney General of a change of control or an acquisition of either a nonphysician provider with a gross annual revenue of more than $4,000,0000, or a provider with gross annual revenue between $4,000,000-25,000,000. The legislation would have also provided for additional restrictions on a private equity or hedge fund’s ability to control or contract with certain health care entities, including a prohibition on interfering with professional judgment or exercising certain types of control over physician, psychiatric, and/or dental practices. See AB 3129. AB 3129 passed in the California legislature, but was vetoed by Governor Newsom in September 2024. Governor Newsom cited concerns regarding the redundancy of the bill with the Office of Health Care Affordability’s (OHCA’s) existing authority to review and evaluate health care transactions in the state.

AB 1091: Proposed legislation requiring certain health care entities entering into transactions resulting in a material change with a value of at least $15,000,000 to submit pre-closing notice and obtain approval from the Attorney General failed in 2024. See AB 1091.

Proposed legislation would repeal and reenact, with amendments, Colorado’s current transaction review process (which applies only to licensed Colorado hospitals) to require 60-day pre-closing notice to the state Attorney General for a broader array of transactions involving health care entities (e.g., medical and dental professional service corporations, provider networks), long term care entities, or veterinary care entities. The bill provides the Attorney General with authority to review notices and assess whether proposed transactions are contrary to the public interest. The Attorney General would have authority to convert its review to an investigation under the state’s Antitrust Act, bring an action in district court to enjoin or unwind a transaction, or seek other equitable relief necessary to protect the public interest. See SB 25-198.

The state Attorney General requires 30-day pre-closing notice of any material change transaction involving health care group practices, hospitals or hospital systems. If the Attorney General determines that the transaction will adversely impact competition, it may open a deeper inquiry or seek to postpone the transaction. While no strict timeline is given, transaction review may take up to, or greater than, 200 days after the notice is received. Conn. Gen. Stat. § 19a-486i.

Proposed legislation seeks to restrict private equity firms from purchasing, operating, or holding a controlling interest in hospitals and from leasing property back to hospitals for a fee after acquiring land rights. Additionally, the bill seeks to protect the professional judgment and decisions of healthcare clinicians with independent practice authority from interference by healthcare facilities, providers, and organizations. See S.B. 261.

Proposed legislation seeks to expand the authority of the state Attorney General and Commissioner of Health Strategy to regulate private equity ownership of hospitals, radiology groups and drug rehabilitation facilities. Additionally, the bill seeks to restrict self-dealing property transactions. See S.B. 567.

Proposed legislation seeks to impose restrictions on private equity firms’ acquisition of hospitals, and prohibit hospitals from participating in real estate investment trust transactions. Additionally, the bill seeks to establish physician-led ownership requirements for medical groups and ambulatory surgical centers. See S.B. 469.

Proposed legislation would amend Connecticut’s current health care transaction law to impose additional disclosure requirements for group practices regarding any intended acquisitions or mergers, including those by or with any hospital, PE company, insurer, corporation or group practice. The bill would also, under certain circumstances, eliminate the presumption in favor of approving certificate of need applications for a transfer of ownership of a large group practice, and would require the Health Care Cabinet to examine and develop legislative recommendations to increase oversight of mergers and acquisitions of group practices in Connecticut. See S.B. 837.

Proposed legislation would prohibit private equity firms from acquiring ownership or control of a health care provider’s practice or a health care facility, and require administrators of health care provider practices and health care facilities to disclose the ownership structure of such provider’s practice or facility and any significant changes in such ownership structure to the Health Systems Planning Unit. See H.B. 6570.

Proposed legislation would amend Connecticut’s current health care transaction law to require 60-day (instead of 30-day) pre-closing notice, and grant the Attorney General with the power to impose conditions on transactions to allow them to proceed. It would also expand the scope of health care transactions and entities subject to review to include not only health care group practices, hospitals and hospital systems, but also MSOs, ACOs, and PBMs, among other entities. Additionally, the bill would require notice for and review of certain health care transactions involving private equity entities. See H.B. 6873.

Proposed legislation seeks to prohibit private equity companies and real estate investment trusts, starting October 1, 2025, from acquiring or increasing any direct or indirect ownership interest in, or operational or financial control over a hospital or health system. The bill also seeks to prohibit health care facilities or entities and management services organizations from directly or indirectly interfering with, controlling or otherwise directing clinical decisions of health care providers. If passed, the bill would becoming effective July 1, 2025. See S.B. 1507.

Proposed legislation in Connecticut would have required, by January 1, 2025, that the Office of Health Strategies develop a plan concerning private equity ownership of Connecticut-licensed health care facilities, including (1) assessing whether a certificate of need should be required for a private equity firms’ acquisition of a health care facility; and (2) recommending requirements for the disclosure of information by a health care facility that has private equity ownership. See H.B. 5319.

Proposed legislation requiring health care entities to submit pre-closing notice to the state Attorney General’s Office of certain transactions failed in 2020 and 2021. See H.B. 711; S.B. 1064.

As of January 1, 2024, Illinois requires health care facilities and provider organizations to provide 30-day pre-closing notice to the state Attorney General’s Office of any merger, acquisition or contracting affiliation between two or more health care facilities or provider organizations. Illinois’ review process applies to all applicable in-state entities, and out-of-state entities with sufficient patient revenue in Illinois. While transaction “approval” is not explicitly required, the Attorney General has discretion to open an investigation and challenge conduct the Attorney General deems anti-competitive. A link to the health care transaction notice form can be found here. 740 Ill. Comp. Stat. 10/7.2a.

Proposed legislation would amend Illinois’ current law to require the Illinois Attorney General to consent to any covered health care transactions if a private equity group or hedge fund provides financing to the transaction. See SB 1998.

As of July 1, 2024, Indiana requires health care entities, including but not limited to medical and dental providers, insurers, administrators, and private equity partnerships entering into transactions with health care companies, to notify the Office of the Attorney General ninety (90) days before undergoing a merger or acquisition with another health care entity with a value of at least $10 million. While transaction “approval” is not explicitly required, the Attorney General has discretion to 1) analyze in writing any antitrust concerns; or 2) issue a civil investigative demand for additional information. IC §§ 25-1-8.5-1 — 25-1-8.5-4.

Proposed legislation would amend the definition of “health care entity” in Indiana’s existing review process to exclude a health care provider that is majority owned by licensed Indiana practitioners that routinely provide health care services in the practice. The proposed legislation would also require certain health care entities doing business in Indiana to file reports disclosing ownership interest by a private equity partner. This ownership information and other related disclosures would be kept confidential. See H.B. 1666.

Health care service providers and provider organizations with more than $25 million in annual patient revenue in Massachusetts must provide 60 days pre-closing notice of any material change transaction to the state Attorney General (“AG”), the Center for Health Information and Analysis, and the Health Policy Commission (“HPC”). Guidance released in January 2024 clarifies that management services organizations that negotiate contracts with payers are captured by the law as provider organizations. HPC has 30 days to either initiate cost and market impact review (“CMIR”), which may delay closing up to 215 days from the initial notice date, or to decline to issue a CMIR. Mass. Gen. Laws Ch. 6D § 13; 958 CMR 7.00.

Passed in early 2025, An Act Enhancing the Market Review Process expands the material change notice process to include certain transactions involving private equity ("PE") firms, real estate investment trusts, and PE-backed management services organizations. It introduces a notice requirement for transactions involving a change ownership or control of a provider involving a significant equity investor, significant asset acquisitions or sales including real estate lease-back arrangements, and conversions from non-profit to for-profit status. Additionally, the law allows the HPC to request additional information from PE investors involved in material changes, including, but not limited to, information regarding capital structure, financial condition, ownership and management structure and audited financial statements. Further, the Act grants the AG the power to collect information related to health care costs and cost trends from private investment entities and investigate institutional providers and their parent organizations pursuant to state consumer protection laws. See SB-5159 (awaiting publication in the Mass. Gen. Laws).

Proposed legislation would amend Massachusetts’ current health care transaction review process to reintroduce certain provisions contemplated by S.B. 2881, which was passed by the Senate last year but failed to be enacted. Specifically, the bill would empower the Massachusetts Health Policy Commission (“HPC”) to recommend modifications to proposed transactions to mitigate any significant negative impacts on health care costs, quality, or breadth of services. The bill would also authorize the HPC to refer its final Cost and Market Impact Review (“CMIR”) report to the state Attorney General, with a presumption of unfair trade practices under state consumer protection laws. Furthermore, the bill would require any PE company acquiring ownership or control of a provider or provider organization to deposit a bond with the Massachusetts Department of Health (“DPH”). The bill would additionally introduce restrictions for management services organizations (“MSOs”), including prohibiting MSOs from interfering with the professional judgment or clinical decisions of health care practices, and preventing MSOs from restricting stockholders of health care practices from transferring their stock. See S.D. 1910.

Proposed legislation would expand Massachusetts’ current health care transaction review process to cover transactions involving applications for a new clinic or free-standing ambulatory surgery center license, or a new satellite facility under an existing license. The bill would also require the Health Policy Commission (“HPC”) to conduct a cost and market impact review (“CMIR”) if the HPC finds that a material change is likely to have a significant impact on health care cost growth or competition. The HPC would also have the ability to deny certain proposed material change transactions subject to a CMIR (e.g., where it finds that a transaction would have anticompetitive effects). If the HPC approves a proposed material change upon completion of a CMIR, the HPC would refer the report to the Attorney General to independently determine whether the transaction satisfies state and federal antitrust law. Finally, if the HPC finds upon its annual review that an approved material change has failed to produce the stated benefits in its notice, the bill would empower the HPC to subject the entity to a new CMIR; require the entity to complete a corrective action plan; or prohibit the entity from making any additional material changes for one year following the reevaluation. See H.D. 3147.

Proposed legislation would require 180-day pre-closing notice to the Massachusetts Department of Public Health (“DPH”) and 90-day pre-closing notice to patients prior to any sale, relocation, or closure of (i) clinics or (ii) physician practices with greater than 10 individual physicians engaged in a wholly-owned and controlled group practice. DPH would have authority to conduct a public hearing to consider the potential impacts of the proposed transaction on patient access to services. Additionally, the bill would impose new registration and disclosure obligations for such physician practices, which would require the practices to provide the Board of Registration in Medicine with information related to any substantial equity investors and arrangements with MSOs. See H.D. 4028.

Beginning May 27, 2023, health care entities formed or licensed in the state of Minnesota with average annual revenue of $80 million or more must provide 60-day pre-closing notice to the state Attorney General’s Office and Commissioner of Health for covered transactions, which includes mergers, transfers of ownership and the creation of new health care entities. See Minn. Stat. § 145D.01. The Attorney General has authority to commence an action blocking or unwinding the transaction if determined necessary to protect the public interest. Additionally, beginning January 1, 2024, health care entities with average annual revenue between $10 million and $80 million must submit notice to the Commissioner of Health of covered transactions 30 days pre-closing (or within 10 business days of the date the parties reasonably anticipated entering into the transaction). See Minn. Stat. § 145D.02. The Commissioner of Health will use this data to analyze the impact of transactions in Minnesota on cost, quality, and access to health care.

Proposed legislation in Minnesota would have prohibited private equity companies or real estate investment trusts from either (i) acquiring or increasing direct or indirect ownership interest in a provider or (ii) acquiring or increasing any operational or financial control over a provider. See HF 4206.

Entities must inform the state Attorney General (30 days pre-closing) and/or the Nevada Department of Health and Human Services (60 days post-closing) of proposed health care transactions. The state does not have approval authority under either framework, but may initiate an investigation if it identifies any violations during the pre-closing review. Notice requirements are generally not triggered unless transaction parties have a large Nevada presence. Nev. Rev. Stat. § 598A.290 et seq.; Nev. Rev. Stat. § 439A.126.

Proposed legislation seeks to amend the Health Care Consolidation Oversight Act to require pre-closing notice and approval of certain transfers of control of hospitals, or the acquisition of an independent health care practice by a health care provider organization (e.g., physician organization, IPA, provider network, ACO, DSO) that is owned or affiliated with a health insurer. The bill would require the Health Care Authority to approve, approve with conditions or disapprove of a proposed transaction within 120 days of receiving a complete notice. See H.B. 586.

Proposed legislation would have required 60-day pre-closing notice to the New Mexico Office of Superintendent of Insurance for certain proposed transactions involving hospitals, health care providers, and/or health care provider organizations. The Office would have been required to complete a preliminary review within 60 days of receipt of a complete notice, and would have authority to initiate a comprehensive review or issue a determination that no comprehensive review is needed. If the Office decided to initiate a comprehensive review, it would have had the ability to approve, approve with conditions, or disapprove the transaction. If passed, this bill would have replaced New Mexico’s current hospital transaction review process. See S.B. 14.

As of August 1, 2023, health care entities including physicians practices, physician groups, and management services organization must provide 30 day pre-closing notice to the New York Department of Health for transactions that result in a $25 million or more increase in a health care entity’s total gross in-state revenue. The legislation does not grant the Department of Health approval authority, but requires that the Department post a summary of proposed transactions on its website and allow for public comment. N.Y. Pub. Health Law § 4550 et seq.

Proposed legislation would amend New York State’s current notice-only requirement to require 60-day pre-closing notice to and review by the New York Department of Health. The Department would conduct a preliminary review of all proposed transactions, and would have discretion to initiate a 180-day cost and market impact review. Additionally, reported transactions would be subject to annual reviews by the Department for five years post-closing. See FY 2026 NYS Executive Budget, HMH Article VII Legislation, Part S.

Proposed legislation requiring hospital entities and their affiliates to provide pre-closing notice to the state Attorney General’s Office of certain transactions failed in 2023. See Senate Bill 16.

The Health Care Market Oversight Program, administered by the Oregon Health Authority (“OHA”), requires 30-day pre-closing notice and approval of material health care transactions. If OHA determines a comprehensive review is needed, it then has up to 180 days to review transactions in detail for their impacts on cost, equity, access and quality of care. OHA has broadly enforced its review authority and captured several national platform transactions to date. OHA has also imposed conditions on certain transactions and plans to maintain oversight of the impacts of transactions for up to five years after closing. Or. Rev. Stat. § 415.500 et seq.; Or. Admin. R. 409-070-0000 through -0085.

Legal Challenges: In October 2022, the Oregon Association of Hospitals and Health Systems (“OAHHS”), a hospital trade group, filed a lawsuit in the U.S. District Court in Portland challenging the Oregon Health Authority’s (“OHA’s”) Health Care Market Oversight (“HCMO”) Program. OAHHS sought to invalidate the OHA HCMO program on grounds that it is unconstitutionally vague, in violation of the Due Process Clause of the Fourteenth Amendment, and impermissibly delegates legislative powers to OHA, in violation of the nondelegation doctrine of the Oregon Constitution. Both parties filed for summary judgment, and the judge (Judge Michael Simon, District of Oregon) issued an opinion on May 16, 2024 siding with OHA on the federal question, and declining to assert jurisdiction on the state law question. OAHHS filed a notice of appeal with the U.S. Court of Appeals for the Ninth Circuit on June 18, 2024. As of December 2024, briefing is ongoing.

H.B. 2344: Proposed legislation in Pennsylvania that would have required health care facilities to notify the state Attorney General’s Office 45 days before entering into certain transactions or agreements that result in a material change failed to pass in 2024. See House Bill 2344. The Attorney General would have been permitted to utilize the full 45 days (with an option to extend) to determine whether the proposed transaction was against the public interest. The legislation would have taken effect 180 days after enactment.

H.B. 2012: Proposed legislation in Pennsylvania that would have required 120 days written notice to the Attorney General prior to the effective date of a merger, acquisition, or contracting affiliation between two or more health care facilities, health care facility systems or provider organizations failed to pass in 2024. Health care transactions between a Pennsylvania entity and an out-of-state entity, where the out-of-state entity generates at least $10 million in health care services revenue from patients residing in Pennsylvania, were included in the notice requirement. The legislation would have gone into effect 60 days after enactment. See H.B. 2012.

S.B. 548: Proposed legislation in Pennsylvania that would have required provider organizations and for-profit entities who own or operate hospitals, hospice agencies, or nursing homes to notify the state Attorney General’s Office 90 days before entering into certain transactions or agreements that result in a material change failed to pass in 2024. See Senate Bill 548. The Attorney General would have been permitted to utilize the full 90 days (with an option to extend an additional 30 days) to determine whether the proposed transaction was against the public interest. The legislation would have taken effect 60 days after enactment.

Proposed legislation would require certain health care entities (including health care facilities, provider organizations, and MSOs/DSOs) to provide 90-day pre-closing notice to the Texas Attorney General for proposed material change transactions. The proposed legislation does not define a materiality threshold and does not require explicit “approval” of the transaction from the Attorney General. If passed, this bill would become effective on September 1, 2025. See H.B. 2747.

Proposed legislation would require certain health care entities (including health care facilities, providers, and MSOs/DSOs) to report information regarding ownership and control to the secretary of state (i) annually, and (ii) upon execution of a material change transaction. “Material change transactions” include certain transactions involving a material change to the ownership, operations or governance structure of a health care entity with total in-state and out-of-state assets and annual revenue of at least $10 million. Reports must include information regarding each person with ownership or control over the health care entity, including all private equity funds or other investors with direct or indirect control over the entity, or that operate the entity under a lease, management or operating agreement. If passed, this bill would become effective on September 1, 2025. See SB 1595.

Proposed legislation would require health care entities to provide a 180-day pre-closing notice to the Green Mountain Care Board (the “Board”) and the Attorney General for proposed material change transactions. The Board, in consultation with the Attorney General, would have the authority to approve, conditionally approve, or commence a 180-day comprehensive review of the transaction. Upon completion of a comprehensive review (which would be required for all transactions resulting in a transfer of assets of over one million dollars), the Board would additionally have discretion to disapprove the transaction. The legislation also includes new reporting requirements related to PE ownership in health care entities, and imposes restrictions on friendly-physician arrangements with management services organizations (“MSOs”), including prohibitions on stock transfer restriction agreements and dual ownership in a medical practice and MSO. If passed, this bill would become effective on July 1, 2025. See H.71.

Hospitals, hospital systems and provider organizations must provide notice to the state Attorney General of material transactions at least 60 days prior to closing. Washington’s review process applies to in-state entities, and out-of-state entities with sufficient patient revenue in Washington. Wash. Rev. Code § 19.390.

S.B. 5241: In January 2024, Washington re-introduced proposed legislation that would have expanded the scope of the current review process, including lengthening the notice period, broadening the scope of entities subject to notice requirements, and enhancing the Attorney General’s enforcement authority. The bill was amended in February 2024 to further provide for a preliminary and comprehensive review process, an expedited review process, and a process for requesting confidentiality. Similar proposed legislation had previously been introduced during the 2023 regular session, but did not pass. See Senate Bill 5241.

H.B. 1072: Proposed legislation would have required 60-day pre-closing notice and approval from the Washington Department of Health prior to engaging in certain health care transactions that may have affected access to “protected health services.” “Protected health services” were defined to include reproductive services, death with dignity services and gender-affirming health care, including services provided virtually, on-demand or on-site. The Department would have had the ability to approve, approve with conditions or modifications, or disapprove of a transaction. See H.B. 1072.

H.B. 1881 & S.B. 5704: Proposed legislation would have amended Washington’s existing health care transaction law by granting the Attorney General the authority to approve, approve with conditions or modifications, or deny the proposed transaction. The bill would have also expanded the notice requirement for parties to a material transaction by requiring 90-day (instead of 60-day) pre-closing notice to the Attorney General and the Washington state health authority. The bill would have additionally expanded the types of entities subject to review to include health care service contractors, health maintenance organizations, issuers, and insurance holding company systems, as well as any other person or entity whose primary function is the provision of health care services or that is a pending or actual parent organization of, has control over, or governance of, an entity providing health care services. See H.B. 1881 and S.B. 5704.

Proposed legislation would require health care entities to provide 180-day pre-closing notice to, and receive approval from, the Wisconsin Department of Health Services (“DHS”) before consummating a material change transaction. After receiving a notice, DHS would have 30 days to conduct a preliminary review, after which the transaction would be approved, approved with conditions, or subjected to a more intensive comprehensive review. Comprehensive review would be automatic for transactions resulting in a transfer of assets of over 20 million dollars. Post-closing, DHS would have the authority to monitor post-transaction impacts for 5 years. The legislation also includes new reporting requirements for health care entities and corporate practice restrictions. See AB-50.