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Minnesota House OKs bill complicating Sanford, Fairview merger

The proposed merger between Sioux Falls, S.D.-based Sanford Health and Minneapolis-based Fairview Health Services has been controversial in Minnesota. As the combination is reviewed by Keith Ellison, the state's attorney general, the House has passed a bill that could shake things up. 

On May 8, the House passed HF 402. The "multi-pronged" approach proposed by the bill aims to protect Minnesotans during mergers, consolidations and transactions involving health systems, according to Rep. Robert Bierman, its chief author. 

Minnesota already has a thorough review process for healthcare mergers: Sanford and Fairview have pushed their closing date back twice as state, university and health system leaders work toward agreement. 

The new bill — which currently sits in a Senate committee — would expand the attorney general's existing oversight. It establishes requirements for timely notifications of transactions, prohibits transactions that would substantially lower competition and better defines transactions that support public interest. 

However, some measures appear to target Sanford and Fairview's combination. 

The bill specifies that the Minneapolis-based University of Minnesota's healthcare facilities can not be owned or controlled by a for-profit or out-of-state entity unless the attorney general decides it is in the public interest. Fairview currently owns the University hospital, and the oversight of a state facility by South-Dakota-based Sanford has been a point of contention throughout negotiations. 

Plus, the bill requires a health system that is organized as a charitable organization and sells or transfers control out of state to return any charitable assets received from the government. 

Sanford and Fairview remain confident in their vision for the merger, the health systems told Becker's in a joint statement. 

"We continue to engage in a robust and thoughtful public dialogue with our people, stakeholders in our communities, regulators, elected officials and with the University of Minnesota about our plans to combine our organizations," the entities said. "Since December of last year, our priority has been continued cooperation to support the existing and robust review that is already in place by the attorney general." 

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