HB2747 - Relating to requiring certain health care entities to submit notice of material change transactions to the attorney general and the attorney general's authority to conduct certain related studies; imposing civil and administrative penalties.

  89R24435 SRA-F     By: Frank H.B. No. 2747     Substitute the following for H.B. No. 2747:     By:  VanDeaver C.S.H.B. No. 2747       A BILL TO BE ENTITLED   AN ACT   relating to requiring certain health care entities to submit notice   of material change transactions to the attorney general and the   attorney general's authority to conduct certain related studies;   imposing civil and administrative penalties.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Health care patients and consumers benefit when   there are robust markets for goods and services, in which providers   of coverage and care compete to offer higher quality care and better   prices.  Consolidation in health care markets has reduced   competition and driven up prices. The purpose of this Act is to   promote competitive markets by strengthening the state's ability to   enforce laws and prevent anticompetitive behavior.          SECTION 2.  Title 2, Business & Commerce Code, is amended by   adding Chapter 15A to read as follows:   CHAPTER 15A. MATERIAL CHANGE TRANSACTIONS INVOLVING HEALTH CARE   ENTITIES   SUBCHAPTER A. GENERAL PROVISIONS           Sec. 15A.0001.  DEFINITIONS. In this chapter:                 (1)     "Attorney general" and "person" have the meanings   assigned by Section 15.03.                 (2)     "Health care entity" means a health care provider,   health care facility, provider organization, pharmacy benefit   manager, or health carrier that offers a health benefit plan in this   state.                 (3)     "Health care facility" means the following   facilities licensed or otherwise authorized to provide health care   services in this state:                       (A)     a hospital or other inpatient facility for   providing health care services;                       (B)     a health system consisting of jointly owned   or managed health care entities;                       (C)     a skilled nursing facility licensed under   Chapter 242, Health and Safety Code;                       (D)     an ambulatory surgical center licensed under   Chapter 243, Health and Safety Code;                       (E)     a freestanding emergency medical care   facility licensed under Chapter 254, Health and Safety Code;                       (F)     a general residential operation licensed   under Chapter 42, Human Resources Code, that provides treatment   services;                       (G)  a diagnostic, laboratory, or imaging center;                       (H)     an outpatient clinic licensed in this state   to provide health care services; or                       (I)     a rehabilitation center or other therapeutic   center licensed in this state to provide health care services.                 (4)     "Health care provider" means an individual   licensed or otherwise authorized to perform or provide health care   services in this state.                 (5)  "Health care services" means:                       (A)     services provided for the care, prevention,   diagnosis, treatment, cure, or relief of a medical, dental, or   behavioral health condition, including:                             (i)     inpatient, outpatient, habilitative,   rehabilitative, dental, palliative, therapeutic, supportive, home   health, or behavioral services provided by a health care entity;                             (ii)     retail and specialty pharmacy   services, including drugs, devices, and medical supplies provided   by a pharmacy; and                             (iii)     performance of functions to refer,   arrange, or coordinate health care services;                       (B)     equipment used to provide services described   by Paragraph (A), including durable medical equipment and   diagnostic, infusion, and surgical devices; and                       (C)     technology associated with the provision of   services and equipment described by Paragraphs (A) and (B),   including telehealth services, telemedicine medical services,   electronic health records, software, claims processors, and   utilization systems.                 (6)     "Health carrier" has the meaning assigned by   Section 1507.002, Insurance Code.                 (7)     "Management services organization" means an   organization or entity that contracts with a health care provider   or provider organization to perform management or administrative   services relating to, supporting, or facilitating the provision of   health care services.                 (8)     "Material change transaction" means a transaction   that entails a material change to ownership, operations, or   governance structure of a legal entity.                 (9)     "Pharmacy benefit manager" has the meaning   assigned by Section 4151.151, Insurance Code.                 (10)     "Provider organization" means an incorporated or   unincorporated corporation, partnership, business trust,   association, or organized group of persons that is in the business   of health care service delivery or management and that represents   at least one health care provider in contracting with a health   carrier for the payment of health care services.   The term includes   a physician organization, physician-hospital organization,   independent practice association, provider network, accountable   care organization, management services organization, or other   organization that contracts with a health carrier for the payment   of health care services.           Sec.   15A.0002.     APPLICABILITY OF CHAPTER TO MATERIAL CHANGE   TRANSACTIONS; EXCEPTIONS.     (a)   This chapter applies only with   respect to the following material change transactions occurring in   this state, whether occurring as a single transaction or a series of   related transactions within a consecutive 12-month period:                 (1)     a merger that includes one or more health care   entities;                 (2)     a sale or other acquisition, including by lease,   transfer, exchange, option, receipt through conveyance, and   creation of a joint venture, of:                       (A)     one or more health care entities, including   insolvent health care entities; or                       (B)     a material amount of the assets or operations   relevant to the ownership or control of one or more health care   entities;                 (3)     a contract or other arrangement, including an   association, partnership, or joint venture, that results in a   person acquiring direct or indirect control over all or a   substantial part of a health care entity's operations or   governance;                 (4)     the formation of a partnership, joint venture,   accountable care organization, parent organization, or management   services organization for the purpose of administering contracts   with health carriers, third-party administrators, pharmacy benefit   managers, or health care providers;                 (5)     the sale, purchase, lease, affiliation, or   transfer of control of a health care entity's board of directors or   other governing body; or                 (6)     a real estate sale or lease agreement involving a   material amount of health care entity assets, if another party to   the sale or agreement is, or will be as a result of the sale or   agreement:                       (A)     an affiliate of or affiliated with the health   care entity; or                       (B)     directly or indirectly, in control of,   controlled by, or under common control with the health care entity.           (b)     This chapter does not apply to or with respect to the   following:                 (1)     a clinical affiliation of health care entities   formed solely to collaborate on clinical trials;                 (2)  a graduate medical education program;                 (3)     an offer of employment to, or the hiring of, not   more than one physician; or                 (4)     a material change transaction in which the gross   annual revenue of the health care entity party to the transaction   with the largest gross annual revenue was less than $5 million in   the preceding year.           Sec.   15A.0003.     CONFIDENTIALITY OF CERTAIN INFORMATION. (a)     All documents and other information provided to the attorney   general under this chapter, including the notice required under   Section 15A.0051, are not public information under Chapter 552,   Government Code, and may not be released or made public on subpoena   or otherwise except as provided by this section.           (b)     The attorney general may release documents or   information:                 (1)     with the consent of the entity that submitted the   information; or                 (2)     to an expert or consultant under contract with the   attorney general solely for the purpose of conducting or aiding in   the creation of a study under Section 15A.0101, provided that the   expert or consultant is bound by the same confidentiality   requirements as the attorney general.   SUBCHAPTER B. NOTICE OF MATERIAL CHANGE TRANSACTIONS           Sec.   15A.0051.     REQUIRED NOTICE OF PROPOSED MATERIAL CHANGE   TRANSACTIONS. (a)   A health care entity shall submit written notice   to the attorney general of any material change transaction   involving the entity not later than the 90th day before the date the   change is to take effect.           (b)     The attorney general by rule shall prescribe the method   and form of the written notice required under this section.           Sec.   15A.0052.     CIVIL PENALTY; INJUNCTION.   (a)   A person who   violates Section 15A.0051 is liable to this state for a civil   penalty in an amount not to exceed $10,000 for each violation.           [Text truncated for display. Full text available on Congress.gov.]