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HOUSE BILL NO. 6118
A bill to regulate certain health facility acquisitions and
mergers; to require certain approvals from the hospital cost review
board; to impose a tax on certain health facility acquisitions and
mergers; to provide for the levy, collection, and administration of
the tax; to provide for the distribution of the proceeds of the
tax; to provide for the powers and duties of certain state
governmental officers and entities; to prescribe civil sanctions
and provide remedies; and to provide for the promulgation of rules.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act may be cited as the "health facility 1
June 18, 2026, Introduced by Reps. DeBoyer and Harris and referred to Committee on
Government Operations.
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consolidation prevention act". 1
Sec. 3. As used in this act: 2
(a) "Affiliate" means a person that directly or indirectly 3
controls, is controlled by, or is under common control with another 4
person. 5
(b) "Applicant" means a person that applies for approval of a 6
health facility consolidation in accordance with section 7. 7
(c) "Board" means the hospital cost review board created in 8
the hospital cost review board act. 9
(d) "Consolidated bed count" means the combined number of beds 10
of each hospital that is subject to a health facility 11
consolidation. 12
(e) "Consolidated market share" means the combined market 13
share of each health facility that is subject to a health facility 14
consolidation in a category of health services. 15
(f) "Consumer Price Index" means the most comprehensive index 16
of consumer prices available for the Detroit-Warren-Dearborn area 17
from the Bureau of Labor Statistics of the United States Department 18
of Labor. 19
(g) "Control" means the direct or indirect power to direct or 20
cause the direction of the management and policies of a person, 21
whether through the ownership of voting securities, by contract, or 22
otherwise. 23
(h) "Department" means the department of licensing and 24
regulatory affairs. 25
(i) "Fund" means the health care cost reduction fund created 26
in the health care cost reduction fund act. 27
(j) "Health facility" means any of the following: 28
(i) A health facility or agency licensed under article 17 of 29
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the public health code, 1978 PA 368, MCL 333.20101 to 333.22260, 1
including, but not limited to, a hospital. 2
(ii) Any other facility or agency where a health professional 3
provides a health service to patients as a primary function of the 4
facility or agency. 5
(k) "Health facility acquisition" means any of the following: 6
(i) An acquisition by a health facility owner of another health 7
facility. 8
(ii) An acquisition by a person of 2 or more health facilities 9
that are not currently owned by the same health facility owner. 10
(iii) An acquisition by a health facility owner of a controlling 11
interest in another health facility owner. 12
(iv) An acquisition by a person of a controlling interest in 2 13
or more health facility owners that are not currently controlled by 14
the same health facility owner. 15
(l) "Health facility consolidation" or "consolidation" means a 16
transaction or a series of transactions that results in a health 17
facility acquisition or a health facility merger. 18
(m) "Health facility merger" means a merger between 2 or more 19
health facility owners. 20
(n) "Health facility owner" or "owner" means a person that 21
owns, operates, or governs a health facility and the person's 22
subsidiaries and affiliates. 23
(o) "Health professional" means an individual who is licensed, 24
registered, or otherwise authorized to provide a health service in 25
the ordinary course of business or practice of a health profession. 26
Health professional does not include a veterinarian. 27
(p) "Health service" means any of the following: 28
(i) Any care, service, or procedure provided by a health 29
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professional to diagnose, treat, or maintain a patient's physical 1
condition, or that affects the structure or function of the human 2
body. 3
(ii) Except as used in subdivision (e), any ancillary product 4
or service that is provided with a care, service, or procedure 5
described in subparagraph (i). 6
(q) "Hospital" means that term as defined in section 20106 of 7
the public health code, 1978 PA 368, MCL 333.20106. 8
(r) "Person" means an individual or a partnership, 9
corporation, limited liability company, association, governmental 10
entity, or other legal entity. 11
(s) "Prosperity region" means that term as defined in section 12
9130 of the public health code, 1978 PA 368, MCL 333.9130. 13
(t) "Target health facility" means either of the following: 14
(i) A health facility to be acquired in connection with a 15
proposed health facility acquisition. 16
(ii) A health facility that is subject to a proposed health 17
facility merger of which the applicant for the proposed health 18
facility merger is not the owner of the health facility. 19
Sec. 5. (1) Except as otherwise provided in subsection (2), a 20
person shall not enter into a health facility consolidation unless 21
both of the following conditions are met: 22
(a) The board has approved the consolidation under section 7. 23
(b) The applicant has paid the health facility consolidation 24
prevention assessment in accordance with section 9. 25
(2) Notwithstanding any other provision of this act, a health 26
facility consolidation is not subject to this act if all of the 27
following conditions are met: 28
(a) One or more of the following is met: 29
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(i) A party to the consolidation is a health professional. 1
(ii) A health facility that is subject to the consolidation is 2
owned by 1 or more health professionals. 3
(b) For each health facility owner that is a party to the 4
consolidation, the combined annual revenue of all health facilities 5
owned, operated, or governed by the owner is not more than 6
$5,000,000.00. 7
(c) The combined annual revenue of all health facilities that 8
are subject to the consolidation is not more than $10,000,000.00. 9
Sec. 7. (1) An applicant may file an application with the 10
board for approval of a health facility consolidation in the form 11
and manner prescribed by the board. If the consolidation is a 12
health facility acquisition, the applicant must be the acquiring 13
entity. If the consolidation is a health facility merger, the 14
applicant must be the owner of the most assets that are subject to 15
the health facility merger. The application must include or attach 16
all of the following: 17
(a) All documents related to the governance and ownership of 18
the parties to the proposed consolidation, including, but not 19
limited to, articles of incorporation or organization, bylaws, 20
operating agreements, and organizational charts, as applicable. 21
(b) All agreements and proposed agreements that comprise the 22
proposed consolidation, and all attachments to those agreements. 23
(c) All of the following information for each owner that is a 24
party to the proposed consolidation: 25
(i) The number of hospital beds currently operated by the owner 26
in this state and in each prosperity region. 27
(ii) A summary of any other health facilities that the owner 28
currently owns, operates, or governs in this state and in each 29
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prosperity region, divided by type of facility. 1
(d) All available information on the effect that the proposed 2
consolidation would have on the availability or accessibility of 3
health services. 4
(e) Evidence that demonstrates the applicant's commitments 5
regarding pricing of health services described in subsection (5)(b) 6
and (c), as applicable. 7
(f) An application for a hardship exemption under subsection 8
(3), as applicable. 9
(g) Any additional information and documents that the board 10
considers necessary to review and evaluate the proposed 11
consolidation. 12
(2) An application filed under subsection (1) must be 13
accompanied by an application fee of $10,000.00. Money received 14
from application fees under this subsection must be deposited in 15
the fund. 16
(3) An application filed under subsection (1) may include an 17
application for a hardship exemption from the conditions set forth 18
in subsection (5)(a) and (b) in the form and manner prescribed by 19
the board. The board shall grant the hardship exemption if all of 20
the following conditions are met: 21
(a) A health facility to be acquired by or merged with in 22
connection with the proposed consolidation is financially 23
struggling and is at risk of closing. 24
(b) The proposed consolidation is the only feasible way to 25
prevent the closure of the health facility described in subdivision 26
(a). 27
(c) The owner of the health facility described in subdivision 28
(a) supports the grant of the hardship exemption. 29
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(4) The board shall notify the department if the board grants 1
a hardship exemption under subsection (3). 2
(5) The board shall review an application filed under 3
subsection (1) for a proposed health facility consolidation. 4
Subject to subsection (3), the board shall not approve a proposed 5
consolidation unless all of the following conditions are met: 6
(a) The proposed consolidation would not result in any of the 7
following: 8
(i) A consolidated bed count in excess of 8% of all beds in 9
this state. 10
(ii) A consolidated bed count in excess of 15% of all beds in a 11
prosperity region. 12
(iii) A consolidated market share in excess of 3% of the total 13
market share in this state for any category of health services. 14
(iv) A consolidated market share in excess of 15% of the total 15
market share in a prosperity region for any category of health 16
services. 17
(b) The applicant, for itself or on behalf of the proposed 18
owner of a target health facility if the applicant is not the 19
proposed owner, demonstrates a commitment to decrease prices of 20
health services at each target health facility by not less than 2% 21
upon entering into the consolidation. 22
(c) The applicant, for itself or on behalf of the proposed 23
owner of a target health facility if the applicant is not the 24
proposed owner, demonstrates a commitment to not increase prices of 25
health services at each target health facility by more than the 26
annual percentage change in the Consumer Price Index in a given 27
calendar year. 28
(6) If an application meets the conditions set forth in 29
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subsection (5), or the application meets the condition set forth in 1
subsection (5)(c) and the board has granted a hardship exemption 2
under subsection (3), the board shall approve the application and 3
provide written notice to the applicant. If the board does not 4
approve the application, the board shall provide written notice to 5
the applicant stating the reasons that the application is not 6
approved. 7
Sec. 9. (1) An applicant must pay a health facility 8
consolidation prevention assessment in accordance with this section 9
before entering into the health facility consolidation. The health 10
facility consolidation prevention assessment is a tax that is 11
levied on the applicant. 12
(2) The health facility consolidation prevention assessment 13
must be in an amount as follows: 14
(a) For a proposed health facility consolidation that is 15
conducted as a purchase, an amount equal to 12% of the total 16
purchase price of the proposed health facility consolidation. 17
(b) For a proposed health facility consolidation that is not 18
conducted as a purchase, an amount equal to 12% of the combined 19
value of the health facilities that are subject to the proposed 20
health facility consolidation and are not owned by the party to the 21
proposed health facility consolidation that owns the most health 22
facility assets. 23
(3) To determine the amount of the health facility 24
consolidation prevention assessment required under subsection (2), 25
an applicant may submit the estimated value of a proposed health 26
facility consolidation to the board for review. A submission under 27
this subsection must be accompanied by a description of the 28
methodology that the applicant used to calculate the estimated 29
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value. If the board receives a submission under this subsection, 1
the board shall consult with the applicant to evaluate the accuracy 2
of the submission. The board may adjust the estimated value as the 3
board determines is necessary to provide an objective measure of 4
the value of the proposed health facility consolidation. 5
(4) An applicant must pay the health facility consolidation 6
prevention assessment to the department of treasury in the form and 7
manner prescribed by the department of treasury. 8
(5) The department of treasury shall administer the health 9
facility consolidation prevention assessment under 1941 PA 122, MCL 10
205.1 to 205.31, and this act. If 1941 PA 122, MCL 205.1 to 205.31, 11
and this act conflict, this act applies. 12
(6) The department of treasury shall prescribe the forms 13
necessary for the administration of the health facility 14
consolidation prevention assessment and may promulgate rules to 15
implement this section under the administrative procedures act of 16
1969, 1969 PA 306, MCL 24.201 to 24.328. 17
(7) The state treasurer shall deposit money received from 18
health facility consolidation prevention assessments under this 19
section in the fund. 20
Sec. 11. (1) The board may do any of the following in 21
connection with the board's review of a proposed health facility 22
consolidation: 23
(a) Send a written request to a party to the proposed 24
consolidation, or an affiliate, officer, director, partner, agent, 25
or employee of the party, requiring the person to provide 26
additional information or documents related to the proposed 27
consolidation. A person shall provide the additional information or 28
documents to the board not later than 30 days after receiving the 29
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written request. If a person is not able to fully comply with the 1
written request, the person shall provide to the board a statement 2
of the reasons that the person is not able to fully comply with the 3
written request. 4
(b) Consult or contract with an expert, consultant, or 5
governmental entity to assist in reviewing and evaluating the 6
proposed consolidation. 7
(c) Hold 1 or more public hearings on the proposed 8
consolidation. A public hearing held under this subdivision must be 9
conducted in accordance with the open meetings act, 1976 PA 267, 10
MCL 15.261 to 15.275. 11
(2) The board may require an applicant to reimburse the board 12
for its costs related to a review of a proposed consolidation. An 13
applicant that receives a request under this subsection shall 14
reimburse the board not later than 30 days after receiving the 15
request. 16
(3) Unless otherwise provided by law, confidential business 17
information possessed or retained by the board in performing an 18
official function under this act is exempt from disclosure under 19
the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. 20
As used in this subsection, "confidential business information" 21
means information that has not been publicly disseminated or that 22
is unavailable from other sources, the release of which might cause 23
a health facility harm. 24
(4) Unless otherwise prohibited or restricted by law, the 25
department of health and human services, the department of 26
insurance and financial services, and any other state department 27
shall cooperate with the board and provide the board with 28
information on the board's request. 29
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Sec. 13. (1) Upon entering into a health facility 1
consolidation, the owner of a target health facility that was 2
subject to the consolidation shall decrease prices of health 3
services at the target health facility in accordance with the 4
commitment described in section 7(5)(b). 5
(2) After entering into a health facility consolidation, the 6
owner of a target health facility that was subject to the 7
consolidation shall not increase prices of health services at the 8
target health facility in excess of the commitment described in 9
section 7(5)(c). 10
Sec. 15. A person shall not hire a health professional with 11
the intent to circumvent the requirements of this act that would 12
apply if the person were to acquire or merge with the health 13
facility that employs the health professional. 14
Sec. 17. (1) A person that violates section 5 is subject to a 15
civil fine of not more than 15% of the transaction value of the 16
health facility consolidation. 17
(2) A person that violates section 13 or 15 is subject to a 18
civil fine of not more than $10,000.00 for each day of violation. 19
(3) A civil fine collected under this section must be 20
deposited into the fund. 21
Sec. 19. The attorney general may bring an action on behalf of 22
the board to enforce this act. In an action brought under this 23
section, the court may do any of the following: 24
(a) Order a person to comply with this act or a rule 25
promulgated under this act. 26
(b) Order the payment of a civil fine under section 17. 27
(c) Enjoin the parties to a proposed health facility 28
consolidation from entering into the consolidation. 29
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(d) Declare that a health facility consolidation entered into 1
in violation of this act is void. 2
(e) Grant other relief as the court determines necessary or 3
appropriate. 4
Sec. 21. (1) By not later than March 1 of each year, the board 5
shall submit a report to the department and the house of 6
representatives and senate standing committees on health policy 7
that includes all of the following information, by hospital system: 8
(a) The amount of expenditures on health facility 9
consolidations. 10
(b) The number of applications, including applications for a 11
hardship exemption, submitted under this act, and the status of 12
those applications. 13
(c) The number of violations of this act. 14
(2) The department shall post a copy of the report required 15
under this section on the department's website in an area that is 16
accessible to the public. 17
Sec. 23. The board may promulgate rules to implement this act 18
under the administrative procedures act of 1969, 1969 PA 306, MCL 19
24.201 to 24.328. 20
Enacting section 1. This act does not take effect unless all 21
of the following bills of the 103rd Legislature are enacted into 22
law: 23
(a) House Bill No. 6116 (request no. H06007'26). 24
(b) House Bill No. 6117 (request no. H06751'26). 25