New Indiana Health Care Merger Law Unveiled
TL/DR –
On March 13, 2024, Indiana Governor Eric J. Holcomb signed Senate Enrolled Act No. 9, which requires Indiana health care entities involved in a merger or acquisition with total assets of at least $10 million to provide written notice to the attorney general’s office 90 days prior to the event. The act, introduced by State Senator Chris Garten, aims to monitor antitrust issues and mitigate high health care costs in Indiana, which are a result of market consolidation. The notice must include details like business address, contact information, description of the entity and the merger or acquisition, and any materials submitted to a federal or state agency regarding the merger or acquisition.
Indiana’s New Healthcare Mergers and Acquisitions Legislation, SEA 9
On March 13, 2024, Senate Enrolled Act No. 9 (SEA 9), was signed by Indiana Governor Eric J. Holcomb. This act, which comes into effect on July 1, 2024, introduces new requirements regarding notifications for healthcare entity mergers and acquisitions in Indiana.
SEA 9 adds Chapter 8.5 to the Indiana Code. This requires Indiana healthcare entities involved in mergers or acquisitions to provide written notice to the attorney general’s office 90 days prior to the transaction, provided the total assets exceed $10 million.
This legislation was presented by State Senator Chris Garten and resulted from a Health Care Oversight Task Force’s recommendations. As per the Indiana Senate Republicans press release, the task force studied why Indiana had some of the highest health care costs and found market consolidation to be a significant factor.
Notice Requirements and Content
The notice required by SEA 9 must include the entity’s business address, federal tax number, the name and contact details of a representative, a description of the entity, and the merger or acquisition’s details, all certified by a notary public. The attorney general’s office is required to keep all nonpublic information confidential.
Definitions
Acquisition is defined as any agreement that results in a person indirectly or directly gaining control of another person. Health Care Entity includes organizations providing medical services, insurers issuing specific policies, health maintenance organizations, pharmacy benefit managers, administrators, and private equity partnerships seeking a merger or acquisition. Merger refers to any change of ownership, including asset transfers or stock purchases.
Review and Consent
According to SEA 9, the attorney general’s office is to review the submitted notice within 45 days and may analyze any antitrust concerns. The office may also issue a civil investigative demand for additional information, and all information obtained remains confidential.
Implications
The National Conference of State Legislatures reported that 36 bills were enacted in 2023 across 24 states related to health system consolidation and competition. These required or may require notice or consent of transactions to ensure that there is no adverse impact on health care costs, quality, access, or the healthcare workforce.
Indiana’s SEA 9 has a lower threshold for action than other states such as California, New York, and Oregon. Additionally, the broad definition of “health care entity” could increase the number of transactions subject to the 90-day notice requirement.
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