Pennsylvania SB 322: An Act providing for approval from the Department of Health and the Office of Attorney General before certain transactions involving health care entities within this Commonwealth.

Bill Text

PRINTER'S NO. 817
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 322
Session of
2025
INTRODUCED BY KEARNEY, KANE, CAPPELLETTI, A. WILLIAMS, HAYWOOD,
SAVAL, COSTA, SCHWANK AND FLYNN, MAY 22, 2025
REFERRED TO INSTITUTIONAL SUSTAINABILITY AND INNOVATION,
MAY 22, 2025
AN ACT
Providing for approval from the Department of Health and the
Office of Attorney General before certain transactions
involving health care entities within this Commonwealth.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Definitions.
Chapter 3. Covered Health Care Transactions
Section 301. Transactions against public interest.
Section 302. Filing of transactions.
Section 303. Public input.
Section 304. Determination and restraining prohibited
transactions.
Section 305. Compliance and power of court.
Section 306. Powers and duties of Attorney General.
Section 307. Powers and duties of department.
Section 308. Confidential treatment.
Chapter 10. Miscellaneous Provisions
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Section 1001. Construction.
Section 1002. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Health System
Protection Act.
Section 102. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Affected community." A county within this Commonwealth
where an existing health care facility is physically located or
a county whose residents are regularly served by the existing
health care facility.
"Affiliate." A person that directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is
under common control with, the person specified.
"Against the public interest." A covered transaction that,
as determined by the Attorney General, results in any of the
following:
(1) A significant reduction in competition or a
significant increase in costs for health care payers,
purchasers or consumers.
(2) An unfair method of competition in or affecting
health care commerce or an unfair or deceptive act or
practice in or affecting health care commerce.
(3) A significant reduction in the quality of care.
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(4) A significant reduction in access to or availability
of health care services for payers, purchasers or consumers.
(5) A significant reduction in access to care in a
rural, low-income or disadvantaged community.
(6) A health care leaseback agreement.
"Attorney General." The Office of Attorney General of the
Commonwealth.
"Capital distribution." A payment made, liability incurred
or other consideration given by a health care entity to a person
for the purchase, acquisition, redemption, repurchase, payment
or retirement of capital stock or other equity interest of the
health care entity or as a dividend, return of capital or other
distribution in respect of the health care entity's capital
stock or other equity interest.
"Control," "controlled by" or "under common control with."
As follows:
(1) The possession, direct or indirect, of the power to
direct or cause the direction of the management and policies
of a person, whether through the ownership of voting
securities, by contract other than a commercial contract for
goods or nonmanagement services or otherwise, unless the
power is the result of an official position with or corporate
office held by the person. Control shall be presumed to exist
if a person, directly or indirectly:
(i) owns more than 10% of a person; or
(ii) controls, holds with the power to vote or holds
proxies representing 10% or more of the votes that all
shareholders or members would be entitled to cast in the
election of directors or managers.
(2) The presumption under paragraph (1) may be rebutted
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by a showing that control does not exist in fact. The
Attorney General may determine, after furnishing all persons
in interest notice and opportunity to be heard and making
specific findings of fact to support the determination, that
control exists in fact, notwithstanding the absence of a
presumption to that effect or that another person has
control.
"Covered entity." Includes:
(1) A for-profit entity or an affiliate of a for-profit
entity that owns, operates or controls or seeks to own,
operate or control a health care entity.
(2) An investor or group of investors who primarily
engage in the raising or returning of capital and who invest,
develop or dispose of specified assets, a private equity
company, a private equity fund or a real estate investment
trust or affiliate.
"Covered transaction." A transaction or a series of
transactions involving at least one health care entity and on