On February 12, 2025, the Texas Home of Representatives (“Home”) launched Home Invoice 2747 (“H.B. 2747”), which might require entities to report sure well being care transactions to the Texas Legal professional Normal (“AG”). If handed, H.B. 2747 would go into impact on September 1, 2025, including Texas to the rising record of states exercising elevated oversight over well being care transactions.
H.B. 2747 – Background and Discover Necessities
H.B. 2747 would implement a 90-day advance discover requirement for any well being care transaction that ends in a cloth change. H.B. 2747 defines a “materials change transaction” as “a transaction that entails a cloth change to the possession, operations or governance of a well being care entity.” Particularly, the next sorts of materials change transactions require written discover:
- A merger that features a number of well being care entities;
- A sale or different acquisition of a number of well being care entities or a cloth quantity of the belongings or operations of a number of well being care entities;
- A contract or different association that ends in an individual buying direct or oblique management over all or a considerable a part of the well being care entity’s operations or governance;
- The formation of a partnership, three way partnership, accountable care group, guardian group or administration providers group for the aim of administering contracts with well being carriers, third-party directors, pharmacy profit managers or well being care suppliers;
- The sale, buy, lease, affiliation or switch of management of a well being care entity’s board of administrators or different governing physique; or
- An actual property sale or lease settlement involving a cloth quantity of well being care entity belongings.
H.B. 2747’s reporting requirement applies to an expansive number of “well being care entities” partaking in materials change transactions, together with:
- Well being care suppliers (outlined as “a person holding Texas licenses or {qualifications} to supply well being care providers on this state”);
- Well being care services (outlined to incorporate all services licensed to supply well being care providers, together with hospitals, well being programs, nursing services, ambulatory surgical facilities, emergency care services, imaging facilities, outpatient clinics and therapeutic facilities);
- Supplier organizations (outlined to incorporate teams of individuals within the enterprise of well being care providers together with administration providers organizations, physician-hospital organizations, unbiased follow associations, supplier networks and accountable care organizations); and
- Pharmacy profit managers.
H.B. 2747 would additionally prolong to the Texas AG the ability to conduct market research on the circumstances of a well being care market throughout the state and the impacts of accomplished materials change transactions on a market. This would come with an evaluation of the diploma of well being care entity possession or different focus, the power of aggressive forces on costs and high quality of well being care providers and tendencies within the worth, high quality and availability of well being care providers.
Rising Pattern
A rising variety of states are implementing well being care transaction rules, increasing oversight of mergers, acquisitions and different offers, with various necessities for discover, evaluate and approval. Whereas every state cites various coverage priorities, a standard emphasis on addressing competitors, market focus and entry to high quality care has emerged. The map beneath signifies which states have both pending laws or necessities for discover, evaluate and/or approval of well being care transactions.
Sensible Takeaways
- H.B. 2747 doesn’t particularly prescribe the contents of the discover to be offered, as a substitute permitting the Texas AG to find out the content material of the discover by rule.
- H.B. 2747 comprises confidentiality necessities that defend all paperwork and different info offered to the Texas AG in reference to the notification requirement.
- If H.B. 2747 passes, well being care offers and investments could also be delayed whereas prices and authorities scrutiny would probably enhance. Because of this, well being care organizations (significantly these backed by non-public fairness) ought to regulate additional developments of this proposed laws and interact authorized counsel for evaluate of pending transactions.
Failure to supply discover pursuant to H.B. 2747 might lead to a civil penalty of $10,000 per violation.
Corridor Render’s well being transactions staff continues to watch well being care transaction reporting necessities throughout the nation. In case your well being care group is contemplating extra M&A exercise, please contact:
Corridor Render weblog posts and articles are meant for informational functions solely. For moral causes, Corridor Render attorneys can’t—exterior of an attorney-client relationship—reply particular questions that may be authorized recommendation.
