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5 states reviewing healthcare M&A oversight

A number of states have attempted to pass laws recently to potentially curb what legislators say is inappropriate consolidation in the healthcare industry. Other states have pushed back on such legislation.

The moves come as federal regulators are also pursuing greater oversight on proposed healthcare transactions.

Here is a roundup of such recent attempts to alter the M&A landscape at a state level rather than a federal one:

New legislation in the state is likely to "impact a large portion of healthcare-related transactions within Illinois going forward," Lexology reported May 30. The bill has passed both state bodies.

The legislation, which would become effective Jan. 1, 2024, would deal with transactions where an out-of-state entity would generate more than $10 million in annual revenue from local patients. The Illinois attorney general would have advance notice of at least 30 days for relevant transactions and can also ask for further information within that time, extending the waiting period.

Similar extra notice for the attorney general is being sought in Pennsylvania, where a number of bills targeting alleged anticompetitive behavior are being resuscitated. Other healthcare bills include one designed to bar for-profit hospitals and one targeting a minimum severance in the case of mass layoffs.

Minnesota Gov. Tim Walz signed into law May 26 legislation which would also extend the oversight of the attorney general in that state regarding healthcare mergers and acquisitions. The legislation comes as the proposed merger between Sioux Falls, S.D.-based Sanford Health and Minneapolis-based Fairview Health Services is facing opposition and delays.

In Washington, SB5421, or the Keep Our Care Act, which passed into law April 6 and becomes effective July 23, would also allow the state's attorney general to publicly review proposed healthcare mergers and acquisitions. The legislation comes at a time when some healthcare systems are placing restrictions on certain types of care, such as reproductive and end-of-life services.

Some North Carolina legislators also tried to resuscitate a previously shelved bill seeking to install greater state oversight over proposed healthcare M&A. The attorney general in that state, Josh Stein, had expressed frustration over what he sees as limited transparency with such transactions, especially the relative lack of accountability regarding possible impacts on local communities.

The bill was shelved again May 23. The Federal Trade Commission has also intervened in North Carolina over a proposed bill that aims to prevent antitrust officials from challenging the University of North Carolina Health Care System for engaging in anticompetitive mergers and conduct.

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