HJC/HB 586
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AN ACT
RELATING TO THE PUBLIC PEACE, HEALTH, SAFETY AND WELFARE;
AMENDING THE HEALTH CARE CONSOLIDATION OVERSIGHT ACT TO
REQUIRE REVIEW OF PROPOSED TRANSACTIONS THAT INVOLVE MERGERS,
ACQUISITIONS OR OTHER ACTIONS THAT CHANGE CONTROL OF A
HOSPITAL OR CERTAIN HEALTH CARE PROVIDER ORGANIZATIONS;
BROADENING THE DEFINITION OF "TRANSACTION", OVER WHICH THE
HEALTH CARE AUTHORITY HAS REVIEW AUTHORITY; PROVIDING
WHISTLEBLOWER PROTECTION; PROVIDING FOR ENFORCEMENT OF THE
ACT; PRESCRIBING ADMINISTRATIVE PENALTIES; REPEALING THE
DELAYED REPEAL OF THE ACT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 59A-63-1 NMSA 1978 (being Laws 2024,
Chapter 40, Section 1) is recompiled as Section 24A-9-1 NMSA
1978 and is amended to read:
"24A-9-1. SHORT TITLE.--Chapter 24A, Article 9 NMSA
1978 may be cited as the "Health Care Consolidation Oversight
Act"."
SECTION 2. Section 59A-63-2 NMSA 1978 (being Laws 2024,
Chapter 40, Section 2) is recompiled as Section 24A-9-2 NMSA
1978 and is amended to read:
"24A-9-2. DEFINITIONS.--As used in the Health Care
Consolidation Oversight Act:
A. "acquisition" means the direct or indirect HJC/HB 586
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purchase or other procurement in any manner, including
through a lease, a license, a transfer, an exchange, an
option, a proxy, a conveyance or a joint venture, of all or
substantially all of the assets, equity or operations of a
person;
B. "affiliation" means a business arrangement in
which one person, directly or indirectly, is controlled by,
is under common control with or controls another person;
C. "authority" means the health care authority;
D. "control" means the power to direct or cause
the direction of the management and policies of a hospital,
directly or indirectly, including through the ownership of
voting securities, through licensing, lease or franchise
agreements or by contract other than a commercial contract
for goods or nonmanagement services, unless the power is the
result of a public appointment, general election or corporate
office held by an individual;
E. "essential services" means health care services
covered by the state medicaid program, health care services
that are required to be included in health plans pursuant to
state or federal law and health care services that are
required to be included in qualified health plans offered
through the New Mexico health insurance exchange;
F. "health care provider" means a person
certified, licensed, registered or otherwise authorized under HJC/HB 586
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state law to perform or provide health care services in New
Mexico;
G. "health care provider organization" means a
person that is in the business of delivering or managing the
delivery of health care services, whether incorporated or
not, including physician organizations, physician-hospital
organizations, independent practice associations, provider
networks, accountable care organizations, dental services
organizations and any other organization that contracts with
health insurers for payment for health care services but does
not include hospitals;
H. "health insurer" means a person required to be
licensed or subject to the New Mexico Insurance Code or the
insurance laws of any other state in connection with the
business of health insurance, excluding insurance producers;
I. "hospital" means a hospital licensed by the
authority or its successor health facility licensing agency,
but "hospital" does not include a state university teaching
hospital or a state-owned special hospital;
J. "independent health care practice" means a
health care provider organization entirely owned or
controlled by one or more health care providers who are
individuals and who provide health care services through the
health care provider organization to patients in New Mexico;
K. "management services organization" means a HJC/HB 586
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person that provides all or substantially all of the
administrative or management services under contract with a
hospital, including administering contracts with health
plans, third-party administrators and pharmacy benefit
managers, on behalf of the hospital;
L. "office" means the office of superintendent of
insurance;
M. "party" means a person that is a party to a
transaction subject to the Health Care Consolidation
Oversight Act;
N. "person" means an individual, association,
organization, partnership, firm, syndicate, trust,
corporation or other legal entity;
O. "secretary" means the secretary of health care
authority; and
P. "transaction" means any of the following:
(1) a merger of a hospital in New Mexico
with another hospital or with a person controlling a
hospital;
(2) an acquisition of one or more hospitals
or a person controlling a hospital in New Mexico;
(3) any affiliation or contract or other
agreement that results in a change of control of a hospital
in New Mexico, including with a management services
organization or health insurer; HJC/HB 586
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(4) a formation of a new corporation,
partnership, joint venture, trust, parent organization or
management services organization that results in a change of
control of an existing hospital in New Mexico;
(5) a sale, mortgage, purchase, lease, new
affiliation or other agreement that results in a change of
control of a hospital in New Mexico or the real estate on
which the hospital is located; and
(6) an acquisition of one or more
independent health care practices by a health care provider
organization that is owned or affiliated with a health
insurer."
SECTION 3. Section 59A-63-3 NMSA 1978 (being Laws 2024,
Chapter 40, Section 3) is recompiled as Section 24A-9-3 NMSA
1978 and is amended to read:
"24A-9-3. APPLICABILITY--PROVISIONS ADDITIONAL--CONTROL
PRESUMPTIONS.--
A. The oversight power of the authority pursuant
to the Health Care Consolidation Oversight Act applies to
proposed transactions.
B. Being subject to the Health Care Consolidation
Oversight Act does not preclude or negate any person
regulated pursuant to the Insurance Holding Company Law.
C. Control is presumed to exist if a person,
directly or indirectly, owns, controls, holds fifteen percent HJC/HB 586
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or more of the power to vote or holds proxies representing
fifteen percent or more of the voting securities of any other
person. The presumption may be rebutted by a showing in the
manner provided by Section 59A-37-19 NMSA 1978 that control
does not in fact exist."
SECTION 4. Section 59A-63-4 NMSA 1978 (being Laws 2024,
Chapter 40, Section 4) is recompiled as Section 24A-9-4 NMSA
1978 and is amended to read:
"24A-9-4. CONFIDENTIALITY.--Except for the information
provided pursuant to Paragraphs (2) through (6) of Subsection
E of Section 24A-9-6 NMSA 1978, all documents, materials or
other information in the possession or control of the
authority that are obtained by or disclosed to the authority,
the authority's contracted experts, the attorney general, the
office or any other governmental entity in the course of a
review under the Health Care Consolidation Oversight Act are
confidential."
SECTION 5. Section 59A-63-5 NMSA 1978 (being Laws 2024,
Chapter 40, Section 5) is recompiled as Section 24A-9-5 NMSA
1978 and is amended to read:
"24A-9-5. TIMING OF REVIEW OF NOTICE AND TOLLING.--
A. A notice of a proposed transaction shall be
deemed complete by the authority on the date when all the
information required by the Health Care Consolidation
Oversight Act is submitted by all the parties to the HJC/HB 586
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transaction, as applicable.
B. Within thirty days after the notice of a
proposed transaction is filed, the authority shall notify the
parties in writing if the notice is complete or, if the
notice is incomplete, specify what additional information
must be submitted.
C. Should the scope of the proposed transaction be
significantly modified from that outlined in the initial
notice, the time periods set out in the Health Care
Consolidation Oversight Act shall be restarted by the
authority.
D. The time periods shall be tolled during any
time in which the authority has requested and is awaiting
further information from the parties to a transaction
necessary to complete its review."
SECTION 6. Section 59A-63-6 NMSA 1978 (being Laws 2024,
Chapter 40, Section 6) is recompiled as Section 24A-9-6 NMSA
1978 and is amended to read:
"24A-9-6. NOTICE OF PROPOSED TRANSACTION--GENERAL
PROVISIONS--REQUIREMENTS--CONSULTATIONS--EXPERTS--PAYMENT OF
COSTS.--
A. At least one person that is a party to a
proposed transaction shall submit to the authority a written
notice of the proposed transaction in the form and manner
prescribed by the authority. The parties shall pay the HJC/HB 586
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reasonable costs and expenses incurred by the authority in
the performance of the authority's duties pursuant to the
Health Care Consolidation Oversight Act for costs associated
with the authority's contracts with experts, unless
determined otherwise by the secretary. The authority shall
notify parties before any costs are incurred when a
transaction review requires the use of outside experts,
including the estimated cost of their services.
B. Upon receipt of a complete notice of a proposed
transaction, the authority shall determine if the transaction
is urgently necessary to maintain the solvency of a hospital
or if there is an emergency that threatens the continued
provision of immediate health care services. In such
circumstances, the authority may agree to an immediate
approval of a transaction with or without conditions.
C. Entry into a binding agreement before a
transaction is effectuated is not a violation of the Health
Care Consolidation Oversight Act if the transaction remains
subject to regulatory review and approval.
D. If a party to the proposed transaction is a
health insurer, the notice shall be submitted as an addendum
to any filing required by Sections 59A-37-4 through 59A-37-10
NMSA 1978.
E. The notice of the proposed transaction shall
include: HJC/HB 586
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(1) the terms of the proposed transaction
and copies of all transaction agreements between any of the
parties;
(2) a list of the parties and business
addresses;
(3) a statement describing the proposed
transaction, the goals of the proposed transaction and
whether and how the proposed transaction affects health care
services in New Mexico;
(4) the geographic service area affected by
the proposed transaction;
(5) a description of the groups or
individuals likely to be affected by the transaction; and
(6) a summary of the health care services
currently provided by any of the parties and any health care
services that will be added, reduced or eliminated, including
an explanation of why any services will be reduced or
eliminated in the service area in which they are currently
provided.
F. The authority may consult with the office about
the potential effect of the proposed transaction and
incorporate the office's recommendations into the authority's
final determination.
G. The authority may retain actuaries,
accountants, attorneys or other professionals who are HJC/HB 586
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qualified and have expertise in the type of transaction under
review as necessary to assist the authority in conducting its
review of the proposed transaction.
H. The parties shall not effectuate a transaction
without the written approval of the secretary. The
submitting party shall notify the authority in a form and
manner prescribed by the authority when the transaction has
been effectuated.
I. Parties to a proposed transaction may request a
pre-notice conference to determine if they are required to
file a notice or to discuss the potential extent of the
review.
J. The authority shall provide all notices and
documents received from any of the parties to a proposed
transaction to the office and the attorney general. The
attorney general may provide input to the authority about the
potential effect of a proposed transaction relative to the
Antitrust Act, the Unfair Practices Act or other state or
federal law.
K. Nothing in the Health Care Consolidation
Oversight Act shall amend, modify, abrogate or otherwise
affect the applicability or obligations of a party to a
transaction or acquisition under any other state or federal
law. The filing obligations under that act are in addition
to any other obligation that may be required under other HJC/HB 586
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laws."
SECTION 7. A new section of the Health Care
Consolidation Oversight Act, Section 24A-9-6.1 NMSA 1978, is
enacted to read:
"24A-9-6.1. POSTING PUBLIC INFORMATION--PUBLIC
COMMENT--PUBLIC COMMENT FORUMS.--
A. Within ten days of receipt of a complete notice
of a proposed transaction, the authority shall post the
information provided pursuant to Paragraphs (2) through (6)
of Subsection E of Section 24A-9-6 NMSA 1978.
B. The authority shall publish a statement briefly
describing a notice of proposed transaction in at least one
newspaper of general circulation or other media that is
prevalent in the area affected by the transaction. The
authority shall also provide the statement to the following
in the affected area:
(1) municipal and county officials;
(2) county health councils;
(3) Indian nations, tribes and pueblos;
(4) military installation commands;
(5) state legislators;
(6) the state's congressional delegation;
and
(7) any labor organization that represents
employees of the impacted hospital or health care provider HJC/HB 586
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organization.
C. With respect to website, newspaper and other
disseminations and communications described in Subsection B
of this section, the authority shall provide details on how
the public can provide comments and offer multiple methods to
provide comments on a notice of a proposed transaction by
telephone or in writing by mail or electronic mail,
anonymously or by a third party, and such methods shall
provide opportunities to submit comments in languages other
than English.
D. If the authority conducts a review, at least
one public comment forum shall be held in the New Mexico
service area or areas of the hospital or health care provider
organization that is party to or the subject of the proposed
transaction.
E. At least ten calendar days prior to the public
comment forum, the authority shall post to the authority's
website information about the public comment forum and a link
on the website to publicly available materials relevant to
the proposed transaction. The forum notice and the materials
shall be in a format that is easy to find and easy to read
and shall include information on how to submit comments.
F. The authority shall publish a notice of a
public comment forum in at least one newspaper of general
circulation or other media that is prevalent in the area HJC/HB 586
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affected by the transaction and provide the notice to the
officials and other persons specified in Subsection B of this
section.
G. Public comment on a proposed transaction that
is subject to review shall be provided in the same manner as
provided in Subsection C of this section.
H. The authority shall consider public comments
and input received during the public comment forum on a
proposed transaction in the authority's determination."
SECTION 8. Section 59A-63-7 NMSA 1978 (being Laws 2024,
Chapter 40, Section 7) is recompiled as Section 24A-9-7 NMSA
1978 and is amended to read:
"24A-9-7. REVIEW OF PROPOSED TRANSACTION.--
A. Within one hundred twenty days of receiving a
complete notice of a proposed transaction, the authority
shall complete a review, confer with the office and either:
(1) approve the proposed transaction;
(2) approve the proposed transaction with
conditions; or
(3) disapprove the proposed transaction.
B. The secretary shall notify the submitting party
in writing of the authority's determination and the reasons
for the determination.
C. The review period may be extended if the
parties agree to an extension. HJC/HB 586
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D. In conducting a review of a proposed
transaction, the authority may consider the likely effect in
New Mexico of the proposed transaction on:
(1) the potential reduction or elimination
in access to essential services;
(2) the availability, accessibility and
quality of health care services to the area affected by the
transaction;
(3) the health care market share of a party
and whether the transaction may foreclose competitors of a
party from a segment of the market or otherwise increase
barriers to entry in a health care market;
(4) changes in practice restrictions for
health care providers who work at the hospital;
(5) patient costs, including premiums and
out-of-pocket costs;
(6) health care provider networks;
(7) the potential for the proposed
transaction to affect health outcomes for New Mexico
residents; and
(8) current and future wages, benefits,
working conditions, employment protections and restrictions
and other terms and conditions of employment for employees of
hospitals or health care provider organizations that are
parties to or the subject of the proposed transaction. HJC/HB 586
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E. The authority shall approve the proposed
transaction after the review if the authority determines
that:
(1) the parties to the proposed transaction
have demonstrated that the transaction will benefit the
public by:
(a) reducing the growth in patient
costs, including premiums and out-of-pocket costs; or
(b) maintaining or increasing access to
services, especially in medically underserved areas;
(2) the proposed transaction will improve
health outcomes for New Mexico residents; and
(3) there is no substantial likelihood of:
(a) a significant reduction in the
availability, accessibility, affordability or quality of care
for patients and other consumers of health care services; or
(b) anti-competitive effects from the
proposed transaction that outweigh the benefits of the
transaction."
SECTION 9. Section 59A-63-8 NMSA 1978 (being Laws 2024,
Chapter 40, Section 8) is recompiled as Section 24A-9-8 NMSA
1978 and is amended to read:
"24A-9-8. POST-TRANSACTION OVERSIGHT.--
A. The person that acquired control over the
hospital or independent health care practice through an HJC/HB 586
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approved or conditionally approved transaction shall submit
reports to the authority and the office in the form and
manner prescribed by the authority annually for three years
after approval or conditional approval. Conditions to an
approval shall remain in effect for no longer than three
years from the date of the conditional approval.
B. Reports shall:
(1) describe compliance with conditions
placed on the transaction, if any;
(2) describe the growth, decline and other
changes in services provided by the person; and
(3) provide analyses of cost trends and cost
growth trends of the hospital."
SECTION 10. A new section of the Health Care
Consolidation Oversight Act, Section 24A-9-9 NMSA 1978, is
enacted to read:
"24A-9-9. ENFORCEMENT AND ADMINISTRATIVE FINES.--
A. The authority shall enforce the provisions of
the Health Care Consolidation Oversight Act.
B. A transaction that is covered by Section
24A-9-3 NMSA 1978 shall not be effectuated in New Mexico
without the secretary's written determination that no review
is needed or without the written approval, with or without
conditions, of the secretary following review.
C. A person that violates a material or HJC/HB 586
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substantive provision of the Health Care Consolidation
Oversight Act or an order or rule of the authority issued or
adopted in accordance with that act may be assessed an
administrative fine by the secretary of not more than five
thousand dollars ($5,000) for each instance of violation
unless the violation is willful and intentional, in which
case the secretary may assess a fine of not more than ten
thousand dollars ($10,000) for each violation, except as
provided in Paragraph (2) of Subsection D of this section.
For purposes of calculating the fine, the secretary shall
determine what constitutes an "instance of violation" based
on:
(1) the nature of the violation, including
whether it is on a per-day, per-patient, per-instance or
other basis;
(2) the nature of the proposed transaction
and the circumstances of the parties involved;
(3) the potential impact on the
availability, accessibility, affordability or quality of care
for patients of health care services in New Mexico; and
(4) any anticompetitive effects from the
proposed transaction.
D. In the event of a failure to provide the
required notice of proposed transaction, in addition to the
imposition of administrative fines, the secretary may: HJC/HB 586
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(1) require the parties to the unnoticed
transaction to submit a notice of proposed transaction to
allow the authority to complete a preliminary review and:
(a) determine if the transaction should
be subject to a review; and
(b) if needed, conduct such review to
determine if the transaction should: 1) remain effectuated;
2) remain effectuated with conditions; or 3) be disapproved;
and
(2) in the event of a willful and
intentional failure to provide the notice of proposed
transaction, impose an administrative fine of not more than
fifteen thousand dollars ($15,000) per day from the date on
which the notice was required to be submitted to the
authority to the date of issuance of an order approving,
approving with conditions or disapproving the transaction.
E. Money collected from the imposition of an
administrative fine pursuant to the Health Care Consolidation
Oversight Act shall be deposited in the state treasury to the
credit of the current school fund as provided by Article 12,
Section 4 of the constitution of New Mexico."
SECTION 11. A new section of the Health Care
Consolidation Oversight Act, Section 24A-9-10 NMSA 1978, is
enacted to read:
"24A-9-10. ACT NOT EXCLUSIVE--ATTORNEY GENERAL.-- HJC/HB 586
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Nothing in the Health Care Consolidation Oversight Act limits
the authority of the attorney general to protect consumers in
the health care market or to protect the economy of the state
or any significant part of the state insofar as health care
is concerned under any state or federal law. The authority
of the attorney general to maintain competitive markets and
prosecute state and federal antitrust and unfair competition
violations shall not be narrowed, abrogated or otherwise
altered by that act."
SECTION 12. A new section of the Health Care
Consolidation Oversight Act, Section 24A-9-11 NMSA 1978, is
enacted to read:
"24A-9-11. JURISDICTION.--New Mexico courts shall have
personal jurisdiction over the parties to a transaction
subject to the provisions of the Health Care Consolidation
Oversight Act, including the parties to the transaction and
any person affiliated with a party."
SECTION 13. A new section of the Health Care
Consolidation Oversight Act, Section 24A-9-12 NMSA 1978, is
enacted to read:
"24A-9-12. WHISTLEBLOWER PROTECTION--POLICY
REQUIRED--RETALIATION PROHIBITED--PENALTIES.--
A. As used in this section:
(1) "entity" means hospitals, management
services organizations and health care provider organizations HJC/HB 586
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that are owned or affiliated with health insurers;
(2) "good faith" means that a reasonable
basis exists in fact as evidenced by the facts available;
(3) "retaliatory action" means any
discriminatory or adverse action taken by an entity against a
whistleblower, including termination, discharge, demotion,
suspension, harassment or limitation on access to health care
services;
(4) "unlawful or improper act" means a
practice, procedure, action or failure to act on the part of
an entity that violates the Health Care Consolidation
Oversight Act or the authority's or attorney general's
ability to exercise authority pursuant to that act; and
(5) "whistleblower" means a health care
provider, officer, employee, contractor, subcontractor or
authorized agent of an entity who reveals information about
an unlawful or improper act by the entity.
B. An entity shall not take any retaliatory action
against a whistleblower who:
(1) discloses to the authority, the attorney
general, the office or any other state, local or federal
governmental body information about an action or a failure to
act that the whistleblower believes in good faith constitutes
an unlawful or improper act;
(2) provides information to or testifies HJC/HB 586
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before a public body as part of an investigation, hearing or
inquiry into an unlawful or improper act; or
(3) objects to or refuses to participate in
an activity, policy or practice that the whistleblower
believes in good faith constitutes an unlawful or improper
act.
C. Every entity shall adopt, promulgate and
enforce a whistleblower protection policy that, at a minimum,
meets the requirements of Subsection B of this section to
protect whistleblowers from any form of retaliatory action by
the entity. The policy shall be posted at each entity's
workplace, published on the entity's website and given, by
either written or electronic communication, to every officer,
employee, contractor or other agent of the entity.
D. Except as otherwise provided in the Health Care
Consolidation Oversight Act and in addition to any criminal
charges or civil suits that may be brought against an entity
for either an unlawful or improper act or retaliatory
actions, the secretary may assess an administrative fine not
to exceed ten thousand dollars ($10,000) on an entity that
the secretary finds has engaged in retaliatory action. Each
retaliatory action or each day of violation may be considered
a separate violation. If the secretary finds the entity
willfully or repeatedly violated or continues to violate the
prohibition against retaliatory actions, the secretary may HJC/HB 586
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assess an administrative fine not to exceed one hundred
thousand dollars ($100,000) for each violation.
E. The secretary shall give notice to the entity
of the secretary's intention to assess an administrative fine
and specify the findings of retaliatory action. The entity
may request a hearing, which shall be conducted as provided
in the Administrative Procedures Act. The secretary shall
make final findings and decisions, which may include the time
in which the entity must correct an unlawful or improper
violation, and send a copy by registered mail to the entity.
The decision of the secretary is a final agency action and
may be appealed to the district court as provided in Section
39-3-1.1 NMSA 1978. The entity has thirty days in which to
pay the administrative fine.
F. An entity that fails to stop or correct a
retaliatory action within the period allowed for its
correction, which period shall not begin to run until the
date of the final order or appeal, if applicable, may be
assessed a separate administrative fine not to exceed fifteen
thousand dollars ($15,000) for each day during which the
failure to stop or correct retaliatory action continues past
the deadline for stopping or correcting the action.
G. Administrative fines shall be deposited in the
state treasury to the credit of the current school fund as
required by Article 12, Section 4 of the constitution of New HJC/HB 586
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Mexico.
H. The rights and remedies provided in this
section shall not be waived by an agreement, policy form or
condition of employment, including by an arbitration
agreement.
I. Nothing in this section shall be deemed to
diminish the rights, privileges or remedies of a
whistleblower or other person pursuant to any federal or
state law or pursuant to any collective bargaining
agreement."
SECTION 14. A new section of the Health Care
Consolidation Oversight Act, Section 24A-9-13 NMSA 1978, is
enacted to read:
"24A-9-13. AUTHORITY--HOSPITAL OWNERSHIP--ANNUAL
POSTING ON WEBSITE.--The authority shall post hospital
ownership annually on the authority's website and at any
point in which there is a change of ownership of a hospital
or the real estate on which a hospital stands."
SECTION 15. REPEAL.--Laws 2024, Chapter 40, Section 9
is repealed.
SECTION 16. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2025.