It is the intent of the legislature to ensure that competition beneficial to consumers in health care markets across Washington remains vigorous and robust and that health care be affordable and accessible. The legislature supports these intents through this chapter, which provides the attorney general with notice of all material health care transactions in this state so that the attorney general has the information necessary to determine whether an investigation under the consumer protection act is warranted for potential anticompetitive conduct and consumer harm. This chapter is intended to supplement the federal Hart-Scott-Rodino antitrust improvements act, Title 15 U.S.C. Sec. 18a, by requiring notice of transactions not reportable under Hart-Scott-Rodino reporting thresholds and by providing the attorney general with a copy of any filings made pursuant to the Hart-Scott-Rodino act. In addition to ensuring vigorous and robust competition in health care markets, this chapter is also intended to ensure material change transactions result in the affected communities having the same or greater access to quality, affordable care, including emergency care, primary care, reproductive care, end-of-life care including services provided in accordance with chapter 70.245 RCW, and gender affirming care.
Notwithstanding the language in this chapter regarding the attorney general's authority to determine the effect of a material change transaction on access to care, nothing in this chapter is intended to derogate from or otherwise affect in any way the attorney general's authority to conduct an investigation, or the process of any investigation, under chapter 19.86 RCW. Nothing in this section is intended to change or affect in any way any substantive law regarding the antitrust analysis of a material change transaction.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Acquisition" means an agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes the acquisition of voting securities and noncorporate interests, such as assets, capital stock, membership interests, or equity interests.
"Carrier" means the same as in RCW 48.43.005.
"Contracting affiliation" means the formation of a relationship between two or more entities that permits the entities to negotiate jointly with carriers or third-party administrators over rates for professional medical services, or for one entity to negotiate on behalf of the other entity with carriers or third-party administrators over rates for professional medical services. "Contracting affiliation" does not include arrangements among entities under common ownership.
"Gender affirming care" means a service or product that a health care provider, as defined in RCW 70.02.010, prescribes to an individual to treat any condition related to the individual's gender identity and is prescribed in accordance with generally accepted standards of care. Gender affirming care must be covered in a manner compliant with the federal mental health parity and addiction equity act of 2008 and the federal patient protection and affordable care act of 2010. Gender affirming care can be prescribed to two spirit, transgender, nonbinary, intersex, and other gender diverse individuals.
"Health care services" means medical, surgical, chiropractic, hospital, optometric, podiatric, pharmaceutical, ambulance, mental health, substance use disorder, therapeutic, preventative, diagnostic, curative, rehabilitative, palliative, custodial, and any other services relating to the prevention, cure, or treatment of illness, injury, or disease. Health care services may be provided virtually, on-demand, or in brick and mortar settings.
"Health care services revenue" means the total revenue received for health care services in the previous twelve months.
"Health maintenance organization" means an organization receiving a certificate of registration pursuant to chapter 48.46 RCW which provides comprehensive health care services to enrolled participants of such organization on a group practice per capita prepayment basis or on a prepaid individual practice plan, except for an enrolled participant's responsibility for copayments and deductibles, either directly or through contractual or other arrangements with other institutions, entities, or persons, and which qualifies as a health maintenance organization pursuant to RCW 48.46.030 and 48.46.040.
"Hospital" means a facility licensed under chapter 70.41 or 71.12 RCW.
"Hospital system" means:
A parent corporation of one or more hospitals and any entity affiliated with such parent corporation through ownership or control; or
A hospital and any entity affiliated with such hospital through ownership.
"Merger" means a consolidation of two or more organizations, including two or more organizations joining through a common parent organization or two or more organizations forming a new organization, but does not include a corporate reorganization.
"Person" means, where applicable, natural persons, corporations, trusts, and partnerships.
"Provider" means a natural person who practices a profession identified in RCW 18.130.040.
"Provider organization" means a corporation, partnership, business trust, association, or organized group of persons, whether incorporated or not, which is in the business of health care delivery or management and that represents seven or more health care providers in contracting with carriers or third-party administrators for the payments of health care services. A "provider organization" includes physician organizations, physician-hospital organizations, independent practice associations, provider networks, and accountable care organizations.
"Reproductive health care" means any medical services or treatments, including pharmaceutical and preventive care services or treatments, directly involved in the reproductive system and its processes, functions, and organs involved in reproduction, in all stages of life.
"Successor persons" means persons formed by, resulting from, or surviving any material change transaction under this chapter.
"Third-party administrator" means an entity that administers payments for health care services on behalf of a client in exchange for an administrative fee.
Not less than 120 days prior to the effective date of any transaction that results in a material change, the parties to the transaction shall submit written notice to the attorney general of such material change transaction.
For the purposes of this chapter, a material change transaction includes a merger, acquisition, or contracting affiliation between two or more entities of the following types:
Hospitals;
Hospital systems; or
Provider organizations.
A material change transaction includes proposed changes identified in subsection (2) of this section between a Washington entity and an out-of-state entity where the out-of-state entity generates $10,000,000 or more in health care services revenue from patients residing in Washington state, and the entities are of the types identified in subsection (2) of this section. Any party to a material change transaction that is licensed or operating in Washington state shall submit a notice as required under this section.
For purposes of subsection (2) of this section, a merger, acquisition, or contracting affiliation between two or more hospitals, hospital systems, or provider organizations only qualifies as a material change transaction if the hospitals, hospital systems, or provider organizations did not previously have common ownership or a contracting affiliation.
For material change transactions where none of the parties are hospitals or hospital systems and none of the parties have generated $10,000,000 or more in health care services revenue from patients residing in Washington state in any of their preceding three fiscal years, the written notice provided by the parties, as required by RCW 19.390.030, must include:
The names of the parties and their current business addresses;
Identification of all locations where health care services are currently provided by each party;
A brief description of the nature and purpose of the proposed material change transaction; and
The anticipated effective date of the proposed material change transaction.
For material change transactions where none of the parties are hospitals or hospital systems and all of the parties serve predominantly low-income, medically underserved individuals, and all of the parties had for each of their preceding three fiscal years at least 50 percent of their total patient revenue come from medicaid or local, state, or federal funding to provide care to uninsured or underinsured individuals, and the material change transaction would not result in materially lowering the overall level of care the successor persons' provide to individuals on medicaid or who are uninsured or underinsured, or cause, for the successor persons, the percentage of total patient revenue that comes from medicaid or local, state, or federal funding to provide care to uninsured or underinsured individuals to drop below 50 percent, the written notice provided by the parties, as required by RCW 19.390.030, must include:
The information and documentation required under subsection (1)(a) through (d) of this section; and
Documentation demonstrating that all the parties to the material change transaction had for each of their preceding three fiscal years at least 50 percent of their total patient revenue come from medicaid or local, state, or federal funding to provide care to uninsured or underinsured individuals, and a statement from the parties describing how the material change transaction will result in the successor persons complying with the requirements under this subsection.
For all material change transactions other than those specified under subsections (1) and (2) of this section, the written notice provided by the parties, as required by RCW 19.390.030, must include:
The information and documentation required under subsection (1)(a) through (d) of this section;
A copy of the material change transaction agreement;
If applicable, a statement from each of the parties' board of directors that explains the effect the material change transaction will likely have on delivery and cost of health-related services to the communities impacted by the material change transaction, and the basis for this opinion. The statement must also describe all dissenting viewpoints of which the boards of directors are aware;
If applicable, a copy of the two most recent community needs assessments or any similar evaluations or assessments prepared by or for any of the hospitals, hospital systems, or provider organizations that are the subject of the material change transaction, and the identity of all persons who assisted or contributed to any of the evaluations or assessments;
A description of all charity care provided in the last three years, as well as denials, and the projected charity care for three years following the material change transaction by the parties to the material change transaction, or any successor persons. This description must include:
Annual total charity care spending;
Inpatient, outpatient, and emergency room charity care spending;
A description of how the amount of charity care spending was calculated;
Annual charity care inpatient discharges, outpatient visits, and emergency visits;
A description of the types of charity care services provided annually;
The number of charity care denials and reasons for denial; and
A description of the policies, procedures, and eligibility requirements for the provision of charity care;
A description of the health care services currently provided at each hospital, hospital system, or provider organization that is the subject of the material change transaction;
A description of all services provided in the past five years by each hospital, hospital system, and provider organization that is the subject of the material change transaction to apple health patients, qualified health plan patients, and indigent patients. This description must include, but is not limited to, the type and volume of services provided, the payors for the services provided, the demographic characteristics of and zip code data for the patients served by the hospital, hospital system, or provider organization, and the costs and revenues for the services provided;
All policies, procedures, and other training materials related to registration, admission, and collections, including upfront, point-of-service, and postservice billing and collections;
The following current policies for any hospital and, to the extent they exist, the following current policies for any provider organization that is the subject of the material change transaction: (i) Admission policies; (ii) nondiscrimination policies; (iii) end-of-life policies; (iv) reproductive health policies; and (v) the reproductive health care services form as required under RCW 70.41.520;
The following proposed policies that will apply after the material change transaction for any hospital or provider organization that is the subject of the material change transaction: (i) Admission policies; (ii) nondiscrimination policies; (iii) end-of-life policies; (iv) reproductive health policies; and (v) for hospitals, the reproductive health care services form as required under RCW 70.41.520;
To the extent they exist, any policies concerning the information and referrals medical providers are required to provide or are restricted from providing to patients regarding end-of-life care, including services provided in accordance with chapter 70.245 RCW;
If the material change transaction will have any impact on reproductive health care services provided by any hospital, hospital system, or provider organization that is the subject of the material change transaction, or any impact on the availability or accessibility of reproductive health care services in Washington state, a description of the reproductive health care services provided in the last five years by each hospital, hospital system, or provider organization that is the subject of the material change transaction and a description of the effect the material change transaction will have on available reproductive health care services. This description must include the types and levels of reproductive services provided in the last five years and those proposed to be provided after the material change transaction, including, but not limited to, information about contraception provision, pregnancy terminations, tubal ligations, and fertility treatments provided, and a description of how this information was compiled;
If the material change transaction will have any impact on end-of-life health care services provided by any hospital, hospital system, or provider organization that is the subject of the material change transaction, including services provided in accordance with chapter 70.245 RCW, or any impact on the availability or accessibility of end-of-life health care services in Washington state, including services provided in accordance with chapter 70.245 RCW, a description of the end-of-life health care services provided in the last five years by each hospital, hospital system, or provider organization that is the subject of the material change transaction and a description of the effect the material change transaction will have on available end-of-life care services. This description must include the types and levels of end-of-life services provided in the last five years and those proposed to be provided after the material change transaction including, but not limited to, information about the number of occasions in which doctors served as consulting or attending physicians at the hospital, hospital system, or provider organization under chapter 70.245 RCW, a description of the end-of-life health care services expected to be available at the hospitals, hospital systems, or provider organizations that are the subject of the material change transaction, and a description of how this information was compiled;
If the material change transaction will have any impact on gender affirming health care services provided by any hospital, hospital system, or provider organization that is the subject of the material change transaction, or any impact on the availability or accessibility of gender affirming health care services in Washington state, a description of all gender affirming health care services provided in the last five years by each hospital, hospital system, or provider organization that is the subject of the material change transaction and a description of the effect the material change transaction will have on available gender affirming care. This description must include the types and levels of gender affirming health care provided in the last five years and those proposed to be provided after the material change transaction including, but not limited to, facial gender affirming care, body gender affirming care, and primary sex characteristics care, and a description of how this information was compiled;
A description of any anticipated changes in health care services provided after the material change transaction by any hospital, hospital system, or provider organization that is the subject of the material change transaction. If anticipated alterations include a reduction, relocation, or elimination of a service, the following information should be included: (i) The need the population presently has for the service; (ii) how the need will be adequately met by the proposed alteration; and (iii) alternative arrangements designed to meet the identified need;
A description of each measure proposed by the parties to mitigate or eliminate any potential adverse effect on the availability or accessibility of health care services to the affected communities that may result from the material change transaction;
A description of any changes to sexual assault nurse examiner and forensic nurse examiner programs after the material change transaction at any hospital, hospital system, or provider organization that is the subject of the material change transaction and any measures proposed by the parties to mitigate or eliminate any potential adverse effects to these programs;
A description of any community benefit program provided by any of the parties to the material change transaction during the past five years with an annual cost of at least $10,000 and the annual cost of each program for the past five years;
For each hospital, hospital system, or provider organization that is the subject of the material change transaction, a description of current policies and procedures on staffing for patient care areas; employee input on health quality and staffing issues; and employee wages, salaries, benefits, working conditions, and employment protections. This description must include a list of all existing staffing plans, policy and procedure manuals, employee handbooks, collective bargaining agreements, or similar employment-related documents;
For each hospital, hospital system, or provider organization that is the subject of the material change transaction, all existing documents setting forth any guarantees made by any entity that would be taking over operation or control of each hospital, hospital system, or provider organization relating to employee job security and retraining, or the continuation of current staffing levels and policies, employee wages, salaries, benefits, working conditions, and employment protections;
For each hospital, hospital system, or provider organization that is the subject of the material change transaction, a statement as to whether, after the material change transaction, neutrality will be maintained through all communications and usage of funds regarding nonunion employees forming a union;
For each hospital, hospital system, or provider organization that is the subject of the material change transaction, a statement as to whether any successor of the employer or union will be bound to any existing union certification and any existing collective bargaining agreement;
For each hospital, hospital system, or provider organization that is the subject of the material change transaction, a description of current debt collection practices and a description of any anticipated changes to debt collection practices following the material change transaction;
If applicable, a detailed statement and documents relating to the parties' plans for assuring the continuance of existing hospital privileges after the material change transaction;
If applicable, a detailed statement and documents relating to the parties' plans for ensuring the maintenance of appropriate health science research and health care provider education after the material change transaction;
A detailed statement and documents relating to the parties' plans for ensuring safeguards to avoid conflict of interest in patient referral after the material change transaction;
aa. A detailed statement and documents relating to the parties' commitment and plans to provide health care to the disadvantaged, the uninsured, and the underinsured, and how benefits to promote improved health in the affected community will be provided after the material change transaction; and
bb. A list of the primary languages spoken by patients at each hospital, hospital system, or provider organization that is the subject of the material change transaction.
The attorney general shall charge an applicant fee sufficient to cover the costs of implementing this chapter.
The attorney general may request additional information that is necessary to implement the goals of this chapter.
Nothing in this section prohibits the parties to a material change transaction from voluntarily providing additional information to the attorney general.
For the purpose of conducting an investigation under chapter 19.86 RCW or federal antitrust laws, the attorney general shall make any requests for additional information from the parties under RCW 19.86.110 within 30 days of the date notice is received under RCW 19.390.030 and 19.390.040. Regardless of whether the attorney general requests additional information from the parties, nothing in this section precludes the attorney general from conducting an investigation or enforcing any state or federal laws at a later date.
Any provider or provider organization conducting business in this state that files a premerger notification with the federal trade commission or the United States department of justice, in compliance with the Hart-Scott-Rodino antitrust improvements act, Title 15 U.S.C. Sec. 18a, shall provide a copy of such filing to the attorney general. Providing a copy of the Hart-Scott-Rodino filing to the attorney general satisfies the notice requirement under RCW 19.390.040.
[ 2019 c 267 § 6; ]
Information submitted to the attorney general under RCW 19.390.050 shall be maintained and used by the attorney general in the same manner and under the same protections as provided in RCW 19.86.110. The information, including documentary material, answers to written interrogatories, or transcripts of oral testimony produced pursuant to a demand or copies, must not, unless otherwise ordered by a superior court for good cause shown, be produced for inspection or copying pursuant to chapter 42.56 RCW by the person who produced the material, answered written interrogatories or gave oral testimony.
All materials provided in response to RCW 19.390.040(3) (a) through (bb) and all materials provided during public hearings are considered public records for purposes of chapter 42.56 RCW.
Nothing in this chapter limits the attorney general's authority under RCW 19.86.110 or 19.86.115. Nothing in this chapter expands the attorney general's authority under chapter 19.86 RCW, federal or state antitrust law, or any other law. Failure to comply with this chapter does not provide a private cause of action.
Any person who fails to comply with RCW 19.390.030 or 19.390.040 is liable to the state for a civil penalty of up to 15 percent of the value of the material change transaction, in the discretion of the attorney general.
The notice requirement in RCW 19.390.030 applies to transactions with an anticipated effective date on or after January 1, 2020.
[ 2019 c 267 § 9; ]