Indiana Prioritizes Health Care Consolidation: A New Focus
TL/DR –
On March 13, 2024, Indiana passed Senate Enrolled Act No. 9 (S.B. 9), requiring health care entities to provide 90 days’ written notice to the Indiana Attorney General before a merger or acquisition that results in a change of control. The law applies to organizations providing medical services, insurers, health maintenance organizations, pharmacy benefit managers, administrators, and private equity partnerships engaged in mergers or acquisitions, specifically those with combined assets of at least $10 million. The law does not grant the Attorney General authority to approve or deny a transaction, but they may evaluate antitrust concerns and demand additional information.
Indiana Health Care Transaction Regulations
Effective from July 1, 2024, Indiana has introduced Senate Enrolled Act No. 9, or S.B. 9, to regulate health care transactions. This act necessitates all Indiana-based health care entities to provide written notice to the Indiana Attorney General (AG) 90 days prior to any merger or acquisition that results in a change of control. The AG doesn’t hold the power to approve or reject such transactions, but can assess potential antitrust issues.
Health Organizations Affected by S.B. 9
The S.B. 9 refers to various “health care entities” that need to comply with this documentation, such as:
- Organizations offering diagnostic, medical, surgical, dental, or rehabilitative care;
- Insurers providing accident and sickness insurance;
- Health maintenance organizations;
- Pharmacy benefit managers, administrators;
- And private equity partnerships undergoing a merger or acquisition with any health care entity.
An “acquisition” or a “merger” under the law implies any activity or agreement which results in control transfer. A health care entity, associated with a merger or acquisition with a total asset value of $10 million or above, is obliged to notify the AG.
Information Required in Transaction Notice
The notice to the AG, as per S.B. 9, needs to incorporate the following details about each entity involved:
- Official address and federal tax number;
- Contact details of a representative;
- Description of the entity;
- A thorough outline of the acquisition or merger, including the expected timeline;
- Supporting documents sent to any federal or state agency concerning the transaction.
Confidential information will not be divulged to the public and will be held privately by the AG.
Transaction Review Process
Post receiving a transaction notice, the AG has 45 days to review the information and prepare an analysis of potential antitrust concerns. The AG must share this review with the notifying health care entity and may also request additional information if required.
Future Implications of S.B. 9
S.B. 9, similar to other state health care transaction review laws, aims to increase scrutiny of health care transactions. As state oversight over health care transactions expands, entities must navigate through processes and requirements that aren’t always explicit, potentially leading to more queries than resolutions.
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