Pennsylvania SB 708: An Act amending the act of July 19, 1979 (P.L.130, No.48), known as the Health Care Facilities Act, providing for Attorney General notification; and promulgating regulations.

Bill Text

PRINTER'S NO. 807
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 708
Session of
2025
INTRODUCED BY BROOKS, KEEFER, FONTANA, HUTCHINSON, BAKER, DUSH
AND MASTRIANO, MAY 16, 2025
REFERRED TO INSTITUTIONAL SUSTAINABILITY AND INNOVATION,
MAY 16, 2025
AN ACT
Amending the act of July 19, 1979 (P.L.130, No.48), entitled "An
act relating to health care; prescribing the powers and
duties of the Department of Health; establishing and
providing the powers and duties of the State Health
Coordinating Council, health systems agencies and Health Care
Policy Board in the Department of Health, and State Health
Facility Hearing Board in the Department of Justice;
providing for certification of need of health care providers
and prescribing penalties," providing for Attorney General
notification; and promulgating regulations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of July 19, 1979 (P.L.130, No.48), known
as the Health Care Facilities Act, is amended by adding a
chapter to read:
CHAPTER 8-D
ATTORNEY GENERAL NOTIFICATION
Section 801-D. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Acquired entity." The entity, or portion of an entity,
acquired under an agreement or transaction.
"Acquisition." An agreement, arrangement or activity the
consummation of which results in a health care facility
acquiring direct or indirect control of another health care
facility . The term includes the acquisition of voting securities
and noncorporate interests, including assets, capital stock or
membership interests or equity interests.
"Against the public interest." A determination that an
action is against the welfare or well-being of the general
public of this Commonwealth.
"Agreement or transaction." An agreement or transaction as
described under section 803-D(a).
"Attorney General." The Office of Attorney General of the
Commonwealth.
"Capital distribution." A payment made, liability incurred
or other consideration given by a target firm health system to a
health care facility for the purchase, acquisition, redemption,
repurchase, payment or retirement of capital stock or other
equity interest of the target firm health system or as a
dividend, return of capital or other distribution in respect of
the target firm health system's capital stock or other equity
interest.
"Community health needs assessment." An assessment that
complies with the requirements of 26 U.S.C. § 501(r)(3)
(relating to exemption from tax on corporations, certain trusts,
etc.).
"Contracting affiliation." As follows:
(1) The formation of a relationship between two or more
entities that permits any of the following:
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(i) The entities to negotiate jointly with carriers
or third-party administrators over rates for professional
medical services.
(ii) One entity to negotiate on behalf of the other
entity with carriers or third-party administrators over
rates for professional medical services.
(2) The term does not include an arrangement among
entities under common ownership.
"Health care facility." As defined in section 103.
"Health system." As defined in section 809.2.
"Material amount." An amount of the purchase price paid or
total gross assets being acquired, whichever is higher, of:
(1) $10,000,000 in a solo transaction; or
(2) $35,000,000 in the aggregate during one calendar
year.
"Material change." Any of the following:
(1) The sale, transfer, lease or other encumbrance of a
material amount of a health system's assets or operations,
including real property, employment groups, emergency
departments or other units.
(2) A merger, an acquisition or a contracting
affiliation with another health system that is valued at a
material amount.
(3) A capital distribution or similar reduction of a
health system's equity capital by a material amount or the
incursion of an obligation that commits the health system to
making a capital distribution or similar reduction of equity
by a material amount.
"Merger." A consolidation of two or more organizations,
including two or more organizations joining through a common
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parent organization, or two or more organizations forming a new
organization. The term does not include a corporate
reorganization.
"Person." As defined in 1 Pa.C.S. § 1991 (relating to
definitions).
Section 802-D. Notification .
(a) General rule.--Except as provided under subsection (b),
a person may not enter into an agreement or transaction
involving a material change with another health care facility
unless the first health care facility complies with the
notification requirements under this chapter.
(b) Exception.--An action