By: Frank H.B. No. 2747
A BILL TO BE ENTITLED
AN ACT
relating to requiring certain health care entities to submit notice
of material change transactions to the attorney general and the
attorney general's authority to conduct certain related studies;
imposing civil and administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Healthcare patients and consumers benefit when
there are robust markets for goods and services, in which providers
of coverage and care compete to offer higher-quality care and
better prices. Consolidation in healthcare markets has reduced
competition and driven up prices. The purpose of this Act is to
promote competitive markets by strengthening the state's ability to
enforce laws and prevent anti-competitive behavior.
SECTION 2. Title 2, Business & Commerce Code, is amended by
adding Chapter 15A to read as follows:
CHAPTER 15A. MATERIAL CHANGE TRANSACTIONS INVOLVING HEALTH CARE
ENTITIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 15A.0001. DEFINITIONS. In this chapter:
(1) "Attorney general" and "person" have the meanings
assigned by Section 15.03.
(2) "Health care entity" means a health care provider,
health care facility, provider organization, pharmacy benefit
manager, or health carrier that offers a health benefit plan in this
state.
(3) "Health care facility" means a facility licensed
to provide health care services, including:
(A) a hospital or other inpatient facility for
providing health care services;
(B) a health system consisting of jointly owned
or managed health care entities;
(C) a skilled nursing facility licensed under
Chapter 242, Health and Safety Code;
(D) an ambulatory surgical center licensed under
Chapter 243, Health and Safety Code;
(E) a freestanding emergency medical care
facility licensed under Chapter 254, Health and Safety Code;
(F) a general residential operation licensed
under Chapter 42, Human Resources Code, that provides treatment
services;
(G) a diagnostic, laboratory, or imaging center;
(H) an outpatient clinic licensed in this state
to provide health care services; or
(I) a rehabilitation center or other therapeutic
center licensed in this state to provide health care services.
(4) "Health care provider" means an individual
qualified or licensed to perform or provide health care services in
this state.
(5) "Health care services" means:
(A) services provided for the care, prevention,
diagnosis, treatment, cure, or relief of a medical, dental, or
behavioral health condition, including:
(i) inpatient, outpatient, habilitative,
rehabilitative, dental, palliative, therapeutic, supportive, home
health, or behavioral services provided by a health care entity;
(ii) retail and specialty pharmacy
services, including drugs, devices, and medical supplies provided
by a pharmacy; and
(iii) performance of functions to refer,
arrange, or coordinate health care services;
(B) equipment used to provide services described
by Paragraph (A), including durable medical equipment and
diagnostic, infusion, and surgical devices; and
(C) technology associated with the provision of
services and equipment described by Paragraphs (A) and (B),
including telehealth services, telemedicine medical services,
electronic health records, software, claims processors, and
utilization systems.
(6) "Health carrier" has the meaning assigned by
Section 1507.002, Insurance Code.
(7) "Management services organization" means an
organization or entity that contracts with a health care provider
or provider organization to perform management or administrative
services relating to, supporting, or facilitating the provision of
health care services.
(8) "Material change transaction" means a transaction
that entails a material change to ownership, operations, or
governance structure of a legal entity.
(9) "Pharmacy benefit manager" has the meaning
assigned by Section 4151.151, Insurance Code.
(10) "Provider organization" means an incorporated or
unincorporated corporation, partnership, business trust,
association, or organized group of persons that is in the business
of health care service delivery or management and that represents
at least one health care provider in contracting with a health
carrier for the payment of health care services. The term includes
a physician organization, physician-hospital organization,
independent practice association, provider network, accountable
care organization, management services organization, or other
organization that contracts with a health carrier for the payment
of health care services.
Sec. 15A.0002. APPLICABILITY OF CHAPTER TO MATERIAL CHANGE
TRANSACTIONS; EXCEPTIONS. (a) This chapter applies only to the
following material change transactions, whether occurring as a
single transaction or a series of related transactions within a
consecutive 12-month period:
(1) a merger that includes one or more health care
entities;
(2) a sale or other acquisition, including by lease,
transfer, exchange, option, receipt through conveyance, and
creation of a joint venture, of:
(A) one or more health care entities, including
insolvent health care entities; or
(B) a material amount of the assets or operations
of one or more health care entities;
(3) a contract or other arrangement, including an
association, partnership, or joint venture, that results in a
person acquiring direct or indirect control over all or a
substantial part of a health care entity's operations or
governance;
(4) the formation of a partnership, joint venture,
accountable care organization, parent organization, or management
services organization for the purpose of administering contracts
with health carriers, third-party administrators, pharmacy benefit
managers, or health care providers;
(5) the sale, purchase, lease, affiliation, or
transfer of control of a health care entity's board of directors or
other governing body; or
(6) a real estate sale or lease agreement involving a
material amount of health care entity assets.
(b) This chapter does not apply to the following:
(1) a clinical affiliation of health care entities
formed solely to collaborate on clinical trials;
(2) a graduate medical education program; or
(3) an offer of employment to, or the hiring of, not
more than one physician.
Sec. 15A.0003. CONFIDENTIALITY OF CERTAIN INFORMATION. (a)
All documents and other information provided to the attorney
general under this chapter, including the notice required under
Section 15A.0051, are not public information under Chapter 552,
Government Code, and may not be released or made public on subpoena
or otherwise except as provided by this section.
(b) The attorney general may release documents or
information:
(1) with the consent of the entity that submitted the
information; or
(2) to an expert or consultant under contract with the
attorney general solely for the purpose of conducting or aiding in
the creation of a study under Section 15A.0101, provided that the
expert or consultant is bound by the same confidentiality
requirements as the attorney general.
SUBCHAPTER B. NOTICE OF MATERIAL CHANGE TRANSACTIONS
Sec. 15A.0051. REQUIRED NOTICE OF PROPOSED MATERIAL CHANGE
TRANSACTIONS. (a) A health care entity shall submit written notice
to the attorney general of any material change transaction
involving the entity not less than 90 days before the date the
change is to take effect.
(b) The attorney general by rule shall prescribe the method
and form of the written notice required under this section.
Sec. 15A.0052. CIVIL PENALTY; INJUNCTION. (a) A person who
violates Section 15A.0051 is liable to this state for a civil
penalty in an amount not to exceed $10,000 for each violation.
(b) The attorney general may bring an action to:
(1) recover the civil penalty imposed by Subsection
(a); and
(2) restrain or enjoin a person from violating Section
15A.0051.
(c) The attorney general may recover reasonable attorney's
fees and other reasonable expenses incurred in investigating and
bringing an action under this section.
(d) The attorney general shall deposit a civil penalty
collected under this section in the state treasury to the credit of
the general revenue fund. Money deposited under this section may
only be appropriated to the attorney general for the purpose of
operating the attorney general's antitrust division.
SUBCHAPTER C. MARKET STUDIES
Sec. 15A.0101. STUDIES ON HEALTH CARE MARKETS. (a) The
attorney general may conduct studies on the following topics:
(1) the conditions of a health care market in this
state or in a region or political subdivision of this state,
including:
(A) the degree of health care entity ownership or
other concentration;
(B) the strength of competitive forces on price
and quality of health care services; and
(C) trends in the price, quality, and
availability of health care services; and
(2) the impacts of completed material change
transactions on a market.
(b) The attorney general may request necessary documents or
other information from health care and other relevant entities
involved in the health care market to conduct the studies required
by this section.
(c) Entities shall provide requested information not later
than the 30th day after the date of the request.
Sec. 15A.0102. ADMINISTRATIVE PENALTY. The attorney
general may assess an administrative penalty in an amount not to
exceed $1,000 against an entity that does not submit the requested
information in accordance with Section 15A.0101. Each day a
violation continues is considered a separate violation for purposes
of imposing the administrative penalty under this section.
SECTION 3. This Act takes effect September 1, 2025.