As Taft reported in a prior bulletin, earlier versions of Indiana House Bill 1666 (HB 1666) would have created a "merger approval board" within the Office of the Attorney General to review and approve or deny certain mergers or acquisitions of health care entities, in addition to imposing certain reporting requirements with respect to proposed health care transactions and with respect to ownership of certain health care entities. On May 6, the Governor signed HB 1666 into law, and the final version of the bill differs substantially from earlier versions of the bill. Most notably, the bill, as enacted, no longer substantially expands the current reporting requirements imposed on health care entity transactions, nor does it require approval of such transactions by a merger approval board.
Transaction Reporting Requirements
The final HB 1666 no longer removes the $10 million threshold for reporting mergers and acquisitions between Indiana health care entities and other health care entities. Thus, there is no change to the existing law, which requires notice to the Attorney General of proposed health care mergers or acquisitions only where the transaction involves a health care entity with at least $10 million in assets. Additionally, the final version adds an exception to the definition of "health care entity" for health care providers that are majority owned, or would be majority owned after the merger or acquisition, by practitioners that are (1) licensed in Indiana and (2) routinely provide health care services in the practitioner owned practice. Thus, transactions involving only such providers need not be reported to the Attorney General.
The final bill also does away with the idea of a merger approval board. Instead, the bill gives the Attorney General's office the power to investigate the market concentration of a health care entity and issue a civil investigative demand. Any nonpublic information the Attorney General collects during their investigation must be kept confidential.
Ownership Information Reporting Requirements
The health care entity ownership reporting information requirements that were in the version of the bill Taft previously reported on remained in the final version of the bill, with some minor changes. Specifically, the final bill requires:
- Hospitals to report ownership information in their annual fiscal report to the Indiana Department of Health.
- Insurers, third-party administrators, and pharmacy benefit managers doing business in Indiana to report ownership information to the Indiana Department of Insurance beginning July 1, 2025 and each July 1 after.
- Other health care entities, defined as any businesses providing diagnostic, medical, surgical, dental treatment, or rehabilitative care, to report ownership information biennially to the Secretary of State, effective Jan. 1, 2026.
Under the final version of the bill, the required information now includes the name, business address, business website, ownership stake, and identification number of each person or entity that has: (1) at least a 5% ownership interest in the entity, (2) a controlling interest in the entity, or (3) an interest in the entity as a private equity partner. The final bill also creates an additional requirement for the "other health care entities" to indicate if they are a Medicaid provider and, if so, whether they accepted Medicaid recipients during a majority of the past two years.
Lastly, the final bill eliminates the daily fines for past-due reports by physician group practices but retains a $1,000 per day fine for late reports for insurers, third party administrators, and pharmacy benefit managers as well as the existing civil penalty of up to $1,000 per day for hospitals that do not file their annual fiscal report on time.
Taft's Health Care attorneys are here to discuss any questions about the consequences of the legislation for individuals or businesses.
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