Florida Senate - 2020                                     SB 758
       By Senator Albritton
       26-01020-20                                            2020758__
    1                        A bill to be entitled                      
    2         An act relating to hospital, hospital system, or
    3         provider organization transactions; creating s.
    4         542.275, F.S.; defining terms; requiring certain
    5         entities to submit written notice of a specified
    6         filing to the Office of the Attorney General relating
    7         to certain hospital, hospital system, or provider
    8         organization mergers, acquisitions, and other
    9         transactions within a specified timeframe; requiring
   10         that such entities submit written notice of a material
   11         change to the office within a specified timeframe;
   12         providing requirements for such notice; authorizing
   13         the office to request additional information or issue
   14         a civil investigative demand; requiring the office to
   15         submit a biennial report to the Legislature by a
   16         specified date; providing a civil penalty; providing
   17         that such penalty be deposited into a specified trust
   18         fund; authorizing the office to engage the services of
   19         certain persons to fulfill its duties; authorizing
   20         positions and providing appropriations; providing an
   21         effective date.
   23  Be It Enacted by the Legislature of the State of Florida:
   25         Section 1. Section 542.275, Florida Statutes, is created to
   26  read:
   27         542.275Hospital, hospital system, or provider organization
   28  mergers, acquisitions, and other transactions; notice;
   29  reporting; penalty.—
   30         (1)As used in this section, the term:
   31         (a)“Acquisition” means an agreement, arrangement, or
   32  activity that results in a hospital, hospital system, or
   33  provider organization, directly or indirectly, obtaining control
   34  of another hospital, hospital system, or provider organization,
   35  including, but not limited to, the acquisition of voting
   36  securities and noncorporate interests, such as assets, capital
   37  stock, membership interests, or equity interests.
   38         (b)“Contracting affiliation” means a relationship between
   39  two or more entities wherein the entities have the ability to
   40  negotiate jointly with payors over rates for health care
   41  services, or one entity negotiates on behalf of the other entity
   42  with payors over rates for professional medical services in the
   43  primary service area in which the entities operate. The term
   44  does not include arrangements among entities under common
   45  ownership.
   46         (c)“Health care provider” means any physician licensed
   47  under chapter 458, chapter 459, chapter 460, or chapter 461, or
   48  any health care provider licensed under chapter 463 or chapter
   49  466.
   50         (d)“Hospital” has the same meaning as provided in s.
   51  395.002(12).
   52         (e)“Hospital system” means:
   53         1.A corporation that owns one or more hospitals and any
   54  entity affiliated with such corporation through ownership or
   55  control; or
   56         2.A hospital and any entity affiliated with such hospital
   57  through ownership.
   58         (f)“Material change” means a merger, acquisition, or
   59  contracting affiliation that generates a combined revenue of $50
   60  million or more between two or more entities of the following
   61  types:
   62         1.Hospitals;
   63         2.Hospital systems; or
   64         3.Provider organizations.
   65         (g)“Payor” means any entity or person that negotiates or
   66  assumes financial responsibility for a defined set of benefits
   67  from a health insurance plan or health insurance program. The
   68  term includes, but is not limited to, federal, state, and local
   69  governmental entities or agencies; affiliates; health insurance
   70  companies; health maintenance organizations; insurers; nonprofit
   71  religious organizations; persons; preferred provider
   72  organizations; prepaid limited health service organizations; and
   73  third-party administrators.
   74         (h)“Primary service area” means the geographic area
   75  measured by the fewest number of zip codes from which the
   76  hospital, hospital system, or provider organization draws at
   77  least 75 percent of its patients.
   78         (i)“Provider organization” means a corporation,
   79  partnership, business trust, association, or organized group of
   80  persons, whether incorporated or not, which is in the business
   81  of health care services and represents four or more health care
   82  providers in contracting with payors for the payments of health
   83  care services. The term includes, but is not limited to,
   84  physician organizations, physician-hospital organizations,
   85  independent practice associations, provider networks, and
   86  accountable care organizations.
   87         (2)(a)Any hospital, hospital system, or provider
   88  organization conducting business in this state which is required
   89  to file the Notification and Report Form for Certain Mergers and
   90  Acquisitions pursuant to the Hart-Scott-Rodino Antitrust
   91  Improvements Act, 15 U.S.C. s. 18a(a), shall provide written
   92  notice of such filing to the Office of the Attorney General at
   93  the same time that notice is filed with the Federal Government.
   94         (b)Except when notice is required pursuant to paragraph
   95  (a), at least 90 days before the effective date of any
   96  transaction that would result in a material change, the parties
   97  to the transaction shall submit written notice to the Office of
   98  the Attorney General of such material change. Such written
   99  notice must identify all acquisitions that occurred during the 5
  100  years preceding the date of the notice.
  101         (c)The written notice required under paragraphs (a) and
  102  (b) shall include all of the following:
  103         1.The names of the parties and their current business
  104  addresses.
  105         2.A description of the proposed relationship among the
  106  parties to the proposed transaction.
  107         3.A description of the health care services at each
  108  location at which services are currently provided and at any
  109  locations at which health care services will be provided.
  110         4.The primary service area to be served by each location.
  111         (d)Any written notice required under this subsection shall
  112  identify any information that the hospital, hospital system, or
  113  provider organization deems a trade secret, as defined in s.
  114  688.002, or exempt from public records laws pursuant to any
  115  other statutorily recognized exemption.
  116         (e)Upon receipt of any written notice submitted pursuant
  117  to this subsection, the Office of the Attorney General may
  118  request additional information or issue a civil investigative
  119  demand under s. 542.28.
  121  A hospital, hospital system, or provider organization who is a
  122  party to a material change is not prohibited from voluntarily
  123  providing additional information to the office.
  124         (3)Beginning January 1, 2021, the Office of the Attorney
  125  General shall submit a biennial report to the President of the
  126  Senate and the Speaker of the House of Representatives regarding
  127  its review of transactions under this section.
  128         (4)A hospital, hospital system, or provider organization
  129  that fails to comply with this section is subject to a civil
  130  penalty of not more than $500,000, which shall be deposited into
  131  the Legal Affairs Revolving Trust Fund created under s.
  132  16.53(1).
  133         Section 2. In any review authorized under this act, the
  134  Office of the Attorney General may engage the services of
  135  consultants, experts, accountants, economists, analysts, and
  136  other assistants. When the review of a transaction is completed,
  137  the reasonable expenses related to such services shall be paid
  138  by the parties to the transaction.
  139         Section 3. For the 2020-2021 fiscal year, 12 full-time
  140  equivalent positions with associated salary rate of 629,382 are
  141  authorized and the sums of $1,295,718 in recurring funds and
  142  $48,284 in nonrecurring funds from the General Revenue Fund are
  143  appropriated to the Department of Legal Affairs for the purpose
  144  of implementing s. 542.275, Florida Statutes.
  145         Section 4. This act shall take effect July 1, 2020.