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,
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provision adopted), the text of the new provision will appear in this style type. Also, the
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a new provision to the Indiana Code or the Indiana Constitution.
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between statutes enacted by the 2021 Regular Session of the General Assembly.
SENATE ENROLLED ACT No. 298
AN ACT to amend the Indiana Code concerning health.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 16-18-2-226.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 226.2. (a) "Merger", for
purposes of IC 16-21-15, has the meaning set forth in
IC 16-21-15-1.5(a).
(b) "Merger agreement", for purposes of IC 16-21-15, has the
meaning set forth in IC 16-21-15-1.5(b).
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.
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(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.
SECTION 3. IC 16-21-15-1.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 1.5. (a) As used in this
chapter, "merger" means any change of ownership, including:
(1) an acquisition or transfer of assets; or
(2) the purchase of stock effectuated by a merger agreement.
(b) As used in this chapter, "merger agreement" means an
agreement between two (2) or more hospitals for the consolidation
by merger or other acquisition or transfer of assets by which
ownership or control over substantially all of the stock, assets, or
activities of one (1) or more previously licensed and operating
hospitals is placed under the control of another licensed hospital or
other entity that controls hospitals.
SECTION 4. IC 16-21-15-3, AS ADDED BY P.L.104-2021,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 3. (a) Any hospital entering into a merger
agreement with another hospital may submit an application to the state
department for a certificate of public advantage to govern the merger
agreement in the manner prescribed by the state department. However,
a hospital may not submit an application under this chapter after July
1, 2026.
(b) The application for a certificate of public advantage must
include the following:
(1) A written copy of the merger agreement.
(2) A written description of the nature and scope of the merger.
(c) Any documentation submitted under this section with the
application that is deemed to be proprietary information shall be clearly
identified as proprietary information and a copy of the application with
the proprietary information redacted for public records must be
submitted by the applicant.
(d) An applicant must also file a complete copy of the application
for a certificate of public advantage with:
(1) the office of the secretary of family and social services in a
manner prescribed by the office of the secretary; and
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(2) the office of the attorney general in a manner prescribed by the
office of the attorney general.
(e) The state department shall assess a filing fee for an application
for a certificate of public advantage that is reasonably sufficient to fully
fund the costs of the review of the application and ongoing supervision
if the application is granted, including any fees for consultants and
experts. The state department may not spend any money on the
implementation of this chapter until the state department has received
a filed application and received the filing fee.
(f) If the state department incurs costs of the review of the
application and administration of the program that exceed the
application fee collected, the applicant for a certificate of public
advantage shall pay the reasonable charges incurred by the state
department, as determined by the state department.
(g) The reasonable costs of services concerning the program:
(1) include the cost of fees for consultants and experts; and
(2) must be commensurate with the usual compensation for
like services.
SECTION 5. IC 16-21-15-4, AS ADDED BY P.L.104-2021,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 4. (a) The state department, in consultation
with the office of the secretary of family and social services, shall
review an application for a certificate of public advantage and the
documentation filed under section 3 of this chapter to determine
whether there is clear evidence that the proposed merger agreement:
(1) would benefit the population's health outcomes, health care
access, and quality of health care; and
(2) meets the standards described in this section.
(b) The state department shall consider in the review of the
application and documentation the effect of the merger agreement on
the following:
(1) The quality and price of hospital and health care services
provided to Indiana residents, including the demonstration of
population health improvement of the region serviced and the
extent to which medically underserved populations have access
to and are projected to use the proposed services.
(2) The preservation of sufficient health care services within the
geographic area to ensure public access to acute care.
(3) The cost efficiency of services, resources, and equipment
provided or used by the hospitals that are a party to the merger
agreement, including avoidance of duplication of services to
better meet the needs of the community.
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(4) The ability of health care payors to negotiate payments and
service agreements with hospitals proposed to be merged under
the merger agreement.
(5) Employment.
(6) Economic impact.
(c) The state department shall grant the certification if the state
department determines in the review of the application and
documentation that, under the totality of the circumstances, the
following:
(1) There is clear evidence that the proposed merger would
benefit the population's health outcomes, health care access, and
quality of care in the county.
(2) The likely benefits resulting from the proposed merger
agreement outweigh any disadvantages attributable to a potential
reduction in competition that is authorized to may result from the
proposed merger.
The holder of a certificate of public advantage issued by the state
department under this chapter receives immunity from claims of made
pursuant to federal or state antitrust laws for the duration of the
certificate.
(d) The state department has one hundred twenty (120) days from
the filing of the application to review and make a determination on the
application. The state department's determination on whether to grant
the application must:
(1) be in writing;
(2) specify the basis for the determination; and
(3) be provided to the applicant on the date of the determination.
(e) The state department may include terms or conditions of
compliance with the issuance of a certificate of public advantage under
this chapter.
(f) The state department shall maintain records of all of the
applications filed under this chapter, including records of any terms or
conditions of issuing a certificate of public advantage that are imposed
by the state department.
(g) The office of the attorney general may, at any time after an
application is filed under this chapter and before the state department
makes a determination on the application, require by civil investigative
demand the attendance of witnesses and the production of documents
for purposes of investigating whether the merger agreement satisfies
the requirements of this chapter. Any documents produced or testimony
given under this subsection are subject to confidentiality if the
information is deemed proprietary information. The attorney general
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may seek compliance with the issuance of a civil investigative demand
with the appropriate district court of the county in which the merger is
to occur.
SECTION 6. 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
public advantage on the community's health metrics and outcomes,
including any item included in section 4(b) of this chapter.
However, the state department may not enter into an agreement
for more than one (1) study.
(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
related to the certificate of public advantage and 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.
SECTION 7. IC 16-21-15-6, AS ADDED BY P.L.104-2021,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
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UPON PASSAGE]: Sec. 6. (a) The state department shall annually
review a certificate of public advantage issued by the state department
under this chapter.
(b) The holder of a certificate of public advantage shall pay the
reasonable costs incurred by the state department shall require a
reasonably sufficient fee for the renewal of the certification of public
advantage that covers the reasonable costs of the ongoing supervision
of the certification, including any fees for consultants and experts.
(c) In conducting the review, the state department shall consider
whether the hospital continues to meet the standards required for the
issuance of a certificate under this chapter.
(d) This section expires July 1, 2026.
SECTION 8. IC 16-21-15-7, AS ADDED BY P.L.104-2021,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 7. (a) The state department shall actively
supervise and monitor a hospital operating under a certificate of public
advantage issued under this chapter to ensure that the conduct of the
hospital furthers the purposes of this chapter.
(b) The holder of a certificate of public advantage shall pay the
reasonable costs incurred by the state department shall assess an
annual monitoring fee to a hospital issued a certificate of public
advantage under this chapter that covers to cover the reasonable costs
of the ongoing monitoring and supervision of the certification,
including any fees for consultants and experts.
(c) A hospital operating under a certificate of public advantage may
not increase the charge for each individual service the hospital offers
by more than the increase in the preceding year's annual average of the
Consumer Price Index for Medical Care as published by the federal
Bureau of Labor Statistics.
(d) For the first five (5) years that a hospital is operating under a
certificate of public advantage the hospital must:
(1) invest the realized cost savings from the identified efficiencies
and improvements included in the certificate of public advantage
application in the areas of Indiana the hospital serves for the
benefit of the community; and
(2) summarize the realized cost savings and investments in the
hospital's annual report submitted under section 8 of this chapter.
SECTION 9. An emergency is declared for this act.
SEA 298 — Concur President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date: Time:
SEA 298 — Concur