*ES0298.2*
Reprinted
February 23, 2022
ENGROSSED
SENATE BILL No. 298
_____
DIGEST OF SB 298 (Updated February 22, 2022 5:16 pm - DI 104)
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, BARRETT, FLEMING)
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.
February 22, 2022, read second time, amended, ordered engrossed.
ES 298—LS 6529/DI 104 Reprinted
February 23, 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 16-21-15-0.5 IS ADDED TO THE INDIANA
9 CODE AS A NEW SECTION TO READ AS FOLLOWS
10 [EFFECTIVE UPON PASSAGE]: Sec. 0.5. (a) The general assembly
11 finds the following as it relates only to section 1 of this chapter:
12 (1) A hospital merger may benefit the public by maintaining
13 or improving the quality, efficiency, and accessibility of health
14 care services offered to the public.
15 (2) Benefits resulting from a hospital merger may outweigh
16 any anticompetitive effects of joining together competitors,
17 including addressing unique challenges in providing health
ES 298—LS 6529/DI 104 2
1 care services in rural areas.
2 (3) It is in the state's best interest to supplant state and federal
3 antitrust law with a process for regulatory approval and
4 active supervision by the state department, as provided in this
5 chapter.
6 (4) It is the intent of the general assembly that this chapter
7 immunize, to the fullest extent possible, the following from all
8 federal and state antitrust laws:
9 (A) The execution of merger agreements approved under
10 this chapter and the transactions concerning the merger.
11 (B) Postmerger activities supervised under this chapter.
12 (b) This section applies only to merger agreements allowed
13 under this chapter.
14 SECTION 3. IC 16-21-15-1.5 IS ADDED TO THE INDIANA
15 CODE AS A NEW SECTION TO READ AS FOLLOWS
16 [EFFECTIVE UPON PASSAGE]: Sec. 1.5. (a) As used in this
17 chapter, "merger" means any change of ownership, including:
18 (1) an acquisition or transfer of assets; or
19 (2) the purchase of stock effectuated by a merger agreement.
20 (b) As used in this chapter, "merger agreement" means an
21 agreement between two (2) or more hospitals for the consolidation
22 by merger or other acquisition or transfer of assets by which
23 ownership or control over substantially all of the stock, assets, or
24 activities of one (1) or more previously licensed and operating
25 hospitals is placed under the control of another licensed hospital or
26 other entity that controls hospitals.
27 SECTION 4. IC 16-21-15-3, AS ADDED BY P.L.104-2021,
28 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
29 UPON PASSAGE]: Sec. 3. (a) Any hospital entering into a merger
30 agreement with another hospital may submit an application to the state
31 department for a certificate of public advantage to govern the merger
32 agreement in the manner prescribed by the state department. However,
33 a hospital may not submit an application under this chapter after July
34 1, 2026.
35 (b) The application for a certificate of public advantage must
36 include the following:
37 (1) A written copy of the merger agreement.
38 (2) A written description of the nature and scope of the merger.
39 (c) Any documentation submitted under this section with the
40 application that is deemed to be proprietary information shall be clearly
41 identified as proprietary information and a copy of the application with
42 the proprietary information redacted for public records must be
ES 298—LS 6529/DI 104 3
1 submitted by the applicant.
2 (d) An applicant must also file a complete copy of the application
3 for a certificate of public advantage with:
4 (1) the office of the secretary of family and social services in a
5 manner prescribed by the office of the secretary; and
6 (2) the office of the attorney general in a manner prescribed by the
7 office of the attorney general.
8 (e) The state department shall assess a filing fee for an application
9 for a certificate of public advantage that is reasonably sufficient to fully
10 fund the costs of the review of the application and ongoing supervision
11 if the application is granted, including any fees for consultants and
12 experts. The state department may not spend any money on the
13 implementation of this chapter until the state department has received
14 a filed application and received the filing fee.
15 (f) If the state department incurs costs of the review of the
16 application and administration of the program that exceed the
17 application fee collected, the applicant for a certificate of public
18 advantage shall pay the reasonable charges incurred by the state
19 department, as determined by the state department.
20 (g) The reasonable costs of services concerning the program:
21 (1) include the cost of fees for consultants and experts; and
22 (2) must be commensurate with the usual compensation for
23 like services.
24 SECTION 5. IC 16-21-15-4, AS ADDED BY P.L.104-2021,
25 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
26 UPON PASSAGE]: Sec. 4. (a) The state department, in consultation
27 with the office of the secretary of family and social services, shall
28 review an application for a certificate of public advantage and the
29 documentation filed under section 3 of this chapter to determine
30 whether there is clear evidence that the proposed merger agreement:
31 (1) would benefit the population's health outcomes, health care
32 access, and quality of health care; and
33 (2) meets the standards described in this section.
34 (b) The state department shall consider in the review of the
35 application and documentation the effect of the merger agreement on
36 the following:
37 (1) The quality and price of hospital and health care services
38 provided to Indiana residents, including the demonstration of
39 population health improvement of the region serviced and the
40 extent to which medically underserved populations have access
41 to and are projected to use the proposed services.
42 (2) The preservation of sufficient health care services within the
ES 298—LS 6529/DI 104 4
1 geographic area to ensure public access to acute care.
2 (3) The cost efficiency of services, resources, and equipment
3 provided or used by the hospitals that are a party to the merger
4 agreement, including avoidance of duplication of services to
5 better meet the needs of the community.
6 (4) The ability of health care payors to negotiate payments and
7 service agreements with hospitals proposed to be merged under
8 the merger agreement.
9 (5) Employment.
10 (6) Economic impact.
11 (c) The state department shall grant the certification if the state
12 department determines in the review of the application and
13 documentation that, under the totality of the circumstances, the
14 following:
15 (1) There is clear evidence that the proposed merger would
16 benefit the population's health outcomes, health care access, and
17 quality of care in the county.
18 (2) The likely benefits resulting from the proposed merger
19 agreement outweigh any disadvantages attributable to a potential
20 reduction in competition that is authorized to may result from the
21 proposed merger.
22 The holder of a certificate of public advantage issued by the state
23 department under this chapter receives immunity from claims of made
24 pursuant to federal or state antitrust laws for the duration of the
25 certificate.
26 (d) The state department has one hundred twenty (120) days from
27 the filing of the application to review and make a determination on the
28 application. The state department's determination on whether to grant
29 the application must:
30 (1) be in writing;
31 (2) specify the basis for the determination; and
32 (3) be provided to the applicant on the date of the determination.
33 (e) The state department may include terms or conditions of
34 compliance with the issuance of a certificate of public advantage under
35 this chapter.
36 (f) The state department shall maintain records of all of the
37 applications filed under this chapter, including records of any terms or
38 conditions of issuing a certificate of public advantage that are imposed
39 by the state department.
40 (g) The office of the attorney general may, at any time after an
41 application is filed under this chapter and before the state department
42 makes a determination on the application, require by civil investigative
ES 298—LS 6529/DI 104 5
1 demand the attendance of witnesses and the production of documents
2 for purposes of investigating whether the merger agreement satisfies
3 the requirements of this chapter. Any documents produced or testimony
4 given under this subsection are subject to confidentiality if the
5 information is deemed proprietary information. The attorney general
6 may seek compliance with the issuance of a civil investigative demand
7 with the appropriate district court of the county in which the merger is
8 to occur.
9 SECTION 6. IC 16-21-15-4.5 IS ADDED TO THE INDIANA
10 CODE AS A NEW SECTION TO READ AS FOLLOWS
11 [EFFECTIVE UPON PASSAGE]: Sec. 4.5. (a) As a part of a
12 certificate of public advantage granted by the state department
13 under this chapter, the state department may enter into an
14 agreement with a nonprofit organization or a postsecondary
15 educational institution to study the impacts of the certificate of
16 public advantage on the community's health metrics and outcomes,
17 including any item included in section 4(b) of this chapter.
18 However, the state department may not enter into an agreement
19 for more than one (1) study.
20 (b) If a study is entered into under subsection (a) the following
21 requirements must be met:
22 (1) The hospital operating under the certificate of public
23 advantage shall supply data it owns or maintains that is
24 related to the certificate of public advantage and that is
25 required by the nonprofit organization or a postsecondary
26 educational institution to conduct the study and the data
27 supplied must comply with the requirements under the
28 federal Health Insurance Portability and Accountability Act
29 (HIPAA).
30 (2) The preliminary report must be completed within four (4)
31 years of the certificate of public advantage being granted.
32 (3) A final report must be completed within ten (10) years of
33 the certificate of public advantage being granted.
34 (4) Copies of the preliminary and final report must be
35 distributed to the following:
36 (A) The state department.
37 (B) The general assembly, including members of the
38 interim study committee on public health, behavioral
39 health, and human services in an electronic format under
40 IC 5-14-6.
41 (c) Nothing in this section requires the state department to pay
42 for a study.
ES 298—LS 6529/DI 104 6
1 (d) Nothing in this section requires a hospital operating under
2 the certificate of public advantage to supply data that it does not
3 own or maintain for purposes of a study.
4 SECTION 7. IC 16-21-15-6, AS ADDED BY P.L.104-2021,
5 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
6 UPON PASSAGE]: Sec. 6. (a) The state department shall annually
7 review a certificate of public advantage issued by the state department
8 under this chapter.
9 (b) The holder of a certificate of public advantage shall pay the
10 reasonable costs incurred by the state department shall require a
11 reasonably sufficient fee for the renewal of the certification of public
12 advantage that covers the reasonable costs of the ongoing supervision
13 of the certification, including any fees for consultants and experts.
14 (c) In conducting the review, the state department shall consider
15 whether the hospital continues to meet the standards required for the
16 issuance of a certificate under this chapter.
17 (d) This section expires July 1, 2026.
18 SECTION 8. IC 16-21-15-7, AS ADDED BY P.L.104-2021,
19 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
20 UPON PASSAGE]: Sec. 7. (a) The state department shall actively
21 supervise and monitor a hospital operating under a certificate of public
22 advantage issued under this chapter to ensure that the conduct of the
23 hospital furthers the purposes of this chapter.
24 (b) The holder of a certificate of public advantage shall pay the
25 reasonable costs incurred by the state department shall assess an
26 annual monitoring fee to a hospital issued a certificate of public
27 advantage under this chapter that covers to cover the reasonable costs
28 of the ongoing monitoring and supervision of the certification,
29 including any fees for consultants and experts.
30 (c) A hospital operating under a certificate of public advantage may
31 not increase the charge for each individual service the hospital offers
32 by more than the increase in the preceding year's annual average of the
33 Consumer Price Index for Medical Care as published by the federal
34 Bureau of Labor Statistics.
35 (d) For the first five (5) years that a hospital is operating under a
36 certificate of public advantage the hospital must:
37 (1) invest the realized cost savings from the identified efficiencies
38 and improvements included in the certificate of public advantage
39 application in the areas of Indiana the hospital serves for the
40 benefit of the community; and
41 (2) summarize the realized cost savings and investments in the
42 hospital's annual report submitted under section 8 of this chapter.
ES 298—LS 6529/DI 104 7
1 SECTION 9. An emergency is declared for this act.
ES 298—LS 6529/DI 104 8
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 9
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.
_____
HOUSE MOTION
Mr. Speaker: I move that Engrossed Senate Bill 298 be amended to
read as follows:
Page 1, between lines 7 and 8, begin a new paragraph and insert:
ES 298—LS 6529/DI 104 10
"SECTION 2. IC 16-21-15-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.5. (a) The general assembly
finds the following as it relates only to section 1 of this chapter:
(1) 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) It is in the state's best interest to supplant state and federal
antitrust law with a process for regulatory approval and
active supervision by the state department, as provided in this
chapter.
(4) It is the intent of the general assembly that this chapter
immunize, to the fullest extent possible, the following from all
federal and state antitrust laws:
(A) The execution of merger agreements approved under
this chapter and the transactions concerning the merger.
(B) Postmerger activities supervised under this chapter.
(b) This section applies only to merger agreements allowed
under this chapter.".
Page 4, line 36, after "chapter." insert "However, the state
department may not enter into an agreement for more than one (1)
study.".
Page 4, line 40, after "maintains" insert "that is related to the
certificate of public advantage and".
Renumber all SECTIONS consecutively.
(Reference is to ESB 298 as printed February 10, 2022.)
MORRISON
ES 298—LS 6529/DI 104