Introduced Version
SENATE BILL No. 298
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 16-18-2-226.2; IC 16-21-15.
Synopsis: Certificates of public advantage. Defines "merger" and
"merger agreement" for purposes of the certificate of public advantage
(certificate) for certain hospital mergers. Specifies the state's best
interest and intent in the passage of the certificate. Requires the state
department of health (state department) to actively supervise a merger.
Requires holders of a certificate to pay for reasonable charges incurred
by the state department.
Effective: Upon passage.
Charbonneau
January 10, 2022, read first time and referred to Committee on Health and Provider
Services.
2022 IN 298—LS 6529/DI 104 Introduced
Second Regular Session of the 122nd General Assembly (2022)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2021 Regular Session of the General Assembly.
SENATE BILL No. 298
A BILL FOR AN ACT to amend the Indiana Code concerning
health.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 16-18-2-226.2 IS ADDED TO THE INDIANA
2 CODE AS A NEW SECTION TO READ AS FOLLOWS
3 [EFFECTIVE UPON PASSAGE]: Sec. 226.2. (a) "Merger", for
4 purposes of IC 16-21-15, has the meaning set forth in
5 IC 16-21-15-1.5(a).
6 (b) "Merger agreement", for purposes of IC 16-21-15, has the
7 meaning set forth in IC 16-21-15-1.5(b).
8 SECTION 2. IC 16-21-15-0.5 IS ADDED TO THE INDIANA
9 CODE AS A NEW SECTION TO READ AS FOLLOWS
10 [EFFECTIVE UPON PASSAGE]: Sec. 0.5. The general assembly
11 finds the following:
12 (1) It is in the state's best interest to supplant state and federal
13 antitrust law with a process for regulatory approval and
14 active supervision by the state department, as provided in this
15 chapter.
16 (2) It is the intent of the general assembly that this chapter
17 immunize, to the fullest extent possible, the following from all
2022 IN 298—LS 6529/DI 104 2
1 federal and state antitrust laws:
2 (A) The execution of merger agreements approved under
3 this chapter and the transactions concerning the merger.
4 (B) Postmerger activities supervised under this chapter.
5 SECTION 3. IC 16-21-15-1.5 IS ADDED TO THE INDIANA
6 CODE AS A NEW SECTION TO READ AS FOLLOWS
7 [EFFECTIVE UPON PASSAGE]: Sec. 1.5. (a) As used in this
8 chapter, "merger" means any change of ownership, including:
9 (1) an acquisition or transfer of assets; or
10 (2) the purchase of stock effectuated by a merger agreement.
11 (b) As used in this chapter, "merger agreement" means an
12 agreement between two (2) or more hospitals for the consolidation
13 by merger or other acquisition or transfer of assets by which
14 ownership or control over substantially all of the stock, assets, or
15 activities of one (1) or more previously licensed and operating
16 hospitals is placed under the control of another licensed hospital or
17 other entity that controls hospitals.
18 SECTION 4. IC 16-21-15-3, AS ADDED BY P.L.104-2021,
19 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
20 UPON PASSAGE]: Sec. 3. (a) Any hospital entering into a merger
21 agreement with another hospital may submit an application to the state
22 department for a certificate of public advantage to govern the merger
23 agreement in the manner prescribed by the state department. However,
24 a hospital may not submit an application under this chapter after July
25 1, 2026.
26 (b) The application for a certificate of public advantage must
27 include the following:
28 (1) A written copy of the merger agreement.
29 (2) A written description of the nature and scope of the merger.
30 (c) Any documentation submitted under this section with the
31 application that is deemed to be proprietary information shall be clearly
32 identified as proprietary information and a copy of the application with
33 the proprietary information redacted for public records must be
34 submitted by the applicant.
35 (d) An applicant must also file a complete copy of the application
36 for a certificate of public advantage with:
37 (1) the office of the secretary of family and social services in a
38 manner prescribed by the office of the secretary; and
39 (2) the office of the attorney general in a manner prescribed by the
40 office of the attorney general.
41 (e) The state department shall assess a filing fee for an application
42 for a certificate of public advantage that is reasonably sufficient to fully
2022 IN 298—LS 6529/DI 104 3
1 fund the costs of the review of the application and ongoing supervision
2 if the application is granted, including any fees for consultants and
3 experts. The state department may not spend any money on the
4 implementation of this chapter until the state department has received
5 a filed application and received the filing fee.
6 (f) If the state department incurs costs of the review of the
7 application and administration of the program that exceed the
8 application fee collected, the applicant for a certificate of public
9 advantage shall pay the reasonable charges incurred by the state
10 department, as determined by the state department.
11 (g) The reasonable costs of services concerning the program:
12 (1) include the cost of fees for consultants and experts; and
13 (2) shall be commensurate with the usual compensation for
14 like services.
15 SECTION 5. IC 16-21-15-4, AS ADDED BY P.L.104-2021,
16 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 UPON PASSAGE]: Sec. 4. (a) The state department, in consultation
18 with the office of the secretary of family and social services, shall
19 review an application for a certificate of public advantage and the
20 documentation filed under section 3 of this chapter to determine
21 whether there is clear evidence that the proposed merger agreement:
22 (1) would benefit the population's health outcomes, health care
23 access, and quality of health care; and
24 (2) meets the standards described in this section.
25 (b) The state department shall consider in the review of the
26 application and documentation the effect of the merger agreement on
27 the following:
28 (1) The quality and price of hospital and health care services
29 provided to Indiana residents, including the demonstration of
30 population health improvement of the region serviced and the
31 extent to which medically underserved populations have access
32 to and are projected to use the proposed services.
33 (2) The preservation of sufficient health care services within the
34 geographic area to ensure public access to acute care.
35 (3) The cost efficiency of services, resources, and equipment
36 provided or used by the hospitals that are a party to the merger
37 agreement, including avoidance of duplication of services to
38 better meet the needs of the community.
39 (4) The ability of health care payors to negotiate payments and
40 service agreements with hospitals proposed to be merged under
41 the merger agreement.
42 (5) Employment.
2022 IN 298—LS 6529/DI 104 4
1 (6) Economic impact.
2 (c) The state department shall grant the certification if the state
3 department determines in the review of the application and
4 documentation that, under the totality of the circumstances, the
5 following:
6 (1) There is clear evidence that the proposed merger would
7 benefit the population's health outcomes, health care access, and
8 quality of care in the county.
9 (2) The likely benefits resulting from the proposed merger
10 agreement outweigh any disadvantages attributable to a potential
11 reduction in competition that is authorized to may result from the
12 proposed merger.
13 The holder of a certificate of public advantage issued by the state
14 department under this chapter receives immunity from claims of made
15 pursuant to federal or state antitrust laws for the duration of the
16 certificate.
17 (d) The state department has one hundred twenty (120) days from
18 the filing of the application to review and make a determination on the
19 application. The state department's determination on whether to grant
20 the application must:
21 (1) be in writing;
22 (2) specify the basis for the determination; and
23 (3) be provided to the applicant on the date of the determination.
24 (e) The state department may include terms or conditions of
25 compliance with the issuance of a certificate of public advantage under
26 this chapter.
27 (f) The state department shall maintain records of all of the
28 applications filed under this chapter, including records of any terms or
29 conditions of issuing a certificate of public advantage that are imposed
30 by the state department.
31 (g) The office of the attorney general may, at any time after an
32 application is filed under this chapter and before the state department
33 makes a determination on the application, require by civil investigative
34 demand the attendance of witnesses and the production of documents
35 for purposes of investigating whether the merger agreement satisfies
36 the requirements of this chapter. Any documents produced or testimony
37 given under this subsection are subject to confidentiality if the
38 information is deemed proprietary information. The attorney general
39 may seek compliance with the issuance of a civil investigative demand
40 with the appropriate district court of the county in which the merger is
41 to occur.
42 SECTION 6. IC 16-21-15-6, AS ADDED BY P.L.104-2021,
2022 IN 298—LS 6529/DI 104 5
1 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2 UPON PASSAGE]: Sec. 6. (a) The state department shall annually
3 review a certificate of public advantage issued by the state department
4 under this chapter.
5 (b) The holder of a certificate of public advantage shall pay the
6 reasonable costs incurred by the state department shall require a
7 reasonably sufficient fee for the renewal of the certification of public
8 advantage that covers the reasonable costs of the ongoing supervision
9 of the certification, including any fees for consultants and experts.
10 (c) In conducting the review, the state department shall consider
11 whether the hospital continues to meet the standards required for the
12 issuance of a certificate under this chapter.
13 (d) This section expires July 1, 2026.
14 SECTION 7. IC 16-21-15-7, AS ADDED BY P.L.104-2021,
15 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
16 UPON PASSAGE]: Sec. 7. (a) The state department shall actively
17 supervise and monitor a hospital operating under a certificate of public
18 advantage issued under this chapter to ensure that the conduct of the
19 hospital furthers the purposes of this chapter.
20 (b) The holder of a certificate of public advantage shall pay the
21 reasonable costs incurred by the state department shall assess an
22 annual monitoring fee to a hospital issued a certificate of public
23 advantage under this chapter that covers to cover the reasonable costs
24 of the ongoing monitoring and supervision of the certification,
25 including any fees for consultants and experts.
26 (c) A hospital operating under a certificate of public advantage may
27 not increase the charge for each individual service the hospital offers
28 by more than the increase in the preceding year's annual average of the
29 Consumer Price Index for Medical Care as published by the federal
30 Bureau of Labor Statistics.
31 (d) For the first five (5) years that a hospital is operating under a
32 certificate of public advantage the hospital must:
33 (1) invest the realized cost savings from the identified efficiencies
34 and improvements included in the certificate of public advantage
35 application in the areas of Indiana the hospital serves for the
36 benefit of the community; and
37 (2) summarize the realized cost savings and investments in the
38 hospital's annual report submitted under section 8 of this chapter.
39 SECTION 8. An emergency is declared for this act.
2022 IN 298—LS 6529/DI 104