Indiana Joins States Focusing On Consolidation Of Health Care – Healthcare

On March 13, 2024, Indiana joined the ranks of states exercising
greater oversight and regulation of health care transactions.
Senate Enrolled Act No. 9 (S.B. 9), which takes effect on July 1, 2024,
requires written notice to the Indiana Attorney General (the AG) 90
days in advance of an acquisition or merger involving an Indiana
“health care entity” that results in a change of control.
The law does not grant the AG authority to approve or deny a
transaction, but the AG may evaluate any antitrust concerns and
issue a civil investigative demand for additional information.

Health Care Entities and Transactions Subject to S.B. 9

S.B. 9 defines a “health care entity” to mean any of
the following:

• An organization or business that provides diagnostic, medical,
  surgical, dental, or rehabilitative care;




• An insurer that issues a policy of accident and sickness
  insurance (with certain exceptions);




• A health maintenance organization;




• A pharmacy benefit manager;




• An administrator; and




• A private equity partnership, regardless of where located,
  seeking to enter into a merger or acquisition with any of the
  foregoing entities.

Under the law, an “acquisition” means any agreement,
arrangement or activity which results in a person acquiring,
directly or indirectly, the control of another person, and a
“merger” means any change of ownership, including an
acquisition or transfer of assets and the purchase of stock
effectuated by a merger agreement. An Indiana health care entity
involved in an acquisition or merger with another health care
entity with total assets, including combined entities and holdings,
of at least $10 million is required to provide the notice.

Notice of Proposed Transaction

S.B. 9 requires that notice to the AG include the following
information from each health care entity to the transaction:

• Business address and federal tax number;




• Name and contact information of a representative of the health
  care entity;




• Description of the health care entity;




• Description of the merger or acquisition, including the
  anticipated timeline; and




• A copy of any materials that have been submitted to a federal
  or state agency concerning the merger or acquisition.

The AG is required to keep nonpublic information confidential
and the information will not be released to the public.

Review of Transaction

Within 45 days from submission of notice of a transaction, the
AG shall review the information and may prepare a written analysis
of any antitrust concerns. The AG is required to provide any
written analysis to the health care entity that submitted the
notice and may also issue a civil investigative demand for
additional information.

What’s Next

Similar to other state health care transaction review laws previously discussed in this blog, S.B. 9 is
another example of a state taking a closer look at health care
transactions that previously would not have been subject to review.
As the scope of state legislation over health care transactions
continues to expand, parties are faced with navigating processes
and requirements that are not always clear and could raise more
questions than answers. S.B. 9, for example, lacks details
(especially whether a health care entity with total assets of $10
million means Indiana-based assets or assets wherever located),
which hopefully will be addressed in regulations.

Please join us for our Health Care Roundtable Webinar on March 20,
2024 to learn more about what to expect going forward.

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guide to the subject matter. Specialist advice should be sought
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