*ES0298.1*
February 10, 2022
ENGROSSED
SENATE BILL No. 298
_____
DIGEST OF SB 298 (Updated February 9, 2022 12:02 pm - DI 77)
Citations Affected: IC 16-18; IC 16-21.
Synopsis: Certificates of public advantage. Defines "merger" and
"merger agreement" for purposes of the certificate of public advantage
(certificate) for certain hospital mergers. Requires the state department
of health (state department) to actively supervise a merger. Allows the
state department to enter into an agreement with a nonprofit
organization or a postsecondary educational institution to study the
impacts of the certificate of public advantage on the community's
health metrics and outcomes. Requires holders of a certificate to pay
for reasonable charges incurred by the state department.
Effective: Upon passage.
Charbonneau, Ford Jon
(HOUSE SPONSORS — MORRISON, BA RRETT)
January 10, 2022, read first time and referred to Committee on Health and Provider
Services.
January 12, 2022, amended, reported favorably — Do Pass.
January 18, 2022, read second time, ordered engrossed. Engrossed.
January 20, 2022, read third time, passed. Yeas 46, nays 0.
HOUSE ACTION
February 1, 2022, read first time and referred to Committee on Public Health.
February 10, 2022, amended, reported — Do Pass.
ES 298—LS 6529/DI 104 February 10, 2022
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.
ENGROSSED
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 16-21-15-1.5 IS ADDED TO THE INDIANA
9 CODE AS A NEW SECTION TO READ AS FOLLOWS
10 [EFFECTIVE UPON PASSAGE]: Sec. 1.5. (a) As used in this
11 chapter, "merger" means any change of ownership, including:
12 (1) an acquisition or transfer of assets; or
13 (2) the purchase of stock effectuated by a merger agreement.
14 (b) As used in this chapter, "merger agreement" means an
15 agreement between two (2) or more hospitals for the consolidation
16 by merger or other acquisition or transfer of assets by which
17 ownership or control over substantially all of the stock, assets, or
ES 298—LS 6529/DI 104 2
1 activities of one (1) or more previously licensed and operating
2 hospitals is placed under the control of another licensed hospital or
3 other entity that controls hospitals.
4 SECTION 3. IC 16-21-15-3, AS ADDED BY P.L.104-2021,
5 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
6 UPON PASSAGE]: Sec. 3. (a) Any hospital entering into a merger
7 agreement with another hospital may submit an application to the state
8 department for a certificate of public advantage to govern the merger
9 agreement in the manner prescribed by the state department. However,
10 a hospital may not submit an application under this chapter after July
11 1, 2026.
12 (b) The application for a certificate of public advantage must
13 include the following:
14 (1) A written copy of the merger agreement.
15 (2) A written description of the nature and scope of the merger.
16 (c) Any documentation submitted under this section with the
17 application that is deemed to be proprietary information shall be clearly
18 identified as proprietary information and a copy of the application with
19 the proprietary information redacted for public records must be
20 submitted by the applicant.
21 (d) An applicant must also file a complete copy of the application
22 for a certificate of public advantage with:
23 (1) the office of the secretary of family and social services in a
24 manner prescribed by the office of the secretary; and
25 (2) the office of the attorney general in a manner prescribed by the
26 office of the attorney general.
27 (e) The state department shall assess a filing fee for an application
28 for a certificate of public advantage that is reasonably sufficient to fully
29 fund the costs of the review of the application and ongoing supervision
30 if the application is granted, including any fees for consultants and
31 experts. The state department may not spend any money on the
32 implementation of this chapter until the state department has received
33 a filed application and received the filing fee.
34 (f) If the state department incurs costs of the review of the
35 application and administration of the program that exceed the
36 application fee collected, the applicant for a certificate of public
37 advantage shall pay the reasonable charges incurred by the state
38 department, as determined by the state department.
39 (g) The reasonable costs of services concerning the program:
40 (1) include the cost of fees for consultants and experts; and
41 (2) must be commensurate with the usual compensation for
42 like services.
ES 298—LS 6529/DI 104 3
1 SECTION 4. IC 16-21-15-4, AS ADDED BY P.L.104-2021,
2 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 UPON PASSAGE]: Sec. 4. (a) The state department, in consultation
4 with the office of the secretary of family and social services, shall
5 review an application for a certificate of public advantage and the
6 documentation filed under section 3 of this chapter to determine
7 whether there is clear evidence that the proposed merger agreement:
8 (1) would benefit the population's health outcomes, health care
9 access, and quality of health care; and
10 (2) meets the standards described in this section.
11 (b) The state department shall consider in the review of the
12 application and documentation the effect of the merger agreement on
13 the following:
14 (1) The quality and price of hospital and health care services
15 provided to Indiana residents, including the demonstration of
16 population health improvement of the region serviced and the
17 extent to which medically underserved populations have access
18 to and are projected to use the proposed services.
19 (2) The preservation of sufficient health care services within the
20 geographic area to ensure public access to acute care.
21 (3) The cost efficiency of services, resources, and equipment
22 provided or used by the hospitals that are a party to the merger
23 agreement, including avoidance of duplication of services to
24 better meet the needs of the community.
25 (4) The ability of health care payors to negotiate payments and
26 service agreements with hospitals proposed to be merged under
27 the merger agreement.
28 (5) Employment.
29 (6) Economic impact.
30 (c) The state department shall grant the certification if the state
31 department determines in the review of the application and
32 documentation that, under the totality of the circumstances, the
33 following:
34 (1) There is clear evidence that the proposed merger would
35 benefit the population's health outcomes, health care access, and
36 quality of care in the county.
37 (2) The likely benefits resulting from the proposed merger
38 agreement outweigh any disadvantages attributable to a potential
39 reduction in competition that is authorized to may result from the
40 proposed merger.
41 The holder of a certificate of public advantage issued by the state
42 department under this chapter receives immunity from claims of made
ES 298—LS 6529/DI 104 4
1 pursuant to federal or state antitrust laws for the duration of the
2 certificate.
3 (d) The state department has one hundred twenty (120) days from
4 the filing of the application to review and make a determination on the
5 application. The state department's determination on whether to grant
6 the application must:
7 (1) be in writing;
8 (2) specify the basis for the determination; and
9 (3) be provided to the applicant on the date of the determination.
10 (e) The state department may include terms or conditions of
11 compliance with the issuance of a certificate of public advantage under
12 this chapter.
13 (f) The state department shall maintain records of all of the
14 applications filed under this chapter, including records of any terms or
15 conditions of issuing a certificate of public advantage that are imposed
16 by the state department.
17 (g) The office of the attorney general may, at any time after an
18 application is filed under this chapter and before the state department
19 makes a determination on the application, require by civil investigative
20 demand the attendance of witnesses and the production of documents
21 for purposes of investigating whether the merger agreement satisfies
22 the requirements of this chapter. Any documents produced or testimony
23 given under this subsection are subject to confidentiality if the
24 information is deemed proprietary information. The attorney general
25 may seek compliance with the issuance of a civil investigative demand
26 with the appropriate district court of the county in which the merger is
27 to occur.
28 SECTION 5. IC 16-21-15-4.5 IS ADDED TO THE INDIANA
29 CODE AS A NEW SECTION TO READ AS FOLLOWS
30 [EFFECTIVE UPON PASSAGE]: Sec. 4.5. (a) As a part of a
31 certificate of public advantage granted by the state department
32 under this chapter, the state department may enter into an
33 agreement with a nonprofit organization or a postsecondary
34 educational institution to study the impacts of the certificate of
35 public advantage on the community's health metrics and outcomes,
36 including any item included in section 4(b) of this chapter.
37 (b) If a study is entered into under subsection (a) the following
38 requirements must be met:
39 (1) The hospital operating under the certificate of public
40 advantage shall supply data it owns or maintains that is
41 required by the nonprofit organization or a postsecondary
42 educational institution to conduct the study and the data
ES 298—LS 6529/DI 104 5
1 supplied must comply with the requirements under the
2 federal Health Insurance Portability and Accountability Act
3 (HIPAA).
4 (2) The preliminary report must be completed within four (4)
5 years of the certificate of public advantage being granted.
6 (3) A final report must be completed within ten (10) years of
7 the certificate of public advantage being granted.
8 (4) Copies of the preliminary and final report must be
9 distributed to the following:
10 (A) The state department.
11 (B) The general assembly, including members of the
12 interim study committee on public health, behavioral
13 health, and human services in an electronic format under
14 IC 5-14-6.
15 (c) Nothing in this section requires the state department to pay
16 for a study.
17 (d) Nothing in this section requires a hospital operating under
18 the certificate of public advantage to supply data that it does not
19 own or maintain for purposes of a study.
20 SECTION 6. IC 16-21-15-6, AS ADDED BY P.L.104-2021,
21 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
22 UPON PASSAGE]: Sec. 6. (a) The state department shall annually
23 review a certificate of public advantage issued by the state department
24 under this chapter.
25 (b) The holder of a certificate of public advantage shall pay the
26 reasonable costs incurred by the state department shall require a
27 reasonably sufficient fee for the renewal of the certification of public
28 advantage that covers the reasonable costs of the ongoing supervision
29 of the certification, including any fees for consultants and experts.
30 (c) In conducting the review, the state department shall consider
31 whether the hospital continues to meet the standards required for the
32 issuance of a certificate under this chapter.
33 (d) This section expires July 1, 2026.
34 SECTION 7. IC 16-21-15-7, AS ADDED BY P.L.104-2021,
35 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
36 UPON PASSAGE]: Sec. 7. (a) The state department shall actively
37 supervise and monitor a hospital operating under a certificate of public
38 advantage issued under this chapter to ensure that the conduct of the
39 hospital furthers the purposes of this chapter.
40 (b) The holder of a certificate of public advantage shall pay the
41 reasonable costs incurred by the state department shall assess an
42 annual monitoring fee to a hospital issued a certificate of public
ES 298—LS 6529/DI 104 6
1 advantage under this chapter that covers to cover the reasonable costs
2 of the ongoing monitoring and supervision of the certification,
3 including any fees for consultants and experts.
4 (c) A hospital operating under a certificate of public advantage may
5 not increase the charge for each individual service the hospital offers
6 by more than the increase in the preceding year's annual average of the
7 Consumer Price Index for Medical Care as published by the federal
8 Bureau of Labor Statistics.
9 (d) For the first five (5) years that a hospital is operating under a
10 certificate of public advantage the hospital must:
11 (1) invest the realized cost savings from the identified efficiencies
12 and improvements included in the certificate of public advantage
13 application in the areas of Indiana the hospital serves for the
14 benefit of the community; and
15 (2) summarize the realized cost savings and investments in the
16 hospital's annual report submitted under section 8 of this chapter.
17 SECTION 8. An emergency is declared for this act.
ES 298—LS 6529/DI 104 7
COMMITTEE REPORT
Madam President: The Senate Committee on Health and Provider
Services, to which was referred Senate Bill No. 298, has had the same
under consideration and begs leave to report the same back to the
Senate with the recommendation that said bill be AMENDED as
follows:
Page 1, line 12, after "(1)" insert "A hospital merger may benefit
the public by maintaining or improving the quality, efficiency, and
accessibility of health care services offered to the public.
(2) Benefits resulting from a hospital merger may outweigh
any anticompetitive effects of joining together competitors,
including addressing unique challenges in providing health
care services in rural areas.
(3)".
Page 1, line 16, delete "(2)" and insert "(4)".
Page 3, line 13, delete "shall" and insert "must".
and when so amended that said bill do pass.
(Reference is to SB 298 as introduced.)
CHARBONNEAU, Chairperson
Committee Vote: Yeas 11, Nays 0.
_____
COMMITTEE REPORT
Mr. Speaker: Your Committee on Public Health, to which was
referred Senate Bill 298, has had the same under consideration and
begs leave to report the same back to the House with the
recommendation that said bill be amended as follows:
Page 1, delete lines 8 through 17.
Page 2, delete lines 1 through 11.
Page 5, between lines 6 and 7, begin a new paragraph and insert:
"SECTION 5. IC 16-21-15-4.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 4.5. (a) As a part of a
certificate of public advantage granted by the state department
under this chapter, the state department may enter into an
agreement with a nonprofit organization or a postsecondary
educational institution to study the impacts of the certificate of
ES 298—LS 6529/DI 104 8
public advantage on the community's health metrics and outcomes,
including any item included in section 4(b) of this chapter.
(b) If a study is entered into under subsection (a) the following
requirements must be met:
(1) The hospital operating under the certificate of public
advantage shall supply data it owns or maintains that is
required by the nonprofit organization or a postsecondary
educational institution to conduct the study and the data
supplied must comply with the requirements under the
federal Health Insurance Portability and Accountability Act
(HIPAA).
(2) The preliminary report must be completed within four (4)
years of the certificate of public advantage being granted.
(3) A final report must be completed within ten (10) years of
the certificate of public advantage being granted.
(4) Copies of the preliminary and final report must be
distributed to the following:
(A) The state department.
(B) The general assembly, including members of the
interim study committee on public health, behavioral
health, and human services in an electronic format under
IC 5-14-6.
(c) Nothing in this section requires the state department to pay
for a study.
(d) Nothing in this section requires a hospital operating under
the certificate of public advantage to supply data that it does not
own or maintain for purposes of a study.".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to SB 298 as printed January 13, 2022.)
BARRETT
Committee Vote: yeas 12, nays 0.
ES 298—LS 6529/DI 104