Florida Senate - 2021 SB 1064 By Senator Brodeur 9-00987-21 20211064__ 1 A bill to be entitled 2 An act relating to hospital, hospital system, or 3 provider organization transactions; creating s. 4 542.275, F.S.; defining terms; requiring certain 5 entities to submit written notice of a specified 6 filing to the Office of the Attorney General relating 7 to certain hospital, hospital system, or provider 8 organization mergers, acquisitions, and other 9 transactions within a specified timeframe; requiring 10 that such entities submit written notice of a material 11 change to the office within a specified timeframe; 12 providing requirements for such notice; authorizing 13 the office to request additional information or issue 14 a civil investigative demand; requiring the office to 15 submit a biennial report to the Legislature beginning 16 on a specified date; providing a civil penalty; 17 requiring that the penalty be deposited into the Legal 18 Affairs Revolving Trust Fund; authorizing the office 19 to engage the services of certain persons to fulfill 20 its duties; authorizing positions and providing 21 appropriations; providing an effective date. 22 23 Be It Enacted by the Legislature of the State of Florida: 24 25 Section 1. Section 542.275, Florida Statutes, is created to 26 read: 27 542.275 Hospital, hospital system, or provider organization 28 mergers, acquisitions, and other transactions; notice; 29 reporting; penalty.— 30 (1) As used in this section, the term: 31 (a) “Acquisition” means an agreement, arrangement, or 32 activity that results in a hospital, hospital system, or 33 provider organization, directly or indirectly, obtaining control 34 of another hospital, hospital system, or provider organization, 35 including, but not limited to, the acquisition of voting 36 securities and noncorporate interests, such as assets, capital 37 stock, membership interests, or equity interests. 38 (b) “Contracting affiliation” means a relationship between 39 two or more entities wherein the entities have the ability to 40 negotiate jointly with payors over rates for health care 41 services, or one entity negotiates on behalf of the other entity 42 with payors over rates for professional medical services in the 43 primary service area in which the entities operate. The term 44 does not include arrangements among entities under common 45 ownership. 46 (c) “Health care provider” means a physician licensed under 47 chapter 458, chapter 459, chapter 460, or chapter 461 or a 48 person licensed under chapter 463 or a dentist licensed under 49 chapter 466. 50 (d) “Hospital” has the same meaning as provided in s. 51 395.002. 52 (e) “Hospital system” means: 53 1. A corporation that owns one or more hospitals and any 54 entity affiliated with such corporation through ownership or 55 control; or 56 2. A hospital and any entity affiliated with such hospital 57 through ownership. 58 (f) “Material change” means a merger, acquisition, or 59 contracting affiliation that generates a combined revenue of $50 60 million or more between two or more entities of the following 61 types: 62 1. Hospitals; 63 2. Hospital systems; or 64 3. Provider organizations. 65 (g) “Payor” means any entity or person that negotiates or 66 assumes financial responsibility for a defined set of benefits 67 from a health insurance plan or health insurance program. The 68 term includes, but is not limited to, federal, state, and local 69 governmental entities or agencies; affiliates; health insurance 70 companies; health maintenance organizations; insurers; nonprofit 71 religious organizations; persons; preferred provider 72 organizations; prepaid limited health service organizations; and 73 third-party administrators. 74 (h) “Primary service area” means the geographic area 75 measured by the fewest number of zip codes from which the 76 hospital, hospital system, or provider organization draws at 77 least 75 percent of its patients. 78 (i) “Provider organization” means a corporation, a 79 partnership, a business trust, an association, or an organized 80 group of persons, whether incorporated or not, which is in the 81 business of health care services and represents four or more 82 health care providers in contracting with payors for the payment 83 of health care services. The term includes, but is not limited 84 to, physician organizations, physician-hospital organizations, 85 independent practice associations, provider networks, and 86 accountable care organizations. 87 (2)(a) Any hospital, hospital system, or provider 88 organization conducting business in this state which is required 89 to file the Notification and Report Form for Certain Mergers and 90 Acquisitions pursuant to the Hart-Scott-Rodino Antitrust 91 Improvements Act, 15 U.S.C. s. 18a(a), shall provide written 92 notice of such filing to the Office of the Attorney General at 93 the same time that notice is filed with the Federal Government. 94 (b) Except when notice is required pursuant to paragraph 95 (a), at least 90 days before the effective date of any 96 transaction that would result in a material change, the parties 97 to the transaction shall submit written notice to the Office of 98 the Attorney General of such material change. Such written 99 notice must identify all acquisitions that occurred during the 5 100 years preceding the date of the notice. 101 (c) The written notice required under paragraphs (a) and 102 (b) must include all of the following: 103 1. The names of the parties and their current business 104 addresses. 105 2. A description of the proposed relationship among the 106 parties to the proposed transaction. 107 3. A description of the health care services at each 108 location at which services are currently provided and at any 109 locations at which health care services will be provided. 110 4. The primary service area to be served by each location. 111 (d) Any written notice required under this subsection must 112 identify any information that the hospital, hospital system, or 113 provider organization deems a trade secret, as defined in s. 114 688.002, or exempt from public records laws pursuant to any 115 other statutory exemption. 116 (e) Upon receipt of any written notice submitted pursuant 117 to this subsection, the Office of the Attorney General may 118 request additional information or issue a civil investigative 119 demand under s. 542.28. 120 (f) A hospital, hospital system, or provider organization 121 who is a party to a material change may voluntarily provide 122 additional information to the office. 123 (3) Beginning January 1, 2022, the Office of the Attorney 124 General shall submit a biennial report to the President of the 125 Senate and the Speaker of the House of Representatives regarding 126 its review of transactions under this section. 127 (4) A hospital, hospital system, or provider organization 128 that fails to comply with this section is subject to a civil 129 penalty of not more than $500,000, which shall be deposited into 130 the Legal Affairs Revolving Trust Fund created under s. 131 16.53(1). 132 Section 2. In any review authorized under this act, the 133 Office of the Attorney General may engage the services of 134 consultants, experts, accountants, economists, analysts, and 135 other assistants. When the review of a transaction is completed, 136 the reasonable expenses related to such services shall be paid 137 by the parties to the transaction. 138 Section 3. For the 2021-2022 fiscal year, 12 full-time 139 equivalent positions with associated salary rate of 629,382 are 140 authorized and the sums of $1,221,249 in recurring funds and 141 $47,472 in nonrecurring funds from the General Revenue Fund are 142 appropriated to the Department of Legal Affairs for the purpose 143 of implementing s. 542.275, Florida Statutes. 144 Section 4. This act shall take effect July 1, 2021.